Near-term headwinds could reverse United Spirits growth trajectory

Margin expansion, debt reduction and higher premium segment sales may offer some support to the stock

After four quarters of contraction, United Spirits returned to a positive sales growth trajectory with an uptick of 12 per cent y-o-y in the March quarter. Adjusted for bulk scotch sales, comparable sales growth came in higher at 16 per cent. This coupled with expanding margins and debt repayment were other key takeaways in the quarter.

As has been the case in recent quarters, the Prestige and Above (P&A) segment was the key growth driver rising 26 per cent led by higher demand for scotch and a lower base. While overall volumes were up 8 per cent led by higher