Near-term margin hangover may put a lid on United Spirits' upside

Even as brokerages are positive on the prospects of the two liquor majors, they face profitability challenges

Better-than-expected revenue and operational performance in the July-September quarter of 2022-23 (FY23), premiumisation trend after the recent rejig, and strong long-term outlook are positives for the country’s largest listed liquor maker, United Spirits (USL). Since its results on Tuesday, the stock has gained 6 per cent, outperforming the benchmarks.

Net sales for the quarter at Rs 2,880 crore saw a rise of 17.7 per cent, led by an estimated 8 per cent growth in volume.

Most brokerages had pegged sales between Rs 2,350 crore and Rs 2,500 crore. The reported number is about 25 per cent more than pre-Covid levels. Growth, according