Net Sales Value (NSV) contribution from the luxury & premium segment surpassed one-third in FY25, reinforcing the company’s leadership position in premium spirits.
The recently announced Free Trade Agreement between the UK and India is expected to reduce tariffs across several industries, with whisky being a key beneficiary. Given that India is the world’s largest whisky market and Diageo India holds a strong position with a broad portfolio of brands, the agreement is likely to enhance scotch whisky accessibility and support growth in the alco-bev and hospitality sectors.
In FY25, the company expanded and diversified its portfolio with Royal Challenge American Pride and JW Blonde each contributing 7% to their respective trademarks by NSV, McDowell’s X Series entering multiple new spirit categories, Smirnoff launching Indian-inspired flavors, and a focus on the fast-growing white spirits segment (16% 3-year CAGR) across price points to capture the evolving consumer demand.
In line with the ‘Made in India’ strategy, the company made strategic minority investments in select craft and innovative ventures. These include Inspired Hospitality, which owns Maya Pistola, an Indian agave spirit; V9 Beverages, the maker of Sober, a non-alcoholic spirit; and Indie Brews & Spirits, known for Quaffine, a coffee liqueur.
We continue to value UNSP at 55x Jun-27E standalone EPS (5-year average ~53x, 10-year average ~65x) and attribute Rs170 per share value to its 100% stake in RCB giving us a target price of Rs1,665, ~28% upside to the CMP.
