Alcohol Stock Jumps 5% After Announcing Q4 Results; Brokerage Sees Up to 30% Upside

Synopsis: The share of this company rose 5% after reporting 30 percent YoY profit growth in Q4 FY26, with brokerages highlighting strong margins and up to 30 percent upside potential.

The shares of this company, which offer a premium portfolio including McDowell’s No. 1, Royal Challenge, Signature, and Johnnie Walker, came into focus after posting Q4 numbers.

With a market capitalization of Rs 96,920 crore, United Spirits Ltd’s shares on Friday made a day high of Rs 1,341.35 per share, up 5.4 percent from its previous day’s close price of Rs 1,272.25 per share. The share of this company gave a negative return of 14 percent over the last year.

Results Overview

QoQ View: The revenue from operations decreased by 17.3 percent to Rs 3,054 crore in Q4 FY26 from Rs 3,691 crore in Q3 FY26 (Dec 2025). EBIDT saw a slight decline of 3.4 percent to Rs 593 crore from Rs 614 crore in the previous quarter. However, net profit increased by 28.9 percent to Rs 539 crore from Rs 418 crore, which led to an EPS improvement of 28.9 percent to Rs 7.41 per share from Rs 5.75 in Q3 FY26.

YoY View: The revenue from operations grew by 4 percent to Rs 3,054 crore in Q4 FY26 (Mar 2026) from Rs 2,946 crore in Q4 FY25 (Mar 2025), and EBIDT grew by 17 percent to Rs 593 crore in Q4 FY26 from Rs 509 crore in Q4 FY25. Accompanied by a net profit growth of 30 percent to Rs 539 crore in Q4 FY26 from Rs 421 crore in Q4 FY25, resulting in an EPS growth of 28 percent to Rs 7.41 per share in Q4 FY26.

Fiscal year comparison: revenue from operations increasing 3.3 percent to Rs 12,467 crore in FY26 from Rs 12,069 crore in FY25. Operating margin moderated to 18 percent in FY26 compared to 19 percent in FY25. Profit before tax rose 10 percent to Rs 2,348 crore in FY26 from Rs 2,135 crore in FY25, while net profit increased 16.2 percent to Rs 1,838 crore in FY26 from Rs 1,582 crore in FY25. 

Brokerage View

Nomura on USL

Nomura maintained a ‘Buy’ rating on United Spirits with a target price of Rs 1,650, indicating a potential upside of 29.7 percent from the previous closing price, supported by strong margins and premiumisation trends.

Nomura highlighted that United Spirits reported Q4 FY26 sales below estimates, mainly due to the impact of MML (Maharashtra Made Liquor) on the Popular segment. Total volumes declined 5.6 percent YoY against expectations of a 3.6 percent decline, as demand pressure remained higher in the lower-end portfolio, while the Prestige & Above (P&A) segment remained relatively resilient.

The brokerage noted that the P&A segment, which contributed nearly 84 percent of total volumes in FY26, witnessed a comparatively lower decline of around 3 percent YoY. In contrast, the Popular segment, which accounted for nearly 17 percent of FY25 volumes, recorded a sharp 16 percent YoY decline, impacting the company’s overall sales performance during the quarter.

Despite weak volumes, Nomura pointed out that profitability remained healthy. Operating margin improved 225 basis points YoY to 19.4 percent, slightly ahead of estimates of around 18.5 percent, supported by lower advertisement spends, which declined 5.5 percent YoY. On an underlying basis, EBITDA margin stood at 20 percent, expanding 179 basis points YoY, reflecting continued premiumisation and cost discipline.

JPMorgan on USL

JPMorgan maintained an Overweight rating on United Spirits with a target price of Rs 1,445, citing strong Q4 margins, disciplined cost control, Karnataka policy support, and potential gains from the UK free trade agreement. 

JPMorgan Chase & Co. said United Spirits delivered a strong Q4 EBITDA beat despite modest revenue growth. Gross margin expanded to 47.3 percent, up 210 basis points YoY, aided by lower advertising spends and controlled employee costs, resulting in stronger operational profitability.

The brokerage also remained optimistic on FY27 growth prospects, supported by Karnataka’s pricing policy changes for the prestige and above portfolio. JPMorgan added that potential gains from the UK free trade agreement and improving business conditions could further support volume growth and margin expansion going forward.

GS on United Spirits

Goldman Sachs maintained a Buy rating on United Spirits with a target price of Rs 1,480, citing strong margin expansion and improving profitability despite softer Q4 revenue growth. 

The brokerage noted that United Spirits reported an EBITDA beat in Q4, primarily driven by strong margin expansion during the quarter despite weaker-than-expected revenue performance.

The brokerage highlighted that revenue growth and sustainability of margins will remain key monitorables going forward, as investors assess the company’s ability to maintain profitability alongside improving volume growth in the coming quarters.

About the business

United Spirits Limited (USL), trading as Diageo India, is the country’s leading alcoholic beverage company and a subsidiary of Diageo PLC. Headquartered in Bengaluru, it operates 35+ manufacturing facilities, offering a premium portfolio including McDowell’s No. 1, Royal Challenge, Signature, and Johnnie Walker.

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