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UNITDSPR: Future Franchise Review Will Support Stronger Core Profitability

Rising Incomes And Urbanization Will Drive Premium Alcohol Growth

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UNITDSPR
AnalystHighTarget
Not Invested
Published 06 Jul 2025

Update shared on 16 Dec 2025

Fair value Decreased 1.33%
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AnalystHighTarget's Fair Value
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1Y
-9.8%
7D
-0.8%

Analysts have slightly reduced their price target on United Spirits from Rs 1,885 to Rs 1,860, as a modest uptick in the implied discount rate offsets improved assumptions for revenue growth, profit margins, and a lower future P E multiple.

What's in the News

  • United Spirits has initiated a strategic review of its wholly owned subsidiary Royal Challengers Sports Private Limited, which owns the Royal Challengers Bengaluru cricket franchise. The process is expected to conclude by March 31, 2026 (company exchange filing).
  • The strategic review of the RCB franchise could potentially result in a sale of the cricket business, which is considered non core to United Spirits’ alcohol beverages operations (company exchange filing).
  • Reports indicate that Adar Poonawalla is exploring a potential acquisition of the Royal Challengers Bengaluru franchise at a valuation of up to USD 1.2 billion, valuing the team at more than 20 times its revenue (Mint, CNBC TV 18).
  • United Spirits has scheduled a special or extraordinary shareholders meeting on December 20, 2025, to be conducted via postal ballot in India (company notice).
  • Existing statutory auditors Price Waterhouse & Co. Chartered Accountants LLP will complete their second five year term at the conclusion of the company’s 27th annual general meeting (company announcement).

Valuation Changes

  • Consensus analyst price target has been trimmed slightly from ₹1,885 to ₹1,860, reflecting a marginally lower fair value estimate.
  • The discount rate has inched up modestly from 12.73 percent to 12.76 percent, implying a slightly higher perceived risk or required return.
  • Revenue growth has risen slightly from 13.70 percent to 14.02 percent, indicating a marginally more optimistic growth outlook.
  • Net profit margin has increased meaningfully from 13.71 percent to 15.57 percent, reflecting stronger expected profitability.
  • Future P/E has been reduced significantly from 78.7x to 65.1x, pointing to a more conservative valuation multiple applied to future earnings.

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