United Spirits Q2 FY27 Results (NSE: UNITDSPR)
Signal: Revenue declined
The read
The quarter shows premiumisation working but not yet translating into profit growth: NSV rose 2.8% to ₹3,258 crore and P&A value grew 6.3%, while volumes fell 5.0%, EBITDA declined 4.3% to ₹643 crore and margin contracted 146bps to 19.7% as A&P investment rose to 11.6% of NSV. This is an investment-led margin reset rather than an input-cost failure, with gross margin improving 88bps to 48.0%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹7,001 Cr | -2.7% | N/A |
| EBIT | ₹633 Cr | -7.3% | |
| Net profit | ₹462 Cr | -2.1% | |
| EPS | ₹6.35 | -2.2% | |
| EBIT margin | 19.7% |
P&L walk
Q2FY27 net sales value increased 2.8% to ₹3,258 crore, led by Prestige & Above growth of 6.3%, but EBITDA declined 4.3% to ₹643 crore as A&P spending rose to 11.6% of NSV from 7.6%; PAT fell 2.1% to ₹462 crore despite ₹11 crore of exceptional income.
Segments
Prestige & Above drove the quarter with NSV up 6.3% to ₹3,065 crore and 94.1% saliency, while Popular dragged growth with NSV down 22.7% to ₹181 crore and volume down 29.7%, reflecting Maharashtra and Karnataka policy headwinds.
Key positives
- Prestige & Above NSV grew 6.3% YoY to ₹3,065 crore despite a strong prior-year base, supported by Smirnoff local-flavour innovation, the J&B Scotch relaunch and luxury portfolio growth.
- Gross margin expanded 88bps YoY to 48.0% through better mix and productivity flow-through, while P&A saliency increased to 94.1% from 91.0%.
- A&P spending increased to 11.6% of NSV from 7.6%, indicating deliberate brand and launch investment ahead of the festive season rather than passive cost inflation.
- The company entered RTD with Smirnoff Ice and relaunched J&B Scotch under the India-UK FTA, adding new premiumisation avenues.
Key concerns
- EBITDA declined 4.3% YoY to ₹643 crore and EBITDA margin contracted 146bps to 19.7% as A&P spending increased by ₹137 crore to ₹378 crore.
- Total volume declined 5.0% YoY to 15,769 thousand cases, showing that value growth was price/mix-led rather than volume-led.
- Popular NSV declined 22.7% to ₹181 crore, with the filing citing Maharashtra MML impact and Karnataka excise-slab changes as key pressures.
- H1FY27 EBITDA margin contracted 97bps to 18.0% and EBITDA declined 1.1% to ₹1,075 crore, indicating that the Q2 margin pressure is visible in the first-half trajectory.
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