Street expectations continue to favour Radico, with analysts pencilling in further outperformance. However, United Spirits remains a stock to watch, with shifting consumer demographics and a clear tilt towards Prestige & Above (P&A) brands setting the stage for a potential upside for the stock.
The Indian alco-beverage market is divided into four segments by price: popular, prestige, premium, and luxury.
Popular brands are priced up to ₹400 per 750 ml. The prestige segment ranges from ₹400 to ₹1,000, while premium spirits are priced above ₹1,000. Luxury spirits cost more than ₹2,000 per 750 ml.
Radico Khaitan had a standout October-December quarter (Q3 FY26), clocking its highest-ever quarterly volumes of 9.75 million cases, with Prestige & Above volumes almost tripling since Q3 FY19 to 4.62 million cases. In contrast, United Spirits saw a softer quarter, with standalone volumes falling 3.2% year-on-year to 17.57 million cases. Its key P&A segment slipped 2% to 14.62 million cases during the quarter.
Radico Khaitan’s outperformance stems from stronger sales growth than larger peers and more effective execution of its premiumisation strategy, said Mehul Desai, FMCG research analyst at JM Financial Institutional Securities. In contrast, United Spirits is likely to see relatively slower growth due to the sharp excise duty hike and the introduction of a new liquor category Maharashtra Made Liquor (MML) produced and sold within the western Indian state.
A steep duty hike in mid-2025 pushed Indian Made Foreign Liquor (IMFL) prices up by 30–50%, forcing companies to raise prices by 30–35% and sparking concerns about weaker volumes and consumers shifting to cheaper options. At the same time, the launch of the lower-priced MML category has prompted industry pushback and legal challenges over fair competition, with companies facing potential revenue hits even as the state aims to boost collections.
Desai believes Radico’s outperformance is likely to continue over the medium term, while United Spirits will also be closely watched, with potential for a rerating depending on how sales growth plays out for both companies.
Shares of Radico Khaitan ended about 5.4% higher at ₹2,986.50 apiece on the BSE on Thursday, while United Spirits rose 1.5% to close at ₹1,338.95.
Analyst take
Some analysts believe that steady performance across the rest of India, coupled with strong growth at the premium end of the portfolio, should drive healthy value growth for United Spirits. That said, better traction for MML in Maharashtra, driven by attractive pricing, is expected to support overall growth, with the ongoing wedding season providing an added boost, they said.
According to Bloomberg, Radico has 21 ‘buy’ calls, two ‘hold’ ratings and one ‘sell’. United Spirits has 23 ‘buy’ recommendations out of 30 brokerages, with three ‘hold’ and four ‘sell’ calls, data showed.
Radico Khaitan’s momentum showed up clearly in its numbers, with revenue from operations surging 19.5% year-on-year to an all-time high of ₹1,546.7 crore during the October-December quarter. United Spirits also stayed in the black, but growth was steadier, with standalone net sales rising 7.3% to ₹3,683 crore.
“The underperformance (of United Spirits) compared with peers was mainly on account of higher exposure to Maharashtra, which faced adverse policy changes,” ICICI Securities noted in its 21 January report. It said that during the quarter, weakness in regular and entry-level P&A brands was partly offset by strong growth in the premium portfolio, leading to a 10% year-on-year rise in realisations and a 219 basis-point expansion in gross margin.
One basis point is one-hundredth of a percentage point, or 0.01%.
ICICI Securities, which has maintained its ‘add’ rating on the stock, believes United Spirits’ strong portfolio could help it navigate the near-term challenges.
Ajay Thakur, research analyst at Anand Rathi Institutional Equities, sees Radico Khaitan delivering a solid 30-35% earnings growth for FY27, comfortably outpacing the near-15% growth he expects from United Spirits over the same period.
For United Spirits, the key catalyst remains the UK-India FTA, he highlighted. Once implemented, better Scotch pricing could start lifting revenues and margins from Q2FY27. Until then, Thakur believes the company could continue to face some near-term pressure, though the valuation gap between the two players should gradually narrow.
“At the heart of it all is premiumization,” he said, adding, “The more premium the portfolio, the stronger the pricing power”.
Radico already draws about 65-70% of its portfolio from Prestige & Above (P&A) brands, while United Spirits is even further ahead, with nearly 90% of its portfolio in the P&A segment, Thakur noted.
“…India-UK FTA could provide a mid -term growth tailwind, including ~60bps gross margin uplift,” said Elara Capital in its 21 January report. Factoring in Q3, the brokerage has retained its revenue estimates but raised earnings per share estimates by about 1-2%.
Post the Q3 results, Elara Capital has even upgraded its rating on United Spirits’ stock to ‘accumulate’ from ‘reduce’, given improving risk reward, and has hiked its target price to ₹1,500. The brokerage has flagged the Delhi policy and the IPL outcome as key external triggers.
Mirae Asset Sharekhan met Radico Khaitan’s vice-president-finance & investor relations, Saket Somani, to discuss demand and margin outlook. Later, the brokerage noted in a 23 December report that Radico has delivered sustained double-digit volume growth in the P&A segment, a trend it expects to continue, driven by strong premium brand traction, new launches and wider geographic expansion.
It added that multiple launches in FY25 and 4-6 new products rolled out so far in FY26 are scaling up well, with the company planning to expand these offerings across more states and geographies during the year.
