United Spirits Ltd. share price target

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%.

Quarterly Update Q1FY25

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.

Quarterly Update Q4FY24

United Spirits (UNSP) registered a 6.9% YoY revenue growth (est. 3.9%). The
Prestige & Above (P&A) segment grew 6.5% YoY, with volume growth of
3.7% YoY (10% four-year CAGR). The popular segment posted 3.3%/4.0%
YoY value/volume growth

Quarterly Update Q3FY24

Quarterly Update Q2FY24

Double-digit revenue growth trajectory continues as Prestige and Above (P&A) continued to outperform primarily led by higher realisations (driven by premiumisation) as volumes growth trajectory decelerates to 4% YoY (vs ~10% over last two quarters). This is likely due to shift in festive season and BIO normalisation benefits getting over.

Quarterly Update Q1FY24

Prestige and Above (P&A) continued to outperform led by mix improvement, portfolio reshape initiatives through innovations and renovations. Balanced volume (10% YoY) and price/mix growth (11% YoY) in P&A is positive vs largely mix-driven growth in previous few quarters.

Quarterly Update Q4FY23

Continued outperformance in Prestige & Above (P&A) in Q4FY23 driven by portfolio reshape initiatives through innovations and renovations is pleasing. Further, balanced volume (~10% YoY) and price / mix growth (~12% YoY) in Q4FY23 vs largely mix driven growth in previous few quarters is also good though it had benefits of BIO normalisation.

Initiating Coverage Report

Continued outperformance in Prestige & Above (P&A) portfolio, driven by premiumization (higher scotch sales), is encouraging. Value growth in P&A stayed significantly ahead of volume growth. Post adjusting for the slump-sale of the popular portfolio in base quarter; we note that the segment’s performance continues to remain subdued (2% revenue growth YoY, 3% volume growth YoY).

In our view, UNSP’s stock appears well poised to gain (in absolute terms) in the immediate near term from potential price hike benefits. We have an ADD rating and a 12-month target price of Rs940.