Q2 FY26: Diageo India's premium brands drive growth despite regulatory headwinds

United Spirits Ltd., the Indian subsidiary of Diageo Plc and one of the country’s leading beverage alcohol companies, reported robust second-quarter results for fiscal year 2026, with double-digit sales and profit growth driven by its premium portfolio, even as it navigated policy challenges in Maharashtra.

The company’s consolidated net sales value rose 11.6 percent year-over-year to ₹3,173 crore for the quarter ended September 30, 2025, led by strong momentum in its Prestige & Above segment, which accounted for nearly 90 percent of total sales. Consolidated EBITDA surged 31.5 percent to ₹660 crore, while profit after tax grew 36.1 percent to ₹464 crore.

On a standalone basis, United Spirits posted net sales of ₹3,170 crore, up 11.5 percent from a year earlier, with Prestige & Above brands — including Johnnie Walker, Signature, and Antiquity — growing 12.4 percent. The Popular segment also advanced 9.2 percent. The company’s reported EBITDA climbed 32.5 percent to ₹672 crore, lifting margins to 21.2 percent, an expansion of 337 basis points from the same quarter last year. Net profit rose 40.9 percent to ₹472 crore.

CEO and Managing Director Praveen Someshwar said the company “delivered a strong quarter on topline and EBITDA growth,” noting that the first half of the year ended in line with expectations despite “regulatory headwinds in the state of Maharashtra.” He added that the upcoming festive and wedding season would be key for driving further growth across the company’s brands.

For the first half of FY26, consolidated net sales grew 10.5 percent to ₹6,194 crore, while profit after tax rose 6.7 percent to ₹881 crore. Underlying EBITDA, excluding a one-off indirect tax impact of ₹40 crore, increased 10.6 percent to ₹1,344 crore. The company’s sports business, housed under Royal Challengers Sports Pvt. Ltd., posted a 15.8 percent increase in revenue.

Margins improved across the board, supported by pricing, product mix, and stable input costs. Gross margin expanded 190 basis points to 47.1 percent in the second quarter. Marketing reinvestment remained consistent at 7.6 percent of net sales, reflecting continued spending behind key trademarks.

The company highlighted strong gains in its premiumization strategy, with Prestige & Above brands contributing 89.6 percent of sales in Q2 and 89.0 percent in the first half of FY26, up from the prior year. United Spirits also benefited from the re-entry into Andhra Pradesh and from its innovation and renovation programs.

Despite a challenging regulatory environment, Diageo India’s results underscored the continued strength of its brand portfolio and operational discipline. With the festive season underway, the company signaled confidence in sustaining momentum through targeted marketing and portfolio investments.