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We expect our alcoholic beverage coverage universe revenue to grow by 9.5% in 2QFY26, faster vs. HPC staples and some of the large F&B players. In terms of segmental performance, we expect spirit players to outperform with higher volume/sales growth compared to United Breweries in the beer segment. Further, within individual companies, we forecast Radico Khaitan to outperform United Spirits as well as United Breweries across metrics with higher sales as well as EBITDA growth in the quarter. On the profitability front, with input cost environment largely stable to benign, we expect sequential improvement (stable YoY) in gross margin to continue across players. Strong sales growth-led operating leverage will aid EBITDA margin expansion for Radico Khaitan while scale deleverage will lead to lower EBITDA growth for United Spirits and decline for United Breweries for the quarter. Going forward, Radico's commentary on execution in the luxury segment, UNSP's assessment of Maharashtra policy impact and commensurate impact on its P&A guidance, and pace of margin expansion for United Breweries will be key monitorable. We maintain our positive stance on the space and Radico Khaitan remains our preferred pick in the alcoholic beverages segment.

* Radico Khaitan – Outperformance vs. peers to continue: We expect sales growth of c.26% YoY for Radico Khaitan led by c.33%/12% YoY growth in IMFL/Non-IMFL segment. Two of its large markets (Uttar Pradesh and Andhra Pradesh, which account for c.40% of sales) are seeing healthy growth due to favorable regulatory environment. Within the IMFL segment, we expect P&A sales growth of 27% (volume growth of c.25%) and regular segment to see much higher growth of c.53% (volume growth of c.57%). Revenue outperformance for Radico is led by sustained traction in the mainstay vodka segment, strong growth in the luxury segment, and continued benefit of route to market change in Andhra Pradesh. Stable RM and improved mix will aid sequential uptick in gross margins, which along with scale benefit will aid c.31% EBIDTA growth with margin expansion of c.60bps YoY. This coupled with lower interest expense will result in higher PAT growth of c.47% YoY for the quarter, best in class growth within our consumer coverage universe.

* United Spirits – Soft base, continued benefit of Andhra Pradesh market to support sales growth despite regulatory challenges in Maharashtra: We estimate sales growth of c.7% YoY, moderation vs. 1QFY26 trend as benefit of soft base (base quarter volumes were weak due to front loading in 1QFY25), better growths in Karnataka, UP and route to market change in Andhra Pradesh is partially offset by regulatory headwind in the key market of Maharashtra (mid-high teen contribution to overall sales/EBITDA for United Spirits). We factor in P&A sales growth of 8% YoY led by 5% volume growth and better price/mix, indicative of a resilient performance. Popular segment is likely to see low-single-digit sales growth for the quarter. While benefit of stable input costs, productivity initiatives and tight control over other expenses are likely to continue, challenges in Maharashtra (better margin state) will weigh on profitability, resulting in c.6% EBITDA growth for the quarter as per our estimate.

* United Breweries – Soft quarter, pace of margin expansion will be key: We forecast sales growth of c.4% YoY (moderate vs. c.9-20% sales growth seen over the last 8 quarters). We estimate flat volumes for the quarter impacted by adverse monsoons, weakness in West Bengal, Rajasthan and regulatory headwind in key market of Karnataka (although MoM decline in beer volume for Karnataka has stopped in September). Benign RM and better price/mix will continue to aid gross margin which will be partially offset by weaker state mix/higher infusion of new glass bottles for the premium segment. Scale deleverage to result in c.4% decline EBITDA, which, along with higher interest expense, will result in PAT decline of c.13% YoY for the quarter.

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