United Spirits: 60x P/E – Paying Champagne Prices for Beer Growth
1. At a Glance
India’s largest liquor company just poured Q1 FY26 numbers that were a mixed cocktail — Net Sales Value up 9.4%, but EBITDA down 9.7% and PAT down 11.9% YoY. On the rocks: they closed the acquisition of Nao Spirits (makers of Greater Than and Hapusa gins) to capture the premium craft segment. But with a P/E over 60, investors are paying Royal Salute prices for what’s currently a large peg of Antiquity Blue.
2. Introduction
United Spirits, the Diageo India flagship, is basically the bartender to half the country. From Johnnie Walker to McDowell’s No. 1, they have more than 80 brands, including nine million-case brands — and one that sells over 25 million cases annually (guess who? Yes, McDowell’s).
The growth story is about premiumisation — moving consumers from cheap, throat-burning IMFL to smoother, pricier stuff. But the last five years have seen only 5% sales CAGR, and now margins are feeling the hangover from inflation and competitive pricing.
3. Business Model (WTF Do They Even Do?)
It’s simple:
Make booze — Scotch, IMFL whisky, brandy, rum, vodka, gin.
Import & distribute Diageo’s global brands.
Premiumise the portfolio — target the growing middle class that wants to upgrade from “quarter bottles” to “single malts.”
The strategy: keep low-margin mass brands but push premium labels where margins are double. The Nao Spirits buy shows they want to ride the craft gin wave before someone else stirs the martini.
