Description

First a word of warning – this idea relates to a company which frequently moves 5% plus in a day and in a market that was limit down at 10% at one stage today. The company also has poor transparency, poor corporate communications and virtually zero analyst research (eg one note in five years of any value).
Furthermore the actual company operates in industries associated with politics, corruption and private armies. And the company in question has already gone up roughly 9x in 18 months.
If none of the above has put you off I would recommend an investment in United Breweries Holdings of India. The rationale is that I believe that there is 30-50% upside within 6-8 months and more (possibly 100%) in 24 months. Indeed one might argue that especially for a long only institution this is a buy and hold stock.
In the short term I believe that there are two very specific catalysts – an IPO of one business and revaluation of another business.
However this is a complex sum of parts story that gives exposure to the Indian economy so please bear with me.
Before we start I must warn readers that there is a company in India called United Breweries Limited (UBBL IN on Bloomberg) which is a partial subsidiary of United Breweries Holdings (UB IN). Hence to avoid confusion I will tend to use tickers to distinguish between the companies. (My recommendation relates to UB IN ie the holding company).
Also as India will be unfamiliar to many readers I will start with a background of salient points relating to India and also later cover how to buy the stock and liquidity etc. The rationale for the country background is that I think the macro drivers will give this company massive leverage whatever happens to the general markets.

Section I – Why India? Background
India has a population of 1.1bn people (ie more than the US and Europe combined). By 2020-2030 it will probably exceed the population of China. GDP is growing at roughly 7%+ per year with inflation of 4-5% so nominal 11-12% growth. Half the population is under 25.
Between Independence and the mid 1990s is generally considered the 'lost decades' during which the country followed socialist ideals. Since the mid 1990s – and especially in the last couple of years – the market has adapted a much more market orientated capitalist approach.
GDP per head is low but the key point is that it is going up.
Historically a lot of Indians for religious, moral or other reasons have been teetotallers. Alcohol consumption (depending on the source) is 1 – 2 litres / head / yr – this compares to 20 – 30 litres per head per year in the US and Germany. However the younger age group (remember the population under 25) do not have the hang ups of their parents regarding alcohol. Secondly with the growing GDP the young in particular have increasing disposal incomes and are more exposed to Western lifestyles eg on TV. (For instance music TV stations in India appear more 'raunchy' than MTV – and this in a country that 20 years ago would have had riots if a girl walked down the road in a miniskirt).
Similarly from 1974 to the mid 1990s India operated a 'license Raj' under which you needed government licenses to operate in many industries – this led to oligopolies where political influence counted more than business acumen. The consequence was that cement production was controlled by an oligopoly. At the same time rents were regulated. As a consequence construction was hindered. So arguably there is a 20 – 30 year deficit of buildings to catch up on. Even today with the market opening up there is a shortage of high quality office spaces particularly in 'hot cities' such as Bangalore which is the IT capital of India.
In healthcare India is 20% roughly of the world's population and consumes roughly 20% of the world's medication. Yet by value this represents about 2%. There are estimated to be between 20-30k pharmaceutical companies in India (this does include homeopathic medicines, and intermediates makers). With increased controls eg quality of medicines, and more national distribution and marketing I believe the smaller players will fall away.
In aviation the two government controlled airlines (Air India for International traffic and Indian Airlines (now rebranded as Indian) for domestic traffic) dominated until the market opened up. Now Jet Airways controls 50% or so of the Mumbai to Delhi route (this is India's most valuable route). Various other airlines have started in recent years but the key issue is shortage of airports and terminal facilities (gradually been addressed by private public partnerships).
Similarly the infrastructure sector (eg power, roads etc) has in essence a 30-50 year backlog to catch up on.

Section II Why UB Holdings?
So why did I go through all the above – because there is one company that has stakes in India's biggest brewer, its biggest spirits company, a stake in a major pharmaceutical company, a property development right in the heart of Bangalore, owns its own airline and an engineering business – the stock is UB Holdings (UB IN on Bloomberg).
The stock has gone up roughly 8- 10 fold in the last 18 months but I believe that there is still a lot of upside from here.
However I should warn that it is hard to get your head around the group and that despite trying there are still lots of holes in information on what assets the group owns.

Section III What does UB Holdings own?
In order to understand the group I would recommend putting together a spreadsheet – I will refer to Bloomberg codes below to help. As the Indian market has been falling I will use prices of the close of today (22 May 2006) but recommend that you verify them.
UB Holdings listed assets are: (values as from Bloomberg)
Company No of shares % of company Value (in Rs)
United Breweries (UBBL) 2,726,632 9.17% 2,748,306,747
McDowell (MCDOW IN) 21,800,934 36% 13,319,281,370
Aventis India (HOEC IN) 2,348,370 10% 3,949,137,214
Bayer Cropscience (BYRS IN) 1,002,612 2.54% 157,109,454
Mangalore Chem (MCF IN) 9,043,797 7.63% 114,855,762
UB Engineering (UBE IN) 3,726,749 30.2% 197,331,360
GMR Industries (GMR IN) 200,000 0.6% 61,170,004

So the value of the listed assets is Rs21,927,776,160 or roughly Rs 22bn.

In addition UB Holdings owns:
(a) A site in the heart of Bangalore of 10 acres on which they are building an office complex (called UB City) with a developer. The first phases of this should be complete this year and the company expects to get Rs 200m per year in rental income when the whole complex is complete. For ease of the maths I am capitalising this at 10% to give me a value of Rs2bn. However given the growth in population and the demand for high quality property especially in Bangalore I might be too low on this.
(b) We will go into details later but the company also owns a number of private spirits companies (Triumph, Herbertson etc) which I am estimating are worth Rs 1.5bn (I think this is a significant underestimate).
(c) Kingfisher Airline – this is an airline started last year by the group. This is discussed in more detail below but I reckon it is reasonable to put in a value of Rs 4.6bn for this – based on ½ the value of Spicejet (SJET IN – market cap Rs9.3bn) which is listed. However I discuss this in more detail below as arguably Kingfisher is worth more (not less) than SpiceJet.
(d) UB has taken control of Shaw but to do this they have raised debt which they appear to have subsequently refinanced via a convertible and a GDR. For the moment (I am still trying to get details I am assuming that the capital raise matches the value of Shaw – as discussed later this is an underestimate).

So putting this all together we get a value of (Rs bn):
Listed assets 21.9
Other drinks companies 1.5
UB City 2
Airline 4.6
Total 30

Deduct debt 3.39
Equity value 26.61
Current market cap 21bn
So upside is about 27%

However I would recommend reading through the following as this may be a significant underestimate. In particular I have missed out a lot of value at Kingfisher (potentially it ought to be valued at a premium to SpiceJet rather than a discount – ie a difference of Rs 4.6bn ie another 22%) and at Shaw (difficult to estimate).

Section IV Brewery
As discussed in the introduction alcohol consumption in India is low. The only prediction I can make is that it will go up. United Breweries (UBBL IN) has a roughly 40% market share. One beer 'Kingfisher' alone is roughly 30% of the Indian market and is arguably the gem in the crown on the beer side.
UB Holdings owns roughly 10% of United Breweries, however the chairman also owns a stake through his private companies so his total stake (direct and indirect via UB Holdings) is 37.5%. Last year the group sold 37.5% of the business to Scottish and Newcastle. (S&N is a UK based beer company - in the global top 10)
In exchange Scottish and Newcastle are going to start distributing Kingfisher globally (there were some previous regional agreements which are being wound down). S&N will be appointing the CFO to United Breweries going forward.
I do not expect Indian beer consumption to reach western standards for all kinds of reasons but I do expect a combination of global sales via S&N and improved distribution and marketing inside India plus the demographics to make this business much more attractive going forward.
I think the global marketing of Kingfisher beer could have a significant impact on the PnL of UBBL because overseas sales command a far higher price than local sales.
Currently margins are poor in this business but I believe that the above will help improve them significantly. (See also below on distribution under spirits).
I cannot find any published research on UBBL so do not have detailed margin predictions or models. However I would refer readers to the comments below on spirits margins. Since it is less than 10% of the value of UB IN I am not going to try to make a detailed model on UBBL but rather assume the market has valued it fairly.
(It should be noted that I have seen some research suggesting UB IN owns 12.6% of UBBL rather than the 9.17% I have used – however I am using the lowest figure I have found to be conservative).
The group (I think UBBL rather than UB but need to check) has a major stake in the Mendocino Brewery in the US. This is a very small brewer (MENB IN) but I think it might be used as a vehicle to expand into the US in the future.

Section V Spirits
Historically spirits have been more attractive than beer to drinkers in India. Part of the reason is that alcohol is taxed at the state level and the states tend to tax on volumes not quantity of alcohol. The consequence is that per unit of alcohol spirits have lower taxes than beer so the consumer gets better value for money buying spirits.
The market within India can be split into two segments 'country liquors' and IMFL (Indian manufactured foreign liquor). The country liquor market is hard to get accurate estimates for but the suggestions I have seen are for around 200m cases per year. However this is essentially 'mom and pop' operations running small distilleries which are often illegal (ie 'moonshine') and with poor quality control and no branding etc. The authorities are keen to close these down due to health issues (there are regular press reports of people being injured due to poor quality control).
The IMFL is really a quirk of British rule whereby local companies were taxed, regulated and driven underground whilst foreign (ie British) companies were able to do what they wished. When the British left these foreign liquors were then manufactured in India (hence the term IMFL).
The IMFL market is currently at about 112 - 125m cases per year ie it is just above half the size of the country liquor market.
IMFLs comprise of Whiskey (the most important part), Rum, Brandy, Vodka and Gin.
In the IMFL market the biggest players are (market share in brackets):
McDowell 22%
Shaw Wallace 16%
Herbertson 12%
Triumph 5%
Jagatjit Industries 8%
Mohan Meakin 7%
Radico Khaitan 4%
Others 26%

This is where it gets interesting – UB Holdings now controls the number 1, 2,3 and 4 players. For the sake of clarity I will repeat that – UB Holdings now controls the number 1, 2, 3, and 4th biggest players – ie UB Holdings now controls 55% of the market.
This is extremely important because for 20 years McDowell and Shaw Wallace have slugged it out with each other and destroyed margins. It is only within the last 9 months that UB has managed to gain control of Shaw Wallace.
The plan going forward for the group is to merge all its spirits companies into one company (to be named United Spirits). In order to simplify things I have only mentioned McDowell, Shaw, Herbertson and Triumph so far – however the group also has other drinks companies (eg United Distillers, Phipsons) and a wine company (Barmati – number 3 in India) which will be merged into United Spirits.
As a consequence United Spirits will be shipping 56-57m cases per year – to give a feeling of scale the global top five in volumes are (m of cases):
Diageo 91 (Captain Morgan, Gordons, Johnnie Walker,Smirnoff)
United Spirits 56-57
Pernod Ricard 53 (Ballantine's, Beefeaster, Chivas Regal, Jameson)
Allied Domecq 46
Barcardi 34
Fortune Brands 31 (Courvosier, Gilbey's, Jim Beam, Maker's Mark)
Barcardi 31 (Barcadi, Bombay Sapphire, Grey Goose, Martini)
Brown-Forman 15 (Finlandia, Jack Daniel's, Southern Comfort)
(Note that Pernod and Allied are merging).
Obviously the above table is in terms of volume and not value. This point is extremely important because of issues with distribution, margins and competition in the Indian market.
(a) Distribution and manufacturing
Alcohol is regulated on a state level within India. This means that it is necessary to have manufacturing within each state. The drinks companies get around this by having multiple manufacturing sites – some fully owned, others run on a toll or franchise basis. (Due to the manufacturing being done by third parties there is a degree of 'leakage' from manufacturing sites – these cases are known as 'seconds' in the industry).
Within state distribution varies. In some (very limited) states distribution is 'free' and the drinks companies can therefore do it themselves. In the majority of states the state government either controls distribution through its own network or sells the right of distribution to local players (with all the politics, corruption, private armies etc that that involves). In these states the price that the drinks companies can sell to distribution is controlled by the state. Most states set the price on a volume basis not adjusting for the % of alcohol. (Hence this is negative for UBBL and beer companies generally). In the states where the state government regulates distribution it often also regulates retail – it is usually only via a limited number of state owned retail shops.
A couple of states are 'dry' states ie no legal alcohol sales (unless you are a registered alcoholic).
Going forward I expect that over several years (10 years?) distribution will be liberalised. This is important because it will lead to an improvement in margin plus an improvement in volumes due to increased availability in more retail points.
I believe that one state (sorry don't know the name) has gone through the transition and that there was an immediate (ie within 6 months) 20% increase in volumes.
What are the drivers to liberalisation? I think that generally attitudes in India are becoming more relaxed (I read a quote last year from a government minister saying that there was no reason alcohol could not be sold in grocery stores), a desire to close down country liquor / moonshine operations and state governments starting to appreciate that they can improve their excise revenues by allows more freedom of distribution. In addition given different states have different taxes it is easy to imagine that currently some of the stricter states are probably losing excise revenue in cross border smuggling operations.
(b) Margins
Historically Shaw, McDowell, Triumph and Herbertson had been competing aggressively with each other and pushing down prices. I anticipate that United Spirits will be able to improve margins by not competing internally and by site consolidation and improved negotiating power versus suppliers – eg 18% of revenues are spent on glass bottles. One supplier – Hindustan Glass controls 60% of the Indian glass bottle market. The UB group as a whole will be buying 40% of the entire country's output of glass bottles (2.5x bigger than the soft drink makers!).
In total United Spirits has 120 spirits brands – it expects to half this going forward. I expect that this will improve margins.
I have not compared the margins of the smaller listed players as I think that this is misleading due to differences in geographic coverage and product segments covered. However I should point out all the smaller players are also indicating a jump in margins due to the merger of Shaw and McDowell. Most feel that Shaw was the irrational player in the market.
(c) Competition
In certain segments essentially there will be no competition eg in super-premium whiskeys the group will have 100% market share.
I believe foreign entrants will have difficulty entering the market due to the politics and the distribution / need for distilleries in each state.
One broker (www.sharekhan.com) has estimated a 1050 bps improvement in margin by 2008 for new McDowell (ie United Spirits) as a result of the above. On this model in 2008 McDowell will generate Rs 31.3 of eps – this compares to a current price of Rs 610 so a P/E of 19.5x. However this was before McDowell issued a convertible and a GDR which extinguished the expensive debt it took on to complete the Shaw acquisition. The total raised ($250m) I believe means that the company effectively got investors to acquire shares at a higher price than it purchased Shaw – but I am still trying to get all the details (McDowell's share price (MCDOW IN) has gone up roughly 50% since it acquired Shaw).
I should point out that the broker mentioned earlier (Sharekhan) is modelling a 56% eps growth from 2005 – 2008 for McDowell even after paying down (relatively expensive) interest on the debt. Using the back of envelope on EV/EBITDA I estimate that the company trades at roughly 10x which is roughly where Diaego trades. However obviously McDowell / United Spirits has more growth potential.
Over the course of 2006-2007 the transactions (effectively 10 companies are being merged) to create United Spirits should take place and we will see numbers for the new company. I think this will act as a catalyst. Also I believe that the foreign investors who acquired the GDR and convert may be taking board seats at United Spirits and that this will improve corporate transparency and governance.
It is interesting to note that one website estimates total Indian alcohol consumption of 1bn litres in 2002 – compared to 21bn in China.

Generally I believe that the growth in alcohol consumption in India is underestimated. The reason I say this is:
(a) It is very hard to find accurate numbers but some UN WHO numbers I found suggested that 89% of women and 67% of men do not drink.
(b) Other sources state that 50% of the population is below 25.
(c) If I assume only 25+ yr olds drink, and that the entire population is 1.15bn with 53% males I get 129m drinkers
(d) If I assume 125m cases of IMFL and 195m cases of country liquors sold in a year, with 6 one liter bottles per case I get 14.86 liters per head per yr.
(e) If I assume in the below 25 age group that teetotallers are 52% of men and 80% of women (my estimates), then (if I assume that they start drinking only after 25) I get an additional 26m drinkers in 5 yrs or about 5.8% more per yr. This is probably a little too high as I am not modelling anyone dying in the 'current drinking' population.
(f) However the point I am trying to make is that with ½ the population under 25 and attitudes changing the drinking population is going to be growing quite rapidly.
(g) At the same time GDP is growing (about 7% per year plus 4-5% inflation) and I believe that disposal discretionary income will grow even faster.
(h) In addition I believe as state governments relax distribution (this is a 10 – 15 yr story) there will be increased availability of alcohol which will increase opportunities to purchase. And there will be displacement of the country liquors by the IMFLs and branded beers and wines.
(i) I have heard estimates that there are 3.5m FMCG distribution points in India but only 30-35k points that legally sell alcohol. However there are suggestions that in single cities like Bangalore there may be over 3k illegal sales points. Thus there is a large illegal market which, as distribution becomes relaxed will drive volume growth for IMFLs.
International expansion:
There has been recent press comment suggesting that UB Group is looking to do an acquisition in the UK or Europe. One rumour is that they have made a bid for Tattinger Champagne. Another is that they will buy a whiskey company in Scotland.

Sugar:
Despite the descriptions (eg Whiskey etc) a lot of Indian liquor is actually made from sugar molasses. However due to increase prices of sugar (due to global prices and demand for fuel ethanol) the liquor companies are generally looking to increase the amount that they produce from grain. This is also critical for international expansion because eg in Europe to sell whiskey it has to be derived from grain. In the short term I fear that there may be some margin squeeze due to sugar prices but that longer term this could work in the favour of United Spirits as it will squeeze the smaller players (and the country liquor operators more).
Generics:
The company believe that there is a market opportunity internationally for 'generics' – ie cheap gin for a nightclub for when a customer asks for a 'gin and tonic' rather than specify a particular brand. The switch to grains from sugar based alcohol is crucial for the company to exploit this opportunity on a global scale (ie to be recognised as a whiskey etc).
Politics / Corruption etc:
I believe that as the market leader (in both spirits and beer) the company is keen to be seen as 'Cesaer's wife'. In this vein I would point out that until recently Neville Bain was on the board of UBBL IN. Mr Bain is also on the board of Scottish and Newcastle, an ex chairman of the UK Post Office and writes books on corporate governance. Additionally the CFO of UBBL is from S&N. Similarly on the spirits side I believe that UB will appoint reputable figures on the board on United Spirits. The company is also keen to point out that most of the corruption occurs at the local level with country liquors and at the state level with the way distribution is currently organised (ie locals with influence obtain distribution licenses and then use force to ensure a monopoly).
Historically all the drinks companies in India used to make big campaign contributions to politicians but UB IN got fed up of this and instead its chairman (VJ Mallaya) ran for and has become a sitting MP in the Indian parliament. This position exposes him to a lot of potential flak so the company again is keen to ensure it stays on the right side of the laws.
Anyone concerned about stock market regulation should read some of the reports on the SEBI website regarding various market abusers – SEBI over the last couple of years has shown itself as a regulator that does not mince its words and is prepared to act (eg they threw CSFB out the country at one stage for attempted market manipulation).
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Catalyst

Section VI: Property
Bangalore is the hot spot of India's IT industry. In the heart of the city UB Holdings owned a 13 acres site (the site of an old brewery). A couple of years ago they sold off 3 acres for a luxury hotel (Four Seasons). The remaining 10 acres was injected into a joint venture with Prestige Properties. In return Prestige financed the build of an office complex (UB City) on 7 acres of the site. The ownership split will be 55:45 in favour of UB. As well as the complex housing UB Group's own businesses space will be leased to third parties. The group estimates that when fully occupied it will receive 200m per year in rental income.
Current commercial property yields in India are 9-12%. Given the location I am estimating a 10% yield so valuing UB's stake at Rs 2bn. This is probably an underestimate given the location.

Section VII: Pharmaceuticals
One of the top five global pharmaceutical companies is Sanofi-Aventis (market cap USD 125bn) based in France. The Indian arm of Aventis (one of the predecessor firms) is separately listed in India. UB Holdings owns 10%. Within India Aventis India is a top ten player. On some performance measures eg quality of salesforce it consistently scores at the top.
Ultimately I anticipate Sanofi-Aventis will wish to merge Sanofi's Indian operations with Aventis India and so will probably acquire Aventis India. I think that will happen in the next three years. I would expect Sanofi to pay a premium for this.

Section VIII: Bayer Cropsciences
UB has a small stake in Bayer Cropscience. This is probably due to Bayer buying Aventis Cropscience (which was originally a jv between Aventis and Bayer). This is not the place to discuss long term potential of agroculture in India but it is an interesting stake and also relevant given the UB group is a major purchaser of sugar molasses and in the future of grains.
Again I expect the stake to be bought out (by Bayer) within the next 3 years for a premium.

Section IX: Airlines
Remember Kingfisher beer? And the comments regarding the historic attitudes within India to alcohol. It may be no surprise that alcohol advertising is limited (if allowed at all).
But you can advertise an airline!
There is very little detail disclosed about Kingfisher airlines (KFA). The group is the majority owner (I think 95%) but some work I have done suggests Debis (an airline leasing unit of DaimlerChyrsler) might own 5%.
The only metrics I have been able to get suggest KFA has ordered roughly 35-37 aircraft. It started flying in May last year. Both the start date and the number of aircraft are roughly the same as for SpiceJet (SJET IN). The latter has a market cap of Rs 9.3bn.
However there appear to be a number of key differences between SpiceJet and KFA:
1. Kingfisher has outsourced maintenance to Indian (the rebranded Indian Airways). Also in a couple of airports Kingfisher is allowed to use the Indian terminals – this is critically important in a country with a shortage of terminals, runways and maintenance facilities.
2. As part of the historic 'socialist' rules all airlines in India have to fly a certain number of social routes as well as more 'commercial' routes. KFA has done a deal with Indian whereby rather than fly the routes itself KFA has bought capacity on Indian's flights. This means that KFA is able to utilise more of its own aircraft on higher value 'commercial' routes.
3. New entrants such as SpiceJet have focussed on the low cost model. Instead KFA has focussed on a 'value' model whereby it charges higher prices but gives more frills. It argues that India cannot yet sustain a true low cost carrier model due to the regulations, limited runway capacity and long turn around times. As a consequence if a plane is full KFA will generate a higher revenue etc.
4. I believe that the market is underestimating the impact of the branding – Kingfisher is recognised as a brand across India. The nearest comparator would be Virgin in Europe and the US – this is no accident – VJ Mallaya (the chairman of the group) has focussed on emulating Virgin.
5. I believe that having your chairman as a sitting MP and a major drinks business implies that even in the airline business in India you will have influence which will be important to secure landing rights etc in a country where airport capacity is limited. I think this is illustrated with the deals with Indian which is government owned.
The current expectation is that KFA will undergo a fund raising – probably via an IPO – in the latter part of 2006.
Because of the reasons stated above I reckon that SpiceJet's current market cap gives a base of what KFA might be worth but to be conservative until I see some numbers I am using only ½ of SpiceJet's market cap. Arguably KFA ought to have a premium to SpiceJet.

Part X – Others:
I will briefly mention that UBE – the group's engineering company appears to have an order book of a couple of billion rupees but a market cap of only Rs 650m. However given it is only a small component of the sum of parts I have not done any detailed work on it. There are other companies held by UB IN that I have not covered (eg a magazine, a footwear company and a couple of football teams).

Part XI – How to buy:
Given that most investors will not be familiar with India the question might arise how one buys shares in UB IN? It is fairly straightforward to buy via any major bank (eg Goldmans, Lehmans, Citigroup, Merrill, Deutsche, CSFB, UBS etc). They will sell either participation notes (P-notes) or total return equity swaps on the underlying. These will usually be denominated in dollars so the investor takes the currency risk.
For local brokers the best one is probably Kotak Mahindra Bank – and it is possible to ask eg Citigroup to direct the trade via Kotak so that a direct trading account in India is not needed. Alternatives are Motilal Oswal, SSKI etc.
Commissions in India are typically higher than in the West (say 50 – 100bps).

Part XII – Owners and liquidity
The majority of UB IN is owned by the family and family trusts of the chairman – VJ Mallaya (my estimate is roughly 60-75%). Foreign investors include Oppenheimer, Templeton and Alliance Capital. I believe that as United Spirits takes shape that foreign interest will increase.
Despite the appearance on the screen it is possible to buy decent blocks of stock (eg $1-5m). It is preferable to do this via brokers with local presence or directly via a local broker.

Part XIII – Summary
I hope I have shown that on a simple sum of parts that UB IN is worth more than its current sum of parts. However that I have been conservative in my valuation of KFA and that this could present meaningful upside. In addition the creation of United Spirits will create a company of meaningful scale on a global scale and hence generate foreign interest. The macro factors within India alone should drive significant upside in the drinks businesses – and the consolidation of the number 1,2,3 and 4 players should lead to significant margin improvement.
The involvement of significant foreign capital at McDowell and the pending IPO of KFA will ensure that corporate transparency will improve.
I appreciate that it is difficult to get your head around the whole group but I believe that the longer term potential is potentially higher if KFA and United Spirits do deliver.