United Spirits Limited (USL) witnessed a strong rally in today’s trading session, surging over 3.5% to cross the ₹1600 mark. The stock emerged as one of the top gainers in the futures and options (F&O) segment, backed by renewed investor interest following a bullish report from global brokerage firm JP Morgan. The report, titled "In All Good Spirits," highlighted several positive triggers that are likely to drive the company’s performance in the coming years, particularly in FY26 and FY27.
JP Morgan expects a 3% expansion in EBITDA for FY26, along with an EBITDA margin improvement of around 50 basis points. For FY27, the brokerage has projected a further 7% jump in EBITDA, signaling a strong operational outlook for the liquor giant. A key factor behind this optimism is United Spirits' ongoing focus on premiumization across its product portfolio. The shift towards higher-value and premium brands is contributing significantly to revenue growth and margin expansion.
Another major trigger for the stock's upward movement is the series of regulatory improvements across several Indian states. In Andhra Pradesh, the reopening of retail liquor outlets is expected to boost sales. Uttar Pradesh has seen the number of alcohol retail outlets double, expanding the company’s market access. Similarly, in Madhya Pradesh, the excise duty structure has become more favorable, and in Jharkhand, the privatization of the retail segment is enabling better efficiency by reducing state control. These changes are making it easier for United Spirits to operate and grow in previously restrictive markets.
Adding to the positive sentiment is a recent revision in UK import duties. The duty rates have been cut by up to 75%, which is expected to reduce input costs for certain imported product categories. This could enable the company to lower its prices, passing on the benefits to consumers and boosting volume growth. As a result, JP Morgan foresees strong double-digit growth in revenue for the company.
In light of these developments, JP Morgan has increased its target price for United Spirits to ₹1760 and maintained an Overweight rating. The positive sentiment is also spilling over into the broader liquor sector, with other companies like Radico Khaitan also showing strength in the market.
Overall, United Spirits appears to be in a strong position, benefiting from both internal strategic moves and favorable external conditions. The focus on premiumization, coupled with regulatory tailwinds and cost advantages from global policy changes, is expected to drive sustained growth in the coming quarters. With investor confidence riding high, the company’s future looks promising.
Disclaimer:
This article is for informational purposes only and does not constitute financial advice. Please conduct your own research or consult a financial advisor before making any investment decisions.
