United Spirits Q4 Review: Premiumisation Supports Margin Sustainability; ICICI Securities Maintains 'Add'

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ICICI Securities Report

United Spirits Ltd. delivered a strong Q4 FY25 performance with revenue/ Ebitda growth of 10%/ 40% YoY driven by sustained performance in Prestige and Above segment. P&A brands revenue grew 13.2% YoY with volume/ realisation growth of 9%/ 4% YoY. Popular segment grew 1% as volume declined by 2%, offset by 3% realisation growth.

The performance during the quarter was partially aided by the commencement of business in the state of Andhra Pradesh. Profitability improvement (gross/ Ebitda margin expansion of 114bps/ 356bps YoY) was driven by premiumisation and better control on overheads, which should continue going ahead.

In our view, United Spirits should continue with its strong performance on the back of sustained momentum in P&A segment supported by innovation and supply chain agility.

During FY25, despite an increase in receivable (increase of Rs 5.25 billion) largely on account of statutory due from Telangana state, free cash flow generation was strong at Rs 14.4 billion. Maintain Add.

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