EL7.AI
StocksMedium•29 October 2026•
4 min read

United Spirits shares rise 4% to 1,278 rupees despite second-quarter profit decline

Key Facts

1United Spirits shares rose as much as 4% on October 29, reaching 1,278 rupees during the session.
2Net sales were 3,258 crore rupees, up 2.8%, while EBITDA fell 4.3% to 643 crore rupees in the second quarter.
3Net profit fell 2.1% to 462 crore rupees in the second quarter.
4Gross margin widened 88 basis points to 48%, and gross profit rose 4.7% to 1,563 crore rupees.
5Advertising and promotional spending rose 57% to 378 crore rupees, from 241 crore rupees a year earlier.

United Spirits shares rose as much as 4% on Thursday, October 29, touching 1,278 rupees during the session, a day after the company announced results for the second quarter and first half ended September 30, 2026. The company announced its unaudited results on October 28, showing net sales growth to 3,258 crore rupees, against year-on-year declines in operating profit and net profit. According to Diageo India’s statement, net sales rose 2.8% in the second quarter, while earnings before interest, tax, depreciation and amortisation fell 4.3% to 643 crore rupees. The EBITDA margin was 19.7%. Net profit after tax also fell 2.1% to 462 crore rupees, highlighting the divergence between revenue growth and profit pressures during the period.

By contrast, gross margin improved 88 basis points to 48%, with gross profit rising 4.7% to 1,563 crore rupees, according to Exchange4Media. The coverage attributed this to an improved product mix and productivity gains, while the company said the two factors partly supported margins in the face of the continuing adverse impact of the West Asia crisis. The improvement in gross profit points to stronger performance before the remaining operating costs, but coincided with declines in EBITDA and net profit. In the first half, gross profit rose 7.5% and its margin reached 47.1%. The company attributed this to pricing, mix and productivity initiatives, alongside the continuing adverse impact of the West Asia crisis. For the first half as a whole, net sales rose 4.2% to 5,961 crore rupees, while EBITDA fell 1.1% to 1,075 crore rupees, with a margin of 18%.

United Spirits increased advertising and promotional spending 57% to 378 crore rupees in the second quarter, from 241 crore rupees in the year-earlier period, according to Exchange4Media. As a result, its advertising and promotion reinvestment rate rose to 11.6% of net sales, compared with 7.6% a year earlier. The increased spending came as the company prepared for the festive season, according to the coverage, while the company said it continued to invest in its brands despite a strong comparison base and regulatory hurdles. Chief Executive Officer and Managing Director Praveen Someshwar said: "We delivered a resilient quarter despite a strong prior-year base and regulatory hurdles, while continuing to invest in our brands for long-term growth." The increase in marketing spending provides context for results that combined an improved gross margin with lower operating profit.

Sales varied across the company’s categories: Popular segment sales fell 22.7% on a like-for-like basis to 181 crore rupees in the second quarter. Exchange4Media linked the segment’s weakness to the impact of policies in Maharashtra and changes to excise tax slabs in Karnataka. By contrast, a Goldman Sachs summary pointed to a 1.2% decline in Prestige & Above sales volumes, although the coverage gave no detailed numerical comparison for the other categories. This reflects uneven pressure across the company’s portfolio, with the Popular segment affected by policy and tax factors and volumes in higher-end categories also declining. The brokerage summary did not establish that those tax changes had a broader, actual effect on the company’s overall performance in the quarter.

Goldman Sachs maintained its buy recommendation and a target price of 1,575 rupees per share, according to NDTV Profit on October 29. The summary said revenue growth of 2.9% came in below estimates and EBITDA fell 5% year on year, but exceeded expectations. The revenue growth rate in the brokerage summary differs from the 2.8% increase in net sales reported by the company; the summary also cited a decline in Prestige & Above volumes. The assessment followed the results announcement on October 28, while the stock rose during the next day’s session, gaining as much as 4% and reaching an intraday high of 1,278 rupees. The stock’s session gain therefore coincided with declines in year-on-year profit metrics, while Goldman Sachs kept its recommendation and target price unchanged.

Looking ahead, the company said it was confident about the festive quarter, following the relaunch of J&B Scotch and its entry into the ready-to-drink category with Smirnoff Ice. Someshwar said: "We are looking forward to the festive quarter with confidence." The company also cited the relaunch of J&B Scotch, supported by the India-UK free trade agreement, and the launch of Smirnoff Ice as it entered the ready-to-drink category. This follows a quarter in which the company said it continued to invest in its brands despite a strong comparison base and regulatory hurdles. Its statement identifies the festive quarter as the next period it is looking toward, without giving a specific sales or profit forecast.