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United Spirits Growth Driven by Strategic Focus on Premiumisation

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United Spirits Ltd. reported a resilient performance for the third quarter and nine months ended 31 December 2025, navigating policy headwinds in key markets while sustaining growth momentum through premiumisation and portfolio strength.

The Diageo-controlled company posted consolidated net sales value (NSV) of `3,694 crore in Q3FY26, marking a year-on-year growth of 7.6%, while nine-month consolidated NSV stood at `9,888 crore, up 9.4%. The performance was largely driven by the standalone business, which continued to benefit from strong traction in the Prestige & Above (P&A) segment and improving product mix.

Sharp Uptick in Profitability

Consolidated EBITDA for the quarter rose 5.5% year-on-year to `599 crore, with EBITDA for the nine-month period reaching `1,903 crore, reflecting a growth of 6.7%. Excluding a one-off indirect tax item impact of `40 crore recorded in the first quarter of FY26, underlying EBITDA for the nine months was higher at `1,943 crore, translating into a stronger growth of 9.0%. Profitability showed a sharp uptick, with consolidated profit after tax for Q3FY26 rising 24.7% year-on-year to `418 crore, while nine-month PAT increased 11.9% to `1,299 crore.

On a standalone basis, United Spirits reported Q3FY26 NSV of `3,683 crore, up 7.3% year-on-year, and nine-month NSV of ` 9,402 crore, reflecting a growth of 9.0%. Growth was driven by the company’s strategic focus on premiumisation, with the Prestige & Above segment recording NSV growth of 8.2% in the quarter and 9.8% over the nine-month period. The performance of the higher-end portfolio helped offset the impact of regulatory and policy-led disruptions in Maharashtra, as well as the lapping of a one-time retail pipeline fill in Andhra Pradesh in the prior-year quarter. The Popular segment, however, declined 4.6% in Q3FY26, largely due to the Maharashtra impact, though it returned to growth over the nine-month period with a 4.7% increase in NSV.

Margin expansion remained a key highlight during the period, supported by favourable mix, pricing actions and productivity initiatives. Standalone gross profit for Q3FY26 grew 12.6% year-on-year, with gross margin expanding by 219 basis points to 46.9%. For the nine months, reported gross margin stood at 46.2%, while underlying gross margin, excluding the one-off tax impact, expanded 179 basis points over the previous year. The company attributed this improvement to sustained revenue growth management interventions, headline pricing flow-through, continuous productivity gains and a relatively stable commodity basket, barring bulk scotch.

Advertising and promotion (A&P) investments remained elevated as United Spirits continued to back its key trademarks. The A&P reinvestment rate stood at 14.0% of net sales in Q3FY26, reflecting higher investments behind the top-end of the portfolio, while the nine-month reinvestment rate moderated to 10.6% on a focused and disciplined allocation strategy. As a result of higher A&P spends during the quarter, standalone EBITDA margin for Q3FY26 came in at 16.8%, contracting 35 basis points year-on-year, even as EBITDA rose 5.1% to `618 crore. For the nine-month period, reported EBITDA grew 9.8% to `1,705 crore, with underlying EBITDA growth accelerating to 12.4% and underlying EBITDA margin expanding to 18.6%.

Profitability at the standalone level remained robust, with Q3FY26 profit after tax rising 11.8% year-on-year to `529 crore, translating into a net profit margin of 14.4%. For the nine months, PAT stood at ` 1,259 crore, up 13.7%, with a net margin of 13.4%. Interest costs for the quarter declined 5.0% year-on-year to `19 crore, while nine-month interest expense was higher at `89 crore due to the one-off tax-related interest component, with underlying interest costs trending lower.

Commenting on the performance, Praveen Someshwar, CEO and Managing Director of United Spirits Ltd., said the company delivered a resilient quarter despite policy headwinds in one of its most salient markets, adding that strong momentum in the rest of India and at the top end of the portfolio positions the business well for sustainable long-term growth. Reflecting confidence in cash flows and balance sheet strength, the Board of Directors also approved an interim dividend of `6.0 per share, underscoring United Spirits’ commitment to shareholder returns even as it continues to invest in brand building and execution capabilities.

Court Allows PLL Holders to Register Labels, Pending Final Order

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  • Government defends ‘Maharashtra Made Liquor’ (MML) policy citing increase in revenue by 17%
  • On December 16, United Spirits Limited applies for new label license – McDowell’s Century Blended Whisky, under MML category
  • 64% of the total liquor manufactured in 2024–25 is from nine potable liquor license (PLL) holders
  • MML necessary to revive struggling domestic license holders, government contention
  • Section 49 of Maharashtra Prohibition Act Invoked, Questions Locus Standi of ISWAI

The Bombay High Court in its hearing on December 23 has allowed all companies to apply and directed the Excise Department to process their application for Maharashtra Made Liquor (MML) license, irrespective of earlier conditions. The Interim direction is subject to the final order.

The Court has posted the next hearing to January 19, 2026.

Justice Revathi Mohite Dere and justice Sandesh Dadasaheb Patil are hearing the case. It must be mentioned here that Justice Dere has been recommended as Chief Justice of Meghalaya starting mid January.

The December 23 directive basically states that all potable liquor licenses (PLL) holders should be allowed to apply for production and sale of MML and the Department must process their applications as if the exclusionary clauses 2 and 3 of the Government Regulations don’t exist (examples being Registered Office should be in Maharashtra; minimum 25% locally resident Directors; no foreign investment etc). 

Department Cites Revenue Increase

On December 16, the Government of Maharashtra, had defended in the Court the MML policy, stating that it had led to a nearly 17 per cent increase in excise revenue. The government informed the Court that it had invoked Section 49 of the Maharashtra Prohibition Act, which gives it ‘exclusive privilege on trade in excisable articles’, thus questioning the locus standi of the International Spirits and Wine Association of India (ISWAI) which has filed the petition challenging the MML policy.

The government made the submission in response to the petition of ISWAI which represents several companies including global giants such as Pernod Ricard, Diageo and Bacardi.

The State Government took shelter under Section 49 of the Maharashtra Prohibition Act to argue that trade in excisable articles remains the exclusive privilege of the government, which may be conferred only upon license-holders for consideration.

While acknowledging that one ISWAI member, Pernod Ricard India, holds two potable liquor licenses (PLL), in Nashik and Kolhapur, the government affidavit said that most other members do not operate manufacturing units in Maharashtra. The State questioned ISWAI’s locus standi to challenge the policy, pointing out that ISWAI does not hold any potable liquor license.

“The State government has not imparted this privilege to ISWAI, it does not hold the right to bring an action against the policy decision on behalf of the alleged members of the association.”

Excise Revenues Surge

The Government representatives also made out a case of how excise revenue had surged post introduction of the policy. The excise collections between July and November 2025 rose from ₹9,665.64 crore in 2024–25 to ₹11,299.40 crore in 2025–26, it mentioned.

This growth contrasts with the average 12% rise recorded between April and June 2025, before duty revisions and the rollout of MML. “This shows positive growth after introduction of new policy,” the government said. The government further argued that the policy was aimed at addressing an uneven competitive landscape, promoting local liquor manufacturers and reviving idle capacities in domestic distilleries.

The government said that about 64% of the total liquor manufactured in 2024–25 came from nine potable liquor license (PLL) holders, many linked to ISWAI members or their subsidiaries. The State argued that these figures justified creation of the MML category and a reserved, incentive-based policy was necessary to revive struggling domestic license holders.

ISWAI had challenged the policy as arbitrary and discriminatory, arguing that it violates Article 14 of the Constitution by creating “a preferential class” of PLL holders who alone may manufacture MML, while excluding similarly placed licensees, including its members.

ISWAI argued that this criteria defeats the purported objectives of employment generation, investment promotion, full-capacity utilisation of distilleries and enhancement of excise revenue. It added that the same policy goals could be achieved by allowing all PLL holders to produce MML rather than reserving lower taxes and a price brand for a narrow class of locally structured licensees.

Even while, the Court is hearing the case, United Spirits Limited with unit in Chikhalthana in Aurangabad taluk has applied under MML category a label by name ‘McDowell’s Century Blended Whisky to be sold exclusively in Maharashtra.

Court Directs Department to Open Portal for Label Registration

On November 24, the Court had allowed the State and other stakeholders to go ahead with preparatory steps for execution of the policy decision, but clarified that the same will be without prejudice to the outcome of the case.

The Court had directed the Government representatives to open the portal for any alcobev player from within the state. However, till December 9, the excise department had not facilitated that process, forcing the Court to take notice of that and cautioning the government.  A two-judge bench headed by Senior Judge Revathi Mohite Dere asked why the excise department had not followed the court directive and cautioned the government that it would take serious notice of the lapse.

Department Holds Right to Accept or Reject Application

Sources in the Excise Department clarified that the portal is open for anyone to file an application for registering their labels, but it is the department’s prerogative to accept or reject the application.

The ISWAI contention has been that the process for companies to get their labels registered is time-consuming, not less than 45 days, and with the court case going on there would be further delay. This, the ISWAI source mentioned would give undue advantage to the eight players who have been granted licenses to set up MML units. They are already marketing MML in the price band of Rs. 160 and Rs. 205 where brand really does not matter to a particular segment of consumers.

MML Category Doing Well

As of now, reports from the ground indicate that the products launched under the MML category are doing ‘extremely well’ with product quality being good. Some of the MML players or the consultants who are guiding them come with enormous experience in the liquor industry, either having worked in major companies or having bottling plants or ethanol units. Some of them also own retail shops across Maharashtra where they can give good shelf position for their products.   

The ISWAI source said that many of the players were ‘commodity players’ and not ‘brand players’ and they would flood the market having a good lead over the established companies. The source acknowledged that the MML players had drafted consultants who have had strong background in the liquor business and are helping the licensees to set up the businesses, thus giving ‘undue advantage’ to them.

In mid-2025, the Maharashtra government introduced policy changes to incentivise local investment. It brought in the MML category, to include grain-based spirits produced exclusively by local manufacturers. The tax rate for MML is 270 per cent with zero foreign investment/ownership. The government believes that this will spur the local industry.

ISWAI then filed a lawsuit against the Maharashtra government, challenging the sharp hike in excise duty on premium affordable liquor brands and also for exclusion of brands of major players such as Diageo India and Pernod Ricard India from the newly-created lower tax category of MML.

The court also asked the government lawyer why the report of the Varsha Nair Committee was not submitted earlier on MML. The report highlights certain salient points to encourage those distilleries which are closed or underutilised in Maharashtra to produce cheap liquor. The report added that this would generate additional revenue to the excise department as well as generate employment provided it is made in Maharashtra for distribution in Maharashtra. It also prescribes certain minimum shareholding pattern for owners.

Eleven Licenses Approved, Several in the Pipeline

So far, the department has approved eleven MML licenses and many more are pending. Companies, both International and nation, are keen on jumping on to this MML bandwagon to produce economy liquor priced between Rs.160 and Rs.205 for the Maharashtra consumers even while their focus is on premium brands. These companies could launch similar products in this price range with some brand extensions and so on. 

The Government is represented by Advocate General Milind Sathe with government pleader Neha Bhide and additional government pleaders Shruti Vyas and GR Raghuwanshi. ISWAI is represented by senior advocate Rohan Shah and advocates Darshan Bora, Chirag Shetty, Anchal Mundada, Kanika Birje, Surabhi Prabhudesai, and Vidhi Shah.

Trilok Desai / R.Chandrakanth

Ambrosia

Section 49 in The Maharashtra Prohibition Act

Exclusive privilege of Government to import, etc., intoxicants, etc., and fees levied include rent or consideration for grant of such privilege to person concerned.

Notwithstanding anything contained in this Act, the State Government shall have the exclusive right or privilege of importing, exporting, transporting, manufacturing, bottling, selling, buying, possessing or using any intoxicant, hemp or toddy, and whenever under this Act or any licence, permit, pass, thereunder any fees are levied and collected for any licence, permit, pass, authorisation or other permission given to any person for any such purpose, such fees shall be deemed to include the rent or consideration for the grant of such right or privilege to that person by or on behalf of the State Government.

Section 49 of Maharashtra Prohibition Act Invoked, Questions Locus Standi of ISWAI

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• Government defends ‘Maharashtra Made Liquor’ (MML) policy citing increase in revenue by 17%

• On December 16, United Spirits Limited applies for new label license – McDowell’s Century Blended Whisky,under MML category

• 64% of the total liquor manufactured in 2024–25 is from nine potable liquor license (PLL) holders

• MML necessary to revive struggling domestic license holders, government contention

The Government of Maharashtra, on December 16, defended in the Bombay High Court its newly introduced Maharashtra Made Liquor (MML)’ policy, stating that it had led to a nearly 17 per cent increase in the excise revenue. The government informed the Court that it had invoked Section 49 of the Maharashtra Prohibition Act, which gives it ‘exclusive privilege on trade in excisable articles’, thus questioning the locus standi of the International Spirits and Wine Association of India (ISWAI) which has filed the petition challenging the MML policy.

The next hearing is on December 23. 

The government made the submission in response to thepetition of ISWAI which represents several companies including global giants such as Pernod Ricard, Diageo and Bacardi. 

The State Government took shelter under Section 49 of the Maharashtra Prohibition Act to argue that trade in excisable articles remains the exclusive privilege of the government, which may be conferred only upon license-holders for consideration.

While acknowledging that one ISWAI member, Pernod Ricard India, holds two potable liquor licenses (PLL), in Nashik and Kolhapur, the government affidavit said that most other members do not operate manufacturing units in Maharashtra.The State questioned ISWAI’s locus standi to challenge the policy, pointing out that ISWAI does not hold any potable liquor license.

“The State government has not imparted this privilege to ISWAI, it does not hold the right to bring an action against the policy decision on behalf of the alleged members of the association.”

Excise Revenues Surge

The Government representatives also made out a case of how excise revenue had surged post introduction of the policy. The excise collections between July and November 2025 rose from ₹9,665.64 crore in 2024–25 to ₹11,299.40 crore in 2025–26, it mentioned.

This growth contrasts with the average 12% rise recorded between April and June 2025, before duty revisions and the rollout of MML. “This shows positive growth after introduction of new policy,” the government said. The government further argued that the policy was aimed at addressing an uneven competitive landscape, promoting local liquor manufacturers and reviving idle capacities in domestic distilleries.

The government said that about 64% of the total liquor manufactured in 2024–25 came from nine potable liquor license (PLL) holders, many linked to ISWAI members or their subsidiaries. The State argued that these figures justified creation of the MML category and a reserved, incentive-based policy was necessary to revive struggling domestic license holders.

ISWAI had challenged the policy as arbitrary and discriminatory, arguing that it violates Article 14 of the Constitution by creating “a preferential class” of PLL holders who alone may manufacture MML, while excluding similarly placed licensees, including its members.

ISWAI argued that this criteria defeats the purported objectives of employment generation, investment promotion, full-capacity utilisation of distilleries and enhancement of excise revenue. It added that the same policy goals could be achieved by allowing all PLL holders to produce MML rather than reserving lower taxes and a price brand for a narrow class of locally structured licensees.

Even while, the Court is hearing the case, United Spirits Limited with unit in Chikhalthana in Aurangabad taluk has applied under MML category a label by name ‘McDowell’s Century Blended Whisky to be sold exclusively in Maharashtra.

Court Directs Department to Open Portal for Label Registration

On November 24, the Court had allowed the State and other stakeholders to go ahead with preparatory steps for execution of the policy decision, but clarified that the same will be without prejudice to the outcome of the case.

The Court had directed the Government representatives to open the portal for any alcobev player from within the state. However, till December 9, the excise department had not facilitated that process, forcing the Court to take notice of that and cautioning the government. A two-judge bench headed by Senior Judge Revathi Mohite Dere asked why the excise department had not followed the court directive and cautioned the government that it would take serious notice of the lapse. 

Department Holds Right to Accept or Reject Application

Sources in the Excise Department clarified that the portal is open for anyone to file an application for registering their labels, but it is the department’s prerogative to accept or reject the application. 

The ISWAI contention has been that the process for companies to get their labels registered is time-consuming, not less than 45 days, and with the court case going on there would be further delay. This, the ISWAI source mentionedwould give undue advantage to the eight players who have been granted licenses to set up MML units. They are already marketing MML in the price band of Rs. 160 and Rs. 205 where brand really does not matter to a particular segment of consumers. 

MML Category Doing Well

As of now, reports from the ground indicate that the products launched under the MML category are doing ‘extremely well’ with product quality being good. Some of the MML players or the consultants who are guiding them come with enormous experience in the liquor industry, either having worked in major companies or having bottling plants or ethanol units. Some of them also own retail shops across Maharashtra where they can give good shelf position for their products. 

The ISWAI source said that many of the players were ‘commodity players’ and not ‘brand players’ and they would flood the market having a good lead over the establishedcompanies. The source acknowledged that the MML players had drafted consultants who have had strong background in the liquor business and are helping the licensees to set up the businesses, thus giving ‘undue advantage’ to them. 

In mid-2025, the Maharashtra government introduced policy changes to incentivise local investment. It brought in the MML category, to include grain-based spirits produced exclusively by local manufacturers. The tax rate for MML is 270 per cent with zero foreign investment/ownership. The government believes that this will spur the local industry.

ISWAI then filed a lawsuit against the Maharashtra government, challenging the sharp hike in excise duty on premium affordable liquor brands and also for exclusion of brands of major players such as Diageo India and Pernod Ricard India from the newly-created lower tax category of MML. 

The court also asked the government lawyer why the report of the Varsha Nair Committee was not submitted earlier on MML. The report highlights certain salient points to encourage those distilleries which are closed or underutilised in Maharashtra to produce cheap liquor. The report added that this would generate additional revenue to the excisedepartment as well as generate employment provided it is made in Maharashtra for distribution in Maharashtra. It also prescribes certain minimum shareholding pattern for owners.

Eleven Licenses Approved, Several in the Pipeline

So far, the department has approved eleven MML licenses and many more are pending. Companies, both International and nation, are keen on jumping on to this MML bandwagon to produce economy liquor priced between Rs.160 and Rs.205 for the Maharashtra consumers even while their focus is on premium brands. These companies could launch similar products in this price range with some brand extensions and so on. 

The Government is represented by Advocate General Milind Sathe with government pleader Neha Bhide and additional government pleaders Shruti Vyas and GR Raghuwanshi.ISWAI is represented by senior advocate Rohan Shah and advocates Darshan Bora, Chirag Shetty, Anchal Mundada, Kanika Birje, Surabhi Prabhudesai, and Vidhi Shah. 

Trilok Desai / R.Chandrakanth

Ambrosia