The United Spirits share price zoomed over 4% intra-day after the second-quarter margins reached new highs. Tough D-street cheered the Q2 performance, the brokerage firm Motilal Oswal stayed cautious. In their ctober 31 report, the leading domestic brokerage house said the “performance was solid but valuations were already stretched.”

 Motilal Oswal has a ‘Neutral’ rating on United Spirits with a target price of Rs 1,399.

Motilal Oswal on United Spirits: Growth outlook steady

Motilal Oswal expects United Spirits to maintain steady growth over the next three years, with annual revenue growth of 8–9 percent and margins around 18 percent. The brokerage projects sales of Rs 124.6 billion for FY26, rising to Rs 148.4 billion by FY28, while EBITDA is expected to move from Rs 22.1 billion to Rs 27.2 billion in the same period.

Earnings per share (EPS) are likely to increase from Rs 21.3 in FY26 to Rs 26.7 in FY28, with return on equity staying between 14 and 16 percent. At the same time, the stock trades at 63.6 times FY26 earnings and 50.7 times FY28, levels Motilal Oswal considers demanding.

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For that reason, the brokerage maintained its ‘Neutral’ rating and Rs 1,399 target price, implying the stock is close to full value after the recent rally.

Motilal Oswal’s report described the quarter as a strong one by all operational standards, revenue, margins, and profitability improved meaningfully. Yet, it also pointed out that the market may have already priced in much of this progress. 

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Motilal Oswal on United Spirits: Margins at historic highs

Profitability hit a new peak this quarter. According to Motilal Oswal, the company delivered an EBITDA margin of 21.2 percent, the highest ever, improving 340 basis points year-on-year and beating the estimate of 18.5 percent. The gross margin improved 190 basis points to 47.1 percent, supported by firm pricing, a premium product mix, and steady input costs.

Employee costs rose 8%, and other operating expenses were up 13% but advertising and promotion spending dropped 6 percent, indicating tighter cost discipline. Motilal Oswal credited this to more efficient marketing allocation and better control of overheads without cutting growth investments.

United Spirits Q2 performance

United Spirits posted a 36.1 percent jump in consolidated net profit to Rs 464 crore for the September quarter, with revenue up 11.6 percent to Rs 3,173 crore. Profit before interest, depreciation, and tax rose 33.6 percent to Rs 740 crore compared with the same period last year.

Standalone sales stood at Rs 31.7 billion, rising 11.5 percent year-on-year. The gain came from its re-entry into Andhra Pradesh and a series of new launches that helped push volumes higher despite regulatory hurdles in Maharashtra.

Overall volumes grew 8 percent, led by 8 percent growth in the Prestige & Above (P&A) segment and 6 percent growth in the Popular segment. The P&A category about ninety percent of total revenue climbed 12 percent, while Popular brands grew 9 percent.

Motilal Oswal on United Spirits: Margins at historic highs

Profitability hit a new peak this quarter. According to Motilal Oswal, the company delivered an EBITDA margin of 21.2 percent, the highest ever, improving 340 basis points year-on-year and beating the estimate of 18.5 percent. The gross margin improved 190 basis points to 47.1 percent, supported by firm pricing, a premium product mix, and steady input costs.

Employee costs rose 8 percent, and other operating expenses were up 13 percent, but advertising and promotion spending dropped 6 percent, indicating tighter cost discipline. Motilal Oswal credited this to more efficient marketing allocation and better control of overheads without cutting growth investments.

United Spirits: Management guidance upbeat

Praveen Someshwar, Managing Director and Chief Executive Officer of United Spirits, said:

“We have delivered a strong quarter on topline and Ebitda growth and ended the first half in line with our expectations while navigating regulatory headwinds in Maharashtra. Looking ahead, the second half of the year is the all-important festive, holiday and wedding season.”

His comments carried a mix of satisfaction and realism, the company has delivered well so far, but the next half will determine whether this pace can hold.