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Informist, Friday, Oct. 24, 2025

 

By Avishek Rakshit

 

KOLKATA – An increase in sales of premium liquor in Andhra Pradesh, Uttar Pradesh, and Karnataka is expected to drive volume-led top line growth for United Spirits Ltd. for the September quarter. However, regulatory challenges under Maharashtra's new liquor policy may partly offset these gains and weigh on profitability.

 

United Spirits, the Indian division of the world's fourth-largest alcoholic beverage company by market capitalisation, Diageo Plc, is expected to report a 9.3% on-year increase in its net profit for the September quarter to INR 3.7 billion. The company's revenue is expected to rise 7.8% on year to INR 30.6 billion, according to the average of estimates from seven brokerages.

 

On a sequential basis, the net profit is likely to rise 36% and the revenue is expected to increase 20%. The alcoholic beverages company, which sells signature Scotch whisky brands such as Johnnie Walker, Black Dog, Black & White, VAT 69, and Antiquity, will declare its results for the September quarter Thursday.

 

The highest estimate for the company's net profit is INR 3.8 billion from Kotak Securities Ltd. and the lowest estimate of INR 3.4 billion is from JM Financial Institutional Securities Pvt. Ltd. The highest estimate for revenue is by YES Securities (India) Ltd. at INR 31.2 billion and the lowest is by Motilal Oswal Financial Services Ltd. at INR 30.4 billion.

 

Most brokerages expect United Spirits' premium and luxury portfolio, known in the industry as the 'prestige and above' segment, to post on-year volume growth of 6.5–7.5%. This is the company's most crucial segment, contributing over 85% of its annual net sales value after taxes and regulatory levies. It is also the key volume driver for United Spirits, as it usually accounts for 84% of the annual sales volume. Kotak Securities expects United Spirits' sales volumes for the September quarter to rise to 13.8 million cases.

 

Products in the mass category, termed as the 'popular' product range, are also expected to see a volume growth of around 6% owing to increased sales of these products in Andhra Pradesh and Uttar Pradesh. Andhra Pradesh ranks second in the country after Telangana in terms of annual per capita spends on liquor consumption at INR 1,306 during 2022-23 (Apr-Mar), thus making this state one of the most important markets for any liquor company, according to a study published in August 2024 by the National Institute of Public Finance and Policy, an autonomous research institute under the Ministry of Finance.

 

However, Maharashtra is a profitability driver for liquor companies, as margin accretive and higher priced products are sold more in this state than in Andhra Pradesh. The duty hike by the Maharashtra government and the current regulatory framework in the state may prove to be a dampener on the profitability front for any liquor company in the reporting quarter. As a result, JM Financial expects United Spirits' margins to get negatively affected which will weigh on its profitability.

 

Nuvama Wealth Management Ltd. expects United Spirits' gross margins to decline 40 basis points on year to 44.8%. However, the company's earnings before interest, tax, depreciation, and amortisation margin may expand 60 basis points on year to 18.5%, as advertising and promotions spends are expected to moderate due to the company's focus on cost control measures, Kotak Securities said.

 

United Spirits is expected to report an EBITDA of INR 5.5 billion in the September quarter, according to the average of six estimates. Kotak Securities' estimate for EBITDA is the highest at INR 5.7 billion and Nirmal Bang Equities Pvt. Ltd.'s estimate of INR 5.3 billion is the lowest.

 

On Friday, shares of United Spirits ended 0.5% higher at INR 1,357.40 on the National Stock Exchange. The shares rose nearly 3% since the company announced its June quarter earnings in August.

 

Of the 11 research reports on the company available with Informist, nine have a 'buy' rating on the stock, with an average target price of INR 1,570.7. One brokerage each have a 'hold' and a 'sell' rating on the stock, respectively.

 

The following are the Jul-Sept earnings estimates for United Spirits India from seven brokerages in descending order of the estimate of net profit in INR million:

 

Broker Name	Net sales (in INR million)	Net profit (in INR million)	EBITDA (in INR million)
Kotak Securities Ltd	30,770	3,845	5,677
Motilal Oswal Financial Services Ltd	30,385	3,797	5,621
Nuvama Wealth Management Ltd	30,419	3,729	5,475
YES Securities (India) Ltd	31,228	3,728	5,527
Anand Rathi Share and Stock Brokers Ltd	30,612	3,631
Nirmal Bang Equities Pvt Ltd	30,610	3,561	5,265
JM Financial Institutional Securities Pvt Ltd	30,429	3,350	5,370
Average	30,636	3,663	5,489

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Subhojit Sarkar

 

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