United Spirits' gross margin expanded by 114 bps YoY to 44.5% led by headline pricing realisation, stable commodity basket (glass), productivity savings and better mix. Ebitda margin expanded 356bps YoY to 17.1% (FY25: 17.8%, +180bps YoY), supported by strong gross profit growth and cost discipline across the value chain.
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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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