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Liquor stocks rally on hopes Supreme Court may modify ban order

LiveMint logoLiveMint 11-05-2017 Nasrin Sultana

Mumbai: Shares of liquor stocks are rallying on hopes that there could be changes in the Supreme Court order banning liquor sale within 500 metres of national and state highways. United Spirits jumped 12%, GM Breweries gained 8%, United Breweries was up 8%, while Radico Khaitan climbed 4% intraday on Thursday.

According to an Economic Times report, the Supreme Court had said that it may announce modification in the second week of July as hotels and clubs sought changes in its order.

In December 2016, the SC had ordered that stores selling alcoholic beverages within 500 metres from the highways will be closed from 1 April. On 10 April, Madhya Pradesh was the fourth Indian state (after Kerala, Bihar and Tamil Nadu) to announce a ban on liquor in past two years.

Earlier, Motilal Oswal said that alcoholic beverage companies face significant near-term headwinds due to such bans. “Other near-term headwinds include: (i) lingering impact of demonetisation, uncertainties over inclusion of alcoholic beverages in goods and service (GST) and delay in discretionary consumption recovery,” the brokerage firm said in an 11 April report.

Motilal Oswal also added that despite near-term headwinds, United Breweries’s beer business in India could return to double-digit volume growth on revival.

At 3:12pm, GM Breweries was at Rs467.20, up Rs24.30, or 5.49%; Radico Khaitan was at Rs128.30, up Rs3.70, or 2.97%; United Breweries was at Rs852.75, up Rs49.75, or 6.20%; and United Spirits was at Rs2,132.40, up Rs167.85, or 8.54% on the BSE. The benchmark Sensex index was up at 11.18 points, or 0.04% at 30,259.35.

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