Motilal Oswal's research report on United Spirits
UNSP reported revenue growth of 8% YoY (in line) in 1QFY25. Prestige & Above (P&A) segment clocked revenue growth of 10% YoY and volume growth of 5% YoY. The popular segment posted a decline of 3%/5% YoY in value/volume. The premiumization trends in the liquor category continued to drive the P&A portfolio. Pricing strategies also played a role in achieving better value growth. The proposed excise policy reform in Karnataka, which includes a duty reduction, will enhance demand trends and foster premiumization in the market. The company remains committed to driving double-digit growth in FY25, backed by better growth in 2HFY25.
Outlook
We value UNSP at 55x Jun’26E standalone EPS and include INR150 per share for its RCB + non-core assets to arrive at a TP of INR1,400. With the limited upside, we maintain our Neutral rating on the stock.
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