United Spirits posts 24.7% profit growth in Q3 FY26 as premium brands lift margins despite policy headwinds
Diageo India reports strong Q3 profit growth driven by premiumisation, even as regulatory pressures weigh on mass-market spirits.
INDIA – United Spirits Ltd., one of India’s leading beverage alcohol companies and the Indian arm of Diageo, has reported a sharp rise in profitability for the third quarter of FY26, supported by premiumisation and steady demand for higher-end brands.
The company posted a 24.7% increase in profit after tax (PAT) to Rs 529 crore (US$63.7 million), delivering year-on-year growth of 11.8% and a net profit margin of 14.4%.
During the quarter, gross profit rose 12.3%, while the gross margin expanded to 46.2%, an increase of 219 basis points compared with the same period last year. United Spirits said the improvement was driven by “premiumisation-led mix enhancement, ongoing productivity initiatives and the flow-through of prior-year pricing actions”.
Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 618 crore (US$74.5 million), up 5.1% year on year. The EBITDA margin came in at 16.8%, contracting by 35 basis points, largely due to higher advertising and promotion spending.
Net Sales Value (NSV) for Diageo India reached Rs 3,694 crore (US$445.3 million), representing a 7.6% year-on-year increase. The company said this was driven by strong performance in the top end of its portfolio, although growth was partly offset by “the adverse policy-led impact in Maharashtra and lapping the one-time retail pipeline fill in Andhra Pradesh in the prior year”.
Within the 7.3% overall growth, the Prestige & Above (P&A) segment grew 8.2%, while NSV for the Popular segment declined 4.6%, mainly due to the Maharashtra impact.
Commenting on the results, Praveen Someshwar, CEO and Managing Director of Diageo India, said: “We have delivered a resilient quarter overall while navigating policy headwinds in one of our most salient markets. Strong momentum in Rest of India and at the top-end of our portfolio bodes well.”
Someshwar added: “We continue to make robust investments in our trademarks and execution capabilities to sustain the long-term value for all our stakeholders.”
He cautioned that challenges in key states such as Maharashtra and Telangana remain, even though early signs of demand recovery are emerging.
The maker of Johnnie Walker and Black Dog said consumers are spending on premium brands for social occasions and festivals but remain cautious on everyday purchases, as distribution changes, higher taxes and pressure on discretionary spending continue to affect volumes.
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