Motilal Oswal's research report on United Spirits
United Spirits (UNSP) reported revenue growth of 15% YoY (est. 13%) in 3QFY25, along with total volume growth of 10% (est. 8%). The Prestige & Above (P&A) segment clocked volume and value growth of 11% and 16%. The Popular segment posted 6%/10% YoY volume/value growth. Andhra Pradesh (AP) saw a quick ramp-up after the policy change and contributed 6% to the overall revenue in 3Q. Positive consumer sentiment during the festive period, along with higher wedding counts, sustained healthy demand for liquor throughout the quarter. However, the benefits from AP channel filling will narrow down from 4Q onwards. As a result, we will need to track the underlying demand trend, which appears weaker for many categories in the near term (particularly in urban).
Outlook
We value UNSP at a 60x Dec’26E standalone EPS and include INR250/share for its RCB + non-core assets to arrive at a TP of INR1,650. With the limited upside, we maintain our Neutral rating on the stock.
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