United Spirits Q2 results tell a story of a company choosing to spend now and hope to earn later. The Diageo-controlled liquor maker reported standalone profit after tax of ₹462 crore for the September quarter of FY27, down 2.1% from a year ago, according to its results release filed with the exchanges on October 28. Net sales value (sales after excise duty) rose 2.8% to ₹3,258 crore from ₹3,170 crore.
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United Spirits Q2 results: what the numbers say
EBITDA fell 4.3% to ₹643 crore, and the EBITDA margin shrank 146 basis points to 19.7% from 21.2%. Gross margin actually improved, by 88 basis points to 48.0%, helped by a richer mix and productivity gains. So the squeeze came lower down the P&L.
The culprit is easy to spot. Marketing spend rose to ₹378 crore from ₹241 crore, which is 11.6% of net sales against 7.6% a year earlier. The company said it was investing behind its brands and new launches ahead of the festive season. That is a deliberate call, not a cost overrun.
Against expectations, it was a mixed card. CNBC-TV18 reported that its poll had estimated net profit of ₹471 crore and revenue of ₹3,348 crore, so both actual figures came in short, while EBITDA beat the poll estimate of ₹637 crore.
Premium holds up, Popular takes the hit
Total volumes fell 5.0% to about 15.77 million cases from 16.61 million. Split it by segment and two very different businesses show up.
- Prestige & Above: net sales value rose 6.3% to ₹3,065 crore and now makes up 94.1% of the total, up 3.1 percentage points. Volumes, though, slipped 1.2% to 14.19 million cases.
- Popular: net sales value fell 22.7% to ₹181 crore, and volumes dropped 29.7% to about 1.58 million cases.
United Spirits blamed the Popular slump on the MML policy in Maharashtra and recent excise slab changes in Karnataka, which it said hurt both realisations and growth. From this quarter the company also moved McDowell’s No.1 brandy from Popular into Prestige & Above and restated past numbers, so like-for-like comparisons need care. Excluding brandy, the company said, the premium segment’s volumes fell 1.6% and its value grew 6.5%.
Consolidated picture is weaker
On a consolidated basis the decline was steeper. Net profit fell 7.75% to ₹428 crore from ₹464 crore, and revenue from operations, which includes excise duty, slipped 2.56% to ₹7,014 crore, BusinessLine reported citing the company’s filing.
How the Street read it
The stock didn’t sulk. Shares gained as much as 4% on October 29, CNBC-TV18 reported. Brokerages split, as they often do on this name. Jefferies kept its Buy rating with a target price of ₹1,560 and pointed to first-half operating cash flow of ₹1,100 crore and free cash flow of ₹1,000 crore. CLSA stayed at Hold with a ₹1,303 target, noting that net sales growth of 2.8% missed its 5% estimate.
CEO Praveen Someshwar called it “a resilient quarter despite a strong prior-year base and regulatory headwinds” in the release, and flagged the relaunch of J&B Scotch, enabled by the India-UK free trade agreement, along with the company’s entry into ready-to-drink with Smirnoff Ice.
What we’d watch next
The festive quarter is the real test. United Spirits has front-loaded its marketing, so the December quarter needs to show premium volumes turning positive again, not just price and mix doing the lifting. And the state policy drag isn’t going away on its own. For more from this results season, see our take on Godrej Consumer’s Q2 results and the Q2 results calendar for this week.
Disclaimer: This article is for information and education only and is not investment advice. Please do your own research or consult a SEBI-registered adviser before making any investment decision.
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