Target: ₹1,330CMP: ₹1,468.20Q1-FY27 volumes remained under pressure, declining 3.4% YoY, primarily due to the continued impact of Maharashtra Made Liquor (MML) on the Popular and Lower Prestige segments. Karnataka (6–7 per cent of P&A net revenue) is expected to show volume expansion in the next few quarters as prices were reduced by an average of 15%. Although premiumisation remains intact with Prestige and Above (P&A) revenues growing 10.1 per cent YOY despite a 1.3 per cent volume decline, margin recovery is forecast to remain gradual driven by elevated glass and PET packaging cost offset benefits.We now factor in a volume CAGR of 4.4 per cent (vs.5 per cent earlier) over FY26–FY29E, while improved realisation driven by premiumisation support a revenue CAGR of 11.0% over the same period. We expect EBITDA margin to remain broadly stable in FY27E before improving gradually as Supply Agility Program benefits accrue.Although United Spirit’s supply agility program, India-UK FTA implementation and price reduction in Karnataka offer growth levers, we expect headwinds from increased competition intensity, elevated packaging cost and adverse MML policy to subdue growth in the medium-term. We have raised our TP to ₹1,330 (vs.₹1,230) using DCF, factoring in fresh drivers. We cut our FY28E net income estimate by about 3 per cent and maintain our Reduce rating on the stock.Published on July 24, 2026