United Spirits gains 4% in weak market, nears 52-week high; here's why

United Spirits: The stock price of the breweries & distilleries company quoted higher for the third straight day, surging 6 per cent during the period.

United Spirits share price movement

 

Share price of United Spirits moved higher by 4 per cent to ₹1,480 on the BSE in Friday’s intra-day deals in an otherwise weak market. In comparison, the BSE Sensex was down 1.1 per cent at 75,553 at 11:03 AM.

 

The stock price of the breweries & distilleries company quoted higher for the third straight day, surging 6 per cent during the period, after the company reported steady earnings for the quarter ended June 2026 (Q1FY27). It traded close to its 52-week high of ₹1,489 touched on October 31, 2025.

 

Diageo India (United Spirits) is among India’s leading beverage alcohol (alcobev) companies with a portfolio of premium brands.

 

 

United Spirits – Q1 results

 

United Spirits reported 6 per cent year-on-year (YoY) growth in standalone revenue at ₹2,703 crore during the quarter with prestige and above (P&A) reporting 10.1 per cent YoY growth led by smiroff local flavour traction and broad-based growth in the portfolio. 

 

The strong growth was partially offset by the adverse policy of Maharashtra-Made Liquor (MML). Popular segment witnessed a 17.5 per cent YoY decline to ₹206 crore due to MML and policy changes in Karnataka. P&A segment volumes reported 1.3 per cent YoY decline while Popular segment volumes declined by 14.1 per cent in Q1FY27. Overall volumes declined 3.4 per cent YoY in Q1FY27, ICICI Securities said in a note.

 

Gross margin witnessed a 200bps YoY expansion to 46 per cent led by better mix, productivity flow-through, which was partially offset by the West Asia crisis. Earnings before interest, taxes, depreciation, and amortization (EBITDA) margins declined 60bps YoY to 15.8 per cent, lower than street estimates. Higher gross margin flow-through to EBITDA was restricted due to increased Ad spends during the quarter.

 

JM Financial Institutional Securities views on United Spirits

 

United Spirits has kicked off FY27 with healthy 10.1 per cent YoY growth in Q1 P&A sales aided by a superior price/mix. Ex-Maharashtra sales growth is 14.8 per cent YoY (volume growth +6.4 per cent YoY), analysts at JM Financial Institutional Securities said.

 

Visibility on P&A sales growth remains strong led by: i) a favourable policy in Karnataka (6–7 per cent of P&A sales) and no further deterioration in Maharashtra; ii) new portfolio interventions (acceleration in white spirits, scale-up in Bottled in Origin (BIO) portfolio post India-UK free trade agreement (FTA) rollout); and iii) relaunch of McDowell’s, the brokerage firm said.

 

However, operating performance is below Street’s estimate due to higher A&P spends; however, productivity initiatives, price hikes and India-UK FTA benefit (in H2) shall help cushion the impact and drive improvement over coming quarters. 

 

Overall the operating environment for the sector (healthy premiumisation, FTA rollout, possible opening of Tamil Nadu market, stable ENA prices) stays favourable, and United Spirits is poised to benefit thereof, the analyst said. They retained an 'ADD' rating on the stock with a target price of ₹1,515 (earlier ₹1,445) based on 45x standalone June’28E EPS and Royal Challengers Bengaluru (RCB) at ₹180/share (tax-adjusted per share value based on the recent deal).

United Spirits – Outlook

 

The India–UK Free Trade Agreement presents a significant opportunity for premiumisation within the Indian alcoholic beverages industry. The agreement reduces import duties on Scotch whisky and gin from 150 per cent to 75 per cent, with a phased reduction to 40 per cent over the next decade. Given India’s position as one of the world’s largest whisky markets, the trade pact is expected to improve accessibility of Scotch for Indian consumers, accelerate premiumisation trends and support growth across the alcobev and hospitality sectors, United Spirits said in its FY26 annual report.

 

India’s alcoholic beverages market is expected to exhibit robust growth as the rising number of young adults enters the legal drinking age. The addition of this large group of young adult consumers, coupled with increasing disposable incomes and evolving lifestyle preferences, is likely to boost demand across product categories. As more young adults of legal drinking age enter the market, their preferences are expected to influence consumption patterns, particularly in premium and aspirational segments.

 

Rising affluence and aspiration are accelerating the shift towards premium and super-premium alcoholic beverages, thereby creating opportunities for capturing the consumer opportunity through a high-value product portfolio accretive to margins, the company said.  ========================================================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.