United Spirits keeps its nerve as P&A growth leads Q4 surge

One of India’s biggest spirits producers, United Spirits, has posted a resilient set of fourth-quarter and full-year results, with CEO Praveen Someshwar striking a confident note despite operating in what he called a “challenging demand environment”. The post United Spirits keeps its nerve as P&A growth leads Q4 surge appeared first on The Drinks Business.

May 21, 2025 - 11:15

United Spirits keeps its nerve as P&A growth leads Q4 surge

One of India’s biggest spirits producers, United Spirits, has posted a resilient set of fourth-quarter and full-year results, with CEO Praveen Someshwar striking a confident note despite operating in what he called a “challenging demand environment”. Map of India: One of India’s biggest spirits producers, United Spirits, has posted a resilient set of fourth-quarter and full-year results, with CEO Praveen Someshwar striking a confident note despite operating in what he called a “challenging demand environment”.

The business continues to push ahead with premiumisation and productivity, both vital as consumer confidence wavers and inflationary pressures linger across key inputs. Premiumisation remains central to United Spirits’ strategy. The company’s Prestige & Above (P&A) portfolio, which includes its more aspirational labels, led the way, growing 13.2% in the fourth quarter and 9.9% across the full year. The P&A segment now accounts for nearly 88.5% of total underlying net sales. These figures put the Diageo-owned business in sync with a broader global trend, as consumers, particularly in emerging markets, increasingly gravitate towards brands they perceive to be worth the extra rupee. That has buoyed United Spirits’ margins. Standalone EBITDA for the fourth quarter rose 39.5% to INR505 crore, while EBITDA margin jumped to 17.1%, a notable 358 basis points higher than the same period last year. The full-year standalone EBITDA margin was 17.8%, also significantly ahead of the prior year’s 16.0%. Profit after tax came in at INR451 crore for Q4 and INR1,558 crore for FY25. The net profit margin for the full year stood at 13.5%, up from 12.3% the previous year.

Steady in the face of headwinds

India’s beverage alcohol market has been volatile in recent quarters. Regulatory shifts, state-specific disruptions and pricing pressures have made life trickier for major players. But United Spirits has not been sitting still. In Andhra Pradesh, a market it had exited five years ago, the company successfully re-entered operations in September 2024, a move which provided a fillip to year-on-year comparables. “The challenging demand environment notwithstanding, we have delivered 13.2% NSV growth for P&A in Q4FY25 and 9.9% P&A growth for FY25, and a leveraged EBITDA growth that takes us to our medium-term guidance,” said Someshwar, also managing director. The group’s consolidated underlying net sales value for the quarter was INR3,068 crore, a rise of 10.2%, while the full year figure stood at INR12,106 crore, up 6.9%. Reported figures were only slightly lower, impacted in part by a quieter Indian Premier League season for the company’s franchise, Royal Challengers Bengaluru. Consolidated profit after tax for the year was INR1,582 crore, a 12.4% increase year-on-year.

Margin management and marketing muscle

United Spirits has leaned into pricing and cost controls to manage margins. For the quarter, gross margin expanded 115 basis points to 44.5%, supported by “headline pricing realisation flow-through, ongoing revenue growth management and cogs productivity initiatives,” according to the company. Commodity inflation, particularly for extra neutral alcohol (ENA), remains a concern but has so far been contained. Despite a tighter grip on costs, brand investment has not been neglected. The advertising and promotional (A&P) reinvestment rate stood at 10.8% of net sales for the quarter, and 9.7% for the full year, a level consistent with previous periods. Interest expenses decreased by 24.1% in Q4 to INR22 crore, largely due to non-debt-related items. The company also absorbed an exceptional charge of INR65 crore during the year as part of a multi-year supply agility programme.

A measured path forward

The dividend of INR8.0 per share, recommended by the board for FY25, is subject to shareholder approval, a quiet vote of confidence in future earnings stability. Someshwar reiterated the company’s long-term outlook: “Looking ahead, we remain focused on delivering sustained growth while creating long-term value for all our stakeholders in line with our ambition to be the best performing, most trusted and respected CPG company in India.” Volume growth was modest across the year, with 4.1% growth to 63.9 million cases. Within that, the Popular segment continued to shrink slightly in volume terms, down 1.9%, although it held steady on value. The message from United Spirits is clear: premiumisation, margin discipline and brand investment remain its central pillars. If the broader spirits market is navigating a cyclical correction, as many global players believe, then the company seems well-positioned to emerge leaner, stronger and more focused when the next wave of demand hits.