United Spirits: Headwinds fading; tailwinds from 2HFY27F

Research evidence excerpt

United Spirits: Headwinds fading; tailwinds from 2HFY27F

Global Markets Research

United Spirits UNSP.NS UNITDSPR IN 24 July 2026

EQUITY: CONSUMER RELATED

Headwinds fading; tailwinds from 2HFY27F Rating Remains Buy

Guidance maintained: Double-digit sales growth with P&A volume growth of 5-6% and 6-7% price- Target price

INR 1,600mix growth; OPM in mid-to-high teens with profit growth ahead of sales growth IncreasedINR 1,500 from

Ex-Maharashtra impact growth is strong and improving aided by better mix Closing23 July 2026price INR 1,418

While reported P&A (Prestige and above) volumes/sales were -1.3%/+10.1% y-y, management

highlighted that ex-Maharashtra (MH), it grew 6.4%/+14.8% y-y, implying rest-of-India growth remains Implied upside +12.8%

strong, and gives a likely indication of growth momentum for 2HFY27F once the impact from MML

(Maharashtra-made Liquor) anniversarizes from 2Q27. It maintained it guidance and highlighted that it has Market Cap (USD mn) 10,681.5

received approval from the Competition Commission of India for the sale of Royal Challengers Sports. It is ADT (USD mn) 14.7

awaiting other approvals, and is on track to close the transaction by Sep/Oct-26.

Relative performance chartRegulatory tailwinds from Karnataka and UK-FTA to aid recovery in 2HFY27F

Karnataka (KA), which accounts for 6-7% of USL’s P&A sales, saw an excise policy change with effect

from (w.e.f.) May-26, which led to 10-15% price reduction in P&A, creating a structural tailwind for

premiumization, as consumers will likely trade up and drive strong volume growth of 15%+, according to

USL. However, Popular segment volumes will remain under pressure due to tax/price hikes in KA. USL

believes that India-UK free trade agreement (FTA) w.e.f. 15-Jul-26 will improve accessibility of Scotch,