United Spirits Q2 Results Review

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United Spirits Ltd.’s Q2 FY23 operating performance was better than our expectation due to strong volume growth of 13.6% YoY in the Prestige and Above segment, also leading to strong mix improvement.

The external environment remained challenging in Q2 FY23 due to the ongoing scotch pricing negotiations in select states, route to market change in Delhi and unprecedented levels of input cost inflation.

P&A segment registered 23.1% YoY growth (led by 13.6% YoY volume growth), benefitting from innovation momentum and renovation done in prior quarters while Popular segment (including the InBrew portfolio) registered ~1.6% YoY growth, largely led by volume.

Prestige consumers are not downgrading to lower priced brands, but instead are moving to lower stock keeping units. Events, marriages etc. are back to pre-Covid level and are being organised in a much bigger way.

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