Neutral United Spirits Ltd For Target Rs. 1,500 by Motilal Oswal Financial Services Ltd
* The P&A segment’s volume growth remained subdued in 1QFY26, partly due to a high base in 1QFY25, which had benefited from election-related inventory stocking. We model 5% volume growth and 7% revenue growth in the P&A segment.
* We model 5% volume growth and 8% revenue growth in the popular segment.
* Gross margins are expected to remain stable at 44.5%, given the stabilization in input prices. EBITDA margin is expected to contract 270bp YoY, impacted by elevated expenses and some degree of operating deleverage during the quarter.
* The impact of Maharashtra’s import duty changes, primarily affecting the lower- to mid-prestige segments, will be more visible in 2QFY26. However, the upper prestige segment remains largely unaffected.
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