United Spirits Q1 FY27 Results (NSE: UNITDSPR)
Signal: Growth reaccelerated
The read
Headline PAT beat is entirely due to discontinued sports profits; continuing operations PAT fell 7.8% on exceptional severance costs. Gross margin expanded 240bps on input cost tailwind, but higher A&P spend kept EBITDA margin flat YoY. The core spirits business grew revenue modestly but profitability remains under pressure from reinvestment.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹3,256 Cr | 7.8% | 4.4% |
| EBIT | ₹693 Cr | 7.6% | |
| Net profit | ₹463 Cr | 11.0% | |
| EPS | ₹6.52 | 11.1% | |
| EBIT margin | 21.3% |
P&L walk
Net segment revenue (ex-excise) grew 7.8% YoY to ₹3,256 Cr, driven by beverage alcohol (+6.2% to ₹2,708 Cr) and sports seasonal surge. EBITDA margin improved 390bps QoQ to 21.3% (YoY flat). Gross margin expanded 240bps YoY to 55.1% on raw material cost decline (44.9% of net sales vs 47.3% a year ago). A&P spend rose to 9.6% of net sales (from 7.7% YoY). Continuing operations PAT fell 7.8% due to ₹81 Cr exceptional severance charges. Discontinued sports segment contributed ₹226 Cr profit (vs ₹160 Cr YoY), masking weakness in core.
Segments
Sports segment (discontinued) delivered EBITDA of ₹264 Cr on net revenue ₹552 Cr (47.8% margin), propelled by IPL season; beverage alcohol EBITDA grew only 2.4% to ₹429 Cr, with margin at 15.8% (vs 16.4% a year ago). The pending sale of RCSPL makes sports profit non-recurring.
Key positives
- Net revenue (ex-excise) grew 7.8% YoY led by beverage alcohol (+6.2%) and sports seasonality.
- Gross margin expanded 240bps YoY to 55.1% on lower raw material costs.
- EBITDA margin improved 390bps sequentially to 21.3%, supported by gross margin recovery and lower finance costs.
- Discontinued sports business contributed ₹226 Cr PAT, up 41% YoY, boosting total profit.
Key concerns
- Continuing operations PAT fell 7.8% YoY to ₹237 Cr, dragged by ₹81 Cr exceptional severance charges.
- Beverage alcohol EBITDA margin contracted 60bps YoY to 15.8% despite gross margin improvement, as A&P spend surged to 9.6% of net sales (from 7.7%).
- Sports segment profit is seasonal and non-recurring (sale pending); core earnings growth is anaemic.
- Regulatory uncertainties persist from historical inquiries (refer note 5) and ongoing litigation with IDBI Bank.
Research and educational content only. Not investment advice.