Thank you, Darwin. Hello everyone.

Good afternoon and welcome to United Spirits Limited's first quarter fiscal 2027 earnings call. Before proceeding with today's call, I would like to remind the listeners that during the call, there may be some forward-looking statements.

These statements are based on our views and assumptions at this point of time. However, this is not a guarantee of our future performance, and the results may materially differ from those expressed in or implied by such forward-looking statements.

I request all of you to please refer to our financial and press release posted yesterday. Both are available on stock exchange and company's website under the Investor section.

There was some technical issue because of which press release is still not available on BSE. The teams are in touch with the stock exchange, and we regret the inconvenience caused.

Moving on, today on the call, we have with us Mr. Praveen Someshwar, Managing Director and CEO, who is joined by Mr.

Pradeep Jain, Executive Director and CFO. Praveen and Pradeep will take you through the financial and business performance for the quarter, followed by the Q&A session.

Thank you, and over to you, Praveen.

Thanks, Shweta, and very good afternoon to everyone. Thanks for joining us today.

As always, it's wonderful to speak to all of you. What better way to begin today's call than by calling out this implementation of the UK FTA last week.

It was a historic moment when the agreement was signed a year ago, and it's equally gratifying to see it come into force today. This is an exciting moment for us, and we look forward to executing our playbook and capturing the opportunities ahead.

More importantly, it's a win for our consumers as access to Scotch will improve significantly, and the same will encourage further premiumization. Overall, we as a company remain committed to inclusive premiumization and would focus on growing Scotch penetration and accessibility as the captain of the industry.

There are several other milestones in this quarter that are equally worth celebrating, if not more. Delighted to share that our Royal Challenge trademark has crossed 10 million cases on the trailing 12-month basis.

This is a significant milestone for us, especially because we are the challenger brand in that segment. Taking it from one challenger brand to another, I'm further delighted to share that Signature, our upper prestige trademark, has joined the ₹1,000 crore club on a trailing 12-month basis.

With this milestone, Signature joins McDowell's No.1, Royal Challenge, and Johnnie Walker, taking the total number of our ₹1,000 crore-plus NSV trademarks to four. We remain confident of sustaining the growth momentum on both these trademarks and further reinforcing the virtuous cycle of growth.

Talking of milestones, last but not the least, Smirnoff, a trademark that has almost touched ₹250 crores NSV in Q1 of fiscal 2026-27. To put that into perspective, Smirnoff delivered approximately ₹350 crores NSV in fiscal 2025-26.

Full year ₹350 crores, and think about it, ₹250 crores in Q1 2026-27. This growth underscores the scale and momentum of the brand, driven by our local flavor innovation around Minty Jamun and Mango Mirchi.

The Minty Jamun innovation has effectively created a category of its own, inspiring launches not just in alcobev category, but in adjacent categories as well. Thanks to Smirnoff, the category in India is under a Jamun seizure, as I call it.

Today, you can see Jamun-flavored spirits, Jamun-based cocktails gaining popularity across the market, validating the consumer appeal of this previously untapped flavor opportunity. What is even more encouraging is that the success of this innovation has created a positive halo on the core variant also, contributing further to the trademark's equity.

We assure you that this is just the beginning, and we're working in the background to bring many more such exciting propositions from our innovation hub, The Good Craft Company. Coming to our quarterly performance now, I'm sure you've all looked at our releases, to avoid repetition, I would just touch upon a broader India growth story beyond the now often discussed policy headwind in Maharashtra.

We've closed a strong quarter, delivering solid double-digit growth in our P&A above portfolio. Low teens P&A growth in rest of India offset by the Maharashtra impact.

Allow me to unpack the performance numbers a bit. During the quarter, against the reported P&A volume shrinkage of 1.3%, if you exclude Maharashtra, our P&A volume has grown by 6.4%.

On NSV growth, based on the same construct against the reported P&A growth of 10.1%, eliminating Maharashtra, we have grown 14.8%. It is in this context that we say we've delivered a solid quarter.

Therefore, to conclude the headline performance, we strongly believe that our historically stated double-digit growth construct with 5% to 6% P&A volume growth and 6% to 7% price mix stands, and we are excited about our P&A double-digit growth aspirations. Of course, PJ will provide more color on the other key financial metrics in his comments.

Now turning to key updates on our trademarks. As we speak, McDowell's renovated bundle has been launched in UP, Rajasthan, and Haryana.

The initial response on trials has been encouraging, with consumers appreciating both the quality of the product and the overall bundle. Rajasthan and Haryana were launched just about a couple of weeks back.

Overall, it's very early days to draw any concrete conclusions until we have seen some meaningful data on repeat purchases over the next few months in different markets. We aim to roll out the new bundle to roughly 85% of the salient markets before the festive season kicks in.

Coming to mid-prestige, RC continued to strengthen recruitment and outpace segment category growth, led by the strong performance of the 180 ml pocket pack. During the cricket season, and that is somewhere between March and early June, the brand amplified saliency through a high-impact IPL-led media campaign, delivering significant reach across digital, TV, and print platforms.

This momentum was further reinforced through a nationwide retail activation covering roughly 8,000 outlets across 70% of our salient markets, leveraging cricket and e-sports led consumer engagement. Turning to upper prestige, which is Signature, continues to enjoy strong consumer affinity and brand equity in the upper prestige segment.

The brand strengthened its purpose-led positioning through the Root for Mangroves initiative, engaging over 16,000 consumers across three flagship concerts, while also scaling visibility through the launch of a sustainability-led marquee store in Hyderabad and expanding the Green Escapes program to over 6,000 stores. Black & White launched its new equity campaign, anchored by a powerful FIFA World Cup 2026 association, delivering an average quarterly reach of 78 million consumers.

To drive deeper market penetration, we expanded our out-of-home presence across Tier 2 cities and continued to invest behind visibility. Brand has been performing competitively in the segment, and is now the number one Scotch and international whisky in India by volume.

Also, India is the largest Diageo market for this trademark globally. During the IPL season, Johnnie Walker launched its equity film, generating over significant impressions and reaching more than 150 million consumers.

This was complimented by the exclusive Whisky Experiments events held on World Whisky Day, enhancing consumer engagement and brand affinity. Smirnoff strengthened its cultural relevance through standout activations across with Puma into Superkicks and the Palermo Jamun launch and the Park Street takeover in Calcutta, driving very strong consumer engagement.

Coming to a brief update on RCSPL transaction, the Competition Commission of India, as you must have heard, has approved the transaction with the remaining statutory clearances clearly in process. Let me also briefly touch upon the organizational effectiveness initiatives we undertook this quarter.

While this is an annual exercise, this year's exercise was a little deeper, and therefore more transformative, if I may say so, in impact. Over my last 15 months in the role have seen a clear opportunity to simplify our structure by reducing layers, leverage automation more effectively, and thereby driving greater agility.

The restructuring and the reorganizing we did during the quarter reflects that sentiment and is designed to help us execute faster, operate more efficiently, and strengthen, therefore, our competitive edge. As I bring my remarks to a close, let me touch upon the broader macro and industry dynamics and how we look at navigating those.

We are witnessing healthy demand momentum, particularly at the premium end of the market. At the same time, inflationary pressures, including those arising from the West Asia situation and the AI-driven employment uncertainty, are impacting sentiments and pockets of certain consumer segments.

In this environment, our focus remains on delivering the right value proposition through a well-calibrated price-pack architecture in prestige and above segment. While premiumization remains a powerful long-term trend in India, we remain sensitive to the value-conscious consumer in India and will keep calibrating our offerings across the portfolio with a value-pricing lens.

In a market as diverse as India, it is important to navigate the dichotomy between premiumization and value-seeking behavior. We believe these trends are not mutually exclusive.

Our approach is what we would like to call inclusive premiumization, enabling consumers to access better experiences and trade up within their means through the right pack price offerings. Looking ahead, while the external environment continues to evolve, our strategy remains clear and consistent: a consumer-first mindset, continuously evolving portfolio, and disciplined execution with agility.

With this, I hand over to PJ for a quick update on the financial performance for the quarter. PJ, I know I'm a lot more optimistic, but I'm sure you'll give them a bite of realism also.

Yeah.

Thanks, Praveen, and good afternoon, everyone. Thanks for joining us today on the first quarter of fiscal 2027 earnings call.

Always a delight to connect with this cohort in this forum,

right.

As always, we'll request you to please refer to the financial and press releases posted last evening. It is noteworthy that the consolidated numbers do not include Royal Challengers Sports Private Limited anymore.

This is consequent to the announcement dated March 24th, 2026. It is now being reflected as discontinued operations, subject to BCCI and other regulatory approvals required to complete the transaction.

Prior-year numbers have also been restated accordingly. As Praveen mentioned earlier, we have delivered an overall strong quarter with double-digit P&A growth, and this is after absorbing the adverse Maharashtra impact.

As mentioned last quarter as well, we do not see any sequential deterioration due to Maharashtra, while we still must cycle the base for next couple of quarters. Praveen has also deconstructed the quarter growth construct on the top line, we'll not be repeating that.

Suffice to say that the momentum in rest of India remains strong and building up for the next few quarters. Let me also briefly touch upon the popular segment.

While it continues to be a small part of our business, accounting for less than 10% of revenues, it is important to provide some context for the quarter. The segment faced two policy-related impacts during the period: the continuation of the Maharashtra adverse impact, and the changes in the Karnataka policy that came into play during the quarter.

I would want the audience to appreciate that the Karnataka policy impact overall is very favorable to our prestige and above portfolio, and some part of that tailwind is also nested in the quarter P&A performance. I also want to re-emphasize that the adverse volume impact in Maharashtra mathematically is accretive on the national price mix.

Therefore, the reported overall price mix stands at 9.4% for the quarter and for prestige and above at 11.4%. When we exclude Maharashtra from the equation, overall price mix normalizes to 5.4% and P&A comes down to 8.4%, which is what should be considered for the way forward, especially once we start lapping Maharashtra after a couple of quarters.

On the cost side, as highlighted in the last quarterly call, this quarter absorbed the impact of the West Asia crisis, roughly a range of about 30 ₹30 crores. Impact was across the lines of glass, energy, packaging, and logistics.

ENA has largely been stable. The redeeming thing is that crude has normalized from the north of 100 levels and playing around between 80 and 90.

Having said that, the situation does remain fairly dynamic on that front, right. Therefore, we'll have to wait and watch in terms of when all this will normalize over the next three to four months.

The marketing reinvestment rate during the quarter was at 11.3% of net sales. While this may appear high for the quarter, but would request all of you to see this in the context of a renovation/innovation-heavy calendar and an IPL/FIFA World Cup quarter, which gives our brands an opportunity to build salience and top of mind with the consumer.

In addition, the top end of the portfolio continues to perform well, and that also demands higher A&P, as we have historically stated. Overall would say that A&P investment would remain in the range of 10.5% to 11% for the full fiscal.

As a consequence of all the above, our EBITDA grew 4.1% for the quarter at ₹432 crores, and EBITDA margin was at 16%. Moving on to the other relevant line items, there is a dividend income of ₹150 crores from Royal Challengers Sports Private Limited, which is reflected in the other income.

In addition, you will be able to see an exceptional charge of ₹81 crores for the quarter. Approximately ₹50 crores is on account of the org restructuring measures, which Praveen alluded to earlier, and the large part of the balance pertains to the closure of a unit under the multi-year supply agility program, details of which were shared in our stock exchange disclosures last month.

Reported profit after tax for the quarter was at ₹391 crores, a growth of 51%. All other relevant numbers and information is well contained in our press release.

With this, we can now open the floor for Q&A. Thank you.

Thank you. My first question is to PJ.

I wanted to understand on IPL team sale what approvals have come, what are pending, and what is the expected timeline. Is there any change versus the initial around six, seven months timeline?

Second part of the question to PJ is what happens to the balance 90% stake to Nivola? Is there a game plan to eventually acquire the majority stake in this?

That is my first question.

Abneesh. Very clearly, as you would have seen in the press, the Competition Commission of India approval has already come in, and we are working along with the buying consortium with the BCCI, right.

The BCCI approval is the core approval, and we expect that to come through in the next 60 to 90 days, right. Very much on track for that original six to seven month timeline for closing the transaction, right.

That's one. Your second question was, look, as we've always said, we keep taking these minority strategic positions, right, in new consumer trends that we see emerging and with a set of startup entrepreneurs who we believe are breakthrough, right.

That's the only way to look at it right now, right. Then over the next three, five, seven years, if the businesses become big and scale up, etc., then we can take a position on the balance, right.

That's the response to your second question.

My second and last question is to Praveen. It is on the three South Indian states.

One is on Karnataka, great start for you and the industry. I wanted to understand if government also gets a good benefit because if that happens, other states could see this as a template.

It is a bold, but a great reform. Second quick question on South is in Tamil Nadu, with the new government focus on better honesty and better regulation, would you expect that at some stage great reforms can happen there?

Third quick question on South India, Telangana, there has been new flow on the price hike. Any update on that?

Thank you.

That's very specific. Thanks, Abneesh.

Overall, I think South is doing very strongly. Karnataka, as you rightly said, we've seen very healthy growth, especially with the new policy document.

Yes, I think even whatever little I know about it, I know that it's a win-win proposition. The government is feeling good about how they are mopping up taxes appropriately.

Consumers are feeling good because they're starting to see their premium, exciting brands now a little more rightfully affordable and rightfully priced. We as people who are servicing this are feeling good.

I think it's a win-win proposition. It's too early to say this is exactly the playbook.

I think it's going to play out, and we'll see it over a few quarters, which will give us all comfort that, yes, this is the right. That's what I'd say.

Tamil Nadu, early to say anything. I wouldn't speculate.

Early signs are exciting, but that's a long way ahead. Telangana, I always hope for the best.

Hopefully, industry and the policymakers will work together to do the right things for the industry. We are in a right place.

Overall, South of India is looking good. Yeah.

Thank you. That's all from my side.

Thank you, Abneesh.

Thanks.

Yeah. Hi, Arnab.

Hi. My first question was again on the India-UK trade deal.

Now that the deal has come through, in terms of timelines, how much timeline do you think is there before we see an impact on growth and cost, which are the two elements where you probably have a benefit? Any change in the expectations of how you think the growth acceleration could be or the cost savings could be versus what you had shared last when the deal was initially signed?

Yeah.

Arnab, let me take that. Absolutely, as Praveen mentioned, the treaty is up and running in terms of on-ground reality now, effective few days ago, right, and we have actually also cleared our first shipment at the concessional duty, I did want to provide that comfort.

Now bear in mind that that's a shipment, but obviously there is a lot of inventory in the system already, right: inventory at the corporations, inventory with the distributors, with the wholesalers already duly cleared. We expect that that inventory to be in the range of anything between 60 to 70 days, right.

We believe the real benefit to the consumer and the reflection, right, in our statements will happen sometime around October, early October, right. That's probably.

Numbers are by and large pretty much in the same range, right. Yes, there is absolutely a benefit on our IMFL portfolio on the COGS, etc.

Do bear in mind, as I've always cautioned all of you, right, there are some competing factors also. Look, Forex has depreciated by almost 12%, 13% over the last eight, nine months, etc., right.

There is always a little bit of force inflation that happens, etc., right. Those will kind of neutralize those benefits.

Yes, net-net, it will be beneficial to us, right.

Those neutralization factors, if I may say so, PJ, has got accentuated given the West Asia crisis, and therefore overall, this is what it is. Absolutely.

Got it. Thanks so much for that.

Have I answered or

have I missed some part of your question?

No, I understood. Ceteris paribus, benefits are similar, but obviously the starting point can be different because of the neutralizing factors that have come in now, is what I understood, right?

That's it.

Got it. My second question was actually on the growth acceleration we've seen this quarter ex-MH, Maharashtra.

The acceleration in Smirnoff is very, very impressive, and of course there's a McDowell's relaunch, though it seems very early stages. Would Smirnoff be a major driver here or you've seen across the board a pickup, and any specific reasons because it looks like quite a significant improvement in growth compared to last quarter?

Look, if you look at our portfolio, Arnab, overall, I think we've been consistently seeing growth mid-prestige and above, okay, consistently over the last few quarters. Yes, Smirnoff is picking up, and therefore that's beefing up that growth algorithm, if I may say so.

Okay. What we need to do to get our overall portfolio into play is get our play in McDowell's and the growth in McDowell's.

We've gone in for renovation. The whole bundle is now looking excitingly different and excitingly new, and our consumer initial response has been very exciting.

It will take a few months as it settles into these markets and whole lot of consumer sampling will happen, which hopefully will build on to a virtuous cycle of growth in that space. If we get that act right, I genuinely believe the acceleration will be very, very healthy.

Otherwise, we are very well positioned as we speak to deliver our guidance on a consistent basis.

Got it. Thanks.

That's it from my side. Very helpful.

Thanks, Arnab.

Yeah. Hi, Percy.

Hi, everyone. My first question is on the gross margins going ahead.

We have, as you mentioned earlier, two competing factors, one is the COGS benefits from the UK FTA or any other cost-saving programs that you might be running on packaging material and raw material. On the other hand, we have this inflation in crude, which will affect both glass as well as PET prices.

Under a scenario where crude is sort of remaining at around $95 to $100, do you think that these two competing forces will nullify and you will be able to maintain the gross margins on a YoY basis, or do you think at a $95 to $100 crude, we see a gross margin compression on a YoY basis for FY 2027 as a whole?

Yeah. Percy, look, if you're saying that in the full year crude will be in the $95, $100 range, we're going to be then lapping a crude of $65, $70 in the base, right?

Obviously there will be inflation. Again, our effort will be to get our multiple interventions into play.

There is a little bit of multi-year supply agility program still in the play. Our ongoing continuous productivity is also into play.

We will get everything into play, right, and our premiumization mix into the play to ensure that as an overall blended business, we continue to aspire to grow our profit a little ahead of our revenue growth, right. That's what would be our intent in terms of the overall P&L, right.

Gross margin could move a little bit here and there, depending on exactly some of the factors that you've called out.

Just to press a little bit on this point, can you take me through the math here? See, about 25% to 30% of your sales would be packaging material affected by crude in one way or the other.

At the current crude prices, the inflation in packaging material cost could be anywhere between 30% to 50%. If I do the math, the inflation actually works out, 0.25 into 0.4, to about 10% of your sales, which is a really huge number, and we can't really get this quantum of price increases in one year.

I know that, first of all, we need to assign a probability to this event itself that crude maintains at such a high level throughout the year, which might not be a very large probability. In case that event does pan out, do you think that the margins can be really disastrous in that event?

Percy, we know that's a bit of an alarmist picture that we are thinking on. I don't think we should go on those lines, right.

The numbers are not as high as you are calling out, right. Then if you look at the other big item in our portfolio, which is neutral alcohol spirit, that is fairly stable right now.

In fact, it's been deflationary for the last four quarters, right. Then the FTA benefits, our continuous productivity machinery, etc.

We believe that we should be able to neutralize, right. Now, obviously, if crude remains at $110, $120 throughout, and numbers hit the roof, but then we will have some kind of mitigation plan at that point of time, right, and we will come proactively to you and talk about it, right.

Percy, just to add to what PJ said, that's the power of the portfolio.

That's the power of the portfolio, right. I wouldn't worry too much.

State governments would become more amenable hopefully to provide some pricing, right, though with a lag, as we've always maintained. I wouldn't worry too much on that right now at this point of time.

Got it. Understood.

Second question on understanding gross margins for this quarter. There is a one-off in the base.

If I adjust the base for that one-off, your raw material cost as a percentage of sales is about 54.5%. In this quarter, you mentioned that the cost inflation impact is about ₹30 crores.

If I basically remove that ₹30 crore cost inflation, then your COGS comes to 52.8% in this quarter. On a YoY, there is then an expansion of 170 basis points, and this is attributable to the mix.

Now my question here is that if your overall realization per kilo has gone up by close to 10%, then isn't a 170 bps expansion rather small for such a big realization? Just to make it clear, I'm looking at this 170 basis points after removing all other effects apart from what could be attributable to the mix, and of course there would be any other cost-saving initiatives, etc., which I won't be able to remove.

I've removed the cost inflation impact this quarter, and I've removed the one-off in the base last quarter, and that's how I'm getting 170 basis points expansion.

Yeah. Percy, maybe I'm not following the math, right.

I think the larger point is that as we get the mix benefit, the COGS also goes up, right. As the higher end of the portfolio sells, the COGS is also much higher, right.

Therefore, what you see as a benefit is the net benefit, which is a combination of the entire mix benefit, right. Your overall numbers seem to be correct, right, which is, yes, on an underlying basis, we have expanded gross margin in exactly the range that you've spoken of, right.

I didn't get the rest of the math, and maybe we could take that separately offline.

Understood. That's all from me.

Thank you and all the best.

Thank you.

Thanks, Percy.

Hi, Harit.

Yeah. Hi.

Good evening. Can you hear me?

We can, Harit. A little louder,

Harit. Sure.

Just on the India-UK FTA bit, just another follow-up here. We've spoken about the benefit on the productivity and the margins, as well as on the international portfolio being at, probably at lower price point.

If you could just kind of highlight as to what incremental opportunities from a white space, new product launch, etc. that this event kind of brings upon us, and what is our kind of thought process on that from the next say 6 to 12 months perspective?

What more can we do in this opportunity that has been presented to us? That's my first question.

Sure.

Harit, thanks for the question. Now first, absolutely, I think when I say Scotch will become more accessible with FTA, you will see a whole lot of excitement around it.

It'll take some time to play out, but you will see. We being the industry captains, you'll see us play out over the next few months a few things, and you'll get a feel of how that will improve accessibility of Scotch across to our consumers.

As I would say, wait and watch over the next couple of quarters. This is going to open up new space and new excitement.

Yeah. Too early to call out anything.

Yeah. Equally, I would assume, as we come through this, there'll be a host of other competitors coming into the fray.

My view on this is when you see competitive activity, it unlocks further growth. I think you'll see a virtuous cycle play out, but too early to say.

The next few quarters will be exciting.

The October call will be a good time to discuss some of these things, Harit.

Fantastic. The second question was on brand investments.

If you see the last two years, we've seen continuous step-up, and probably one of the reasons why P&A growths have been strong is that your brand investments have continued to step up. While it may be too early in the year to ask, but is there a kind of range that now we are looking at for brand investments?

Last year was it 10%, 10.5%? We were at the upward end almost of that range.

What should we kind of assume from a full-year basis now, what range are we kind of looking at now, given that all these opportunities exist in terms of investing, as well as the McDowell's No.1 relaunch? Yeah.

Harit, I called that in my opening comments, and I think I've been saying that for the last couple of quarters now. The range should be seen as 10.5% to 11% for the full fiscal year F '27, right.

This is the broad range that we would want to follow, obviously subject to a little bit opportunistic here and there that might, but broadly the range that we'll guide is 10.5% to 11% A&P.

Just a small additional question here was, while you did mention that October is the right time to kind of talk about this, would October be also the right time for you to get a fair assessment of how McDowell's No.1 has landed, given that it'll be done in 85% of the country?

Harit, what I would say is early days even then because some of those markets would have come in September just, but overall it'll give us a good feel of where McDowell's is, and therefore, good time to have a chat around.

No, absolutely. Of the early market launches, we will have a better sense than what we have today, absolutely right.

All right. Those were my questions.

Wish you all the best. Thank you.

Thanks, Harit.

Hi. Thanks for the presentation.

I had one pointed question. I joined a little late, not sure if I missed it, but is there clarity on when the RCB transaction closes and when we could expect the money in our books in United Spirits?

Yeah. Jeetu, as we've always said, we made the announcement in the last week of March, and six to seven months is what we have always said.

Like we again said earlier in the call, the Competition Commission of India approval has already been received. You would have read that in the press.

Right

now we are working with the buyers and the consortium on the approval from BCCI, right. BCCI is taking a little bit of time because, first, they were busy with the tournament, and then two deals have happened, they're going through that diligence process, right.

Yes, we expect it to complete by September, October. Okay.

Thank you very much. Really appreciate that.

Thank you.

Thanks, Jeetu.

Hi. Good evening.

Two questions. Firstly, when you talk about this 10.5% to 11% sort of marketing spend, can I get a sense of where this is getting spent?

Would it be largely sort of digital, or is it a point of sale, or are we seeing any shift in any of these channels? Second, just a follow-up from the one before.

We've got this sort of ₹150 crore dividend from RCB. I'm assuming this will be the last one, right?

Or would we still get some sort of a pro-rated dividend for FY 2027 as well, given that the transaction closes halfway through the year?

Yeah. Aditya, let me take your second question first, right.

We would also want to believe this is the last one, right. Hopefully we will close the transaction successfully, right.

This will pretty much be the last one in terms of dividend, right. That's one.

On your first one, which is, look, obviously, as I've said earlier also, I don't want to give any exact breakdowns, etc., but clearly if you compare the A&P mix of this category versus that of a normal CPG category, I guess digital is slightly higher in quotient versus the traditional TV media, etc. That is one.

A large part of it, right, the point of sale, point of purchase salience is also significantly higher than the rest of the CPG, right. Those would be my two or three callouts.

Praveen, in case you have to add anything to that?

Absolutely. Consistent to that, I think it's a 360 spend to reach the consumers.

You reach out at the point of sale, and that activation I am sure in this category is ahead of other categories. Our overall communication on digital is a little more than what the traditional FMCGs would do in TV, but the mix is pretty much consistent overall.

Understand. Then, for example, when we saw this sort of Black & White activation during the World Cup, this would now largely be classified as digital, or still it's a mix of digital and TV?

It's a mix of digital and TV, you're so right. You happen to see TV, I assume, but it was very much digital also in a big way.

Understand. Very clear.

Thanks a lot.

Thank you.

Thank you. I hope you liked the campaign, Aditya.

Yes, it was good. Thanks.

Thanks.

Hi. Thanks for the opportunity.

Couple of questions. One is if you could elaborate what is the extent of end-consumer price reduction you expect in BIO for your BIO portfolio post-UK FTA implementation, given that rupee has depreciated quite a bit in the last few months?

Besides that, what else gives you confidence that this is a game-changer in terms of driving premiumization if pricing change is not likely to be meaningful? That's first question, and I'll wait for the answer and then ask the next one.

Yeah. Jay, let me take the price reduction on a blended basis, right, on the BIO portfolio would be in the range of 7% to 9%, right.

That is consistent. I don't think that number will change on a national weighted average basis.

Some states it could be a little higher.

Currency depreciation doesn't affect that number, which was the same, even when we Absolutely.

Absolutely. It doesn't at this point of time, right.

Now over a period of time, we'll have to see how it goes, right. Yes, as of now, it doesn't, okay?

What was your second question? I've forgotten that, Jay.

Okay. Is there anything else that your optimism or your tone was quite exciting.

Are you expecting to launch many new products which you couldn't launch for some other reasons earlier, post-UK FTA implementation, and that gives you a lot of confidence?

Jay, what I would say is just wait for some time and you'll see it roll out in the market. Yes, there are opportunities.

There are spaces which we think can be unlocked, and that's what we are all working on in terms of making sure that how do we unlock growth through those spaces in using the FTA, and therefore, primarily in Scotch. You'll see that as we walk over the next few quarters, and that is why I believe the accessibility of Scotch will significantly improve.

Understood. Second question is on MML in Maharashtra.

Now that almost a year is, passed since the change in regulation, what has been the excise collection and impact, if any, on, Maharashtra state's excise collection because of this policy change in terms of quarterly tax run rate for them? Second is how has MML tread over the past few months?

Is there a scale-up that you see of MML on month-on-month? Where do you think it has settled, or where do you expect it to settle in terms of either absolute volumes or percentage share market share in Maharashtra?

Jay, PJ, feel free to add on. MML in Maharashtra, as is sub judice.

We are fighting in the courts around non-permissibility to play in a certain space through the associations. That's one part of it.

The second part of it is how has it impacted the collection, overall excise. I think the overall MML has settled down to a certain stable number on a consistent basis over the last few months.

We're seeing stability, and with that stability, I don't think they're seeing declines anymore, which they saw in the first quarter or the first few quarters. I think it's more or less now, but they're not seeing explosive growth at all, but they're not seeing declines anymore, if I may say so, overall in the category.

Yeah. Go ahead, Praveen.

Why don't you finish?

There was a third No, no. Add build on.

No,

just to build from my side, Jay, look, in the shorter term, as Praveen mentioned, I think the exchequer revenues are reasonable, and they'll probably be feeling pretty happy, right, with the overall MML intervention. As we have seen, these interventions cannot be judged on a one-year basis, right.

What we used to do, we believe, used to sustainably grow the category, right, over an extended period of time, right. I'm not too sure whether the MML players will have that capability, right.

That's the only thing I would call out, and let's see how it pans out.

You'll see that play out. You will see that play out, and that's what they will realize over a period of time, and therefore appropriately take decisions if we don't get anything from the court.

There was a third question, Jay. Sorry.

Sure. Just, if you could give us some sense of what's the market share or absolute volumes of MML in Maharashtra on a monthly basis?

I believe excise department has not uploaded the recent numbers, but I'm assuming you would have good intelligence on where they are.

The last four, five months have been pretty stable. It's been consistent.

If I remember and I'm just talking out of memory, it's a million cases roughly every month is what I see, 800,000 to 850,000 cases what I remember, and it's been stable at that level over the last three, four, five months.

Perfect. Very helpful.

Thank you so much.

Thank you.

Thanks, Jay.

Thank you, Jay.

Hi. Thanks for taking my question.

My first question is on the low prestige segment. McDowell's No.1, you're talking about renovation and maybe potential market share gains after this MML impact is behind us on a pan-India basis.

What do you make of Imperial Blue on ground, the recent acquisition by Tilaknagar? Then we've got Iconic White, not exactly a competitor, but yeah, in the similar segment of low prestige.

What do you make of the competitive intensity in the low prestige segment, and how will that impact your growth rates for McDowell's going ahead?

Look, I think, Karan, the way I would say it is lower prestige and mid-prestige, they first compete with each other, and therefore it's as a category. Manufacturing out, we say lower prestige and mid-prestige, but if you look at the consumer in, they move between low and mid-prestige consistently, and therefore I overall look at that space together.

All of these are very much our competitors, okay. You spoke about IB, you spoke about Iconic, there's the Pernod's offerings in mid-prestige, and our own, which is McDowell's and RC.

I look at that holistically, and start building out on that. Once you look at holistically, that's why we've invested in McDowell's to transform its offerings so that it can get competitive in that space.

Believe after all the consumer tests we've done and early signs we have seen, it's in good place to start building up momentum over the next few quarters. Wait and watch, but I believe we are in a good position.

Right. As far as your other brands are concerned within the portfolio, especially RC, Signature, there has been some market share gains as far as volume is concerned.

What is happening differently over there, and what is the potential for growth because this will try and push you to kind of forecast the overall P&A volume growth in the near to medium term? Because we all know that luxury and Scotch segment growth rates are healthy, but on the RC and Signature brand side, what is the kind of growth that one can expect?

Will they also beat in terms of gain market share from here on?

We've done well over the last few years. There is no reason why that should change.

Some of these are challenger brands, and therefore we have to consistently gain share. Our playbook suggests that it's working, and therefore I wouldn't worry too much about it.

I'd just continue to execute and focus on executing the playbook to build on it. I come back to, that's the power of the portfolio.

If we start adding up each of these parts, sometimes you may come to an obnoxious number, I'd just be careful. As you start building out a portfolio, there'll be years when there'll be explosive growth in a certain space, and in some other years in another space.

We just need to make sure overall portfolio of P&A starts delivering on double digit, right.

Got it. Thank you.

That's it from my side.

Thanks, Karan.

Thank you, Karan.

Hi, sir. My again question is on McDowell's.

It's quite encouraging to see that there is early signs for McDowell's been quite good. Given that McDowell's higher saliency in the overall P&A brand's volume, the success of relaunch, would materially change your guidance of 5% to 6% volume growth over the medium term?

Too early for me to say. I would say in Hindi, "Aapke mooh mein ghee shakkar."

Is that the right thing to say? Yes.

Too early for me to say. As I say, the overall portfolio, I still think 5% to 6% volume and another 5% to 6% to 7% of mix, that's what our guidance is.

We'll see how it builds up over the next few quarters between all the other propositions and McDowell's. It'll give us a lot more confidence on how it is starting to trend and build.

Overall, absolutely. Just to add to what Praveen is saying, you're absolutely right, right.

We played our cards on McDowell's now, and therefore we are confident. We are confident of what we have put in the market, right.

Absolutely, the jury is not yet out, right. The next four to six months will play out on that, right.

Absolutely, it's wait and watch in that space.

Hopefully we'll see the upward revision for the volume growth momentum over let's say two to three quarters down the line. Sir, second question, is there any price hike taken or announced in any of the state to mitigate ongoing inflation?

Not really, if I know prices. Look, with the FTA happening, I would assume that will be some level of muted response on price hikes, but we have seen some price hikes, but it's not significant, if I may say so.

Yeah.

We've had three good years, as I keep saying, right. As I've always consistently said, prices in this category come in peaks and troughs, right.

The peak three-year season has probably played out, right. We just need to brace up for a little bit of moderation on that, right.

As I always also say that we keep making attempts, right. It's not that we don't make attempts, and some of them convert, some of them don't convert, right.

Let's see how that plays out. Got it.

Got it. Sir, last question is on Karnataka state policy.

Now given that the price decline in let's say mid-prestige and upper prestige segment is already been implemented, what kind of volume growth or let's say from when we can see that there would be volume uptick can happen in Karnataka?

You've already seen a little bit of June starting to cycle in. July is certainly powering ahead.

You'll see that consistently. June was Karnataka in full bloom.

May was when the transition happened. June was Karnataka in full bloom.

You'll see the full quarter impact as you go on.

Sure. Thank you, and all the best.

Thanks, Dhiraj.

Hi. Thank you for taking my question.

First question is on Karnataka again, and would appreciate whatever you can share. If you can help us understand the saliency on volume, value, and what is the price changes both on P&A and popular, and the kind of volume that one can expect post these price changes in the portfolio?

That's question number one. Yeah.

I think we've shared it earlier. Karnataka is roughly about 6% to 7% of our national P&A salience in value terms, right.

That's one number. Prices, again broadly, I'm just talking of the anchor brand.

McDowell's used to be probably 235 or 240 for the 180 ml pack. Today it's at 200 or 205, 205, 205, right.

That's broadly. It'll pretty much be exactly in the same range percentages, right, across the portfolio, right.

Popular has gone up, therefore it's a kind of a two-way impact on popular, right. That's why my comments, what I had said in the opening comments, right: popular will get squeezed and prestige and above will benefit, right.

That's broadly the Karnataka impact.

Understood. The price cut is broadly close to what, 10 or 10, 11,

10%

to 15%? Yeah, 10% to 15%.

10% to 15%

across. 10% to 15%.

One can hope for more than 10%, 15% volumes to compensate for that? Or how should one think about that?

Absolutely.

Absolutely. Absolutely.

Absolutely. Absolutely.

Absolutely.

Understood. That's nice.

Secondly, PJ, just if you can, requesting a comment on 2Q gross margins like you gave for 1Q in the previous call. What is the sequential impact that one can expect?

You had earlier highlighted that it could be double of what we see in 1Q, but you will let us know your updated view later on. Just asking on that one.

Yeah.

Look, we don't give quarter-on-quarter, right. Because the war was an exigency, right, so that we felt it appropriate to prompt.

Reality is that the impact is not a full-quarter impact what we experienced in April-June, because we had some forward covers, right. Sequentially, it's more or less in the same range, I would say, right.

I don't see anything dramatically improving, right, and then we have to wait out for the factors to play out, right. That's the way I will look at the current quarter.

Understood.

Understood. Lastly, I think after 2Q, I know quarter-on-quarter is a bit difficult, but just understanding and appreciating the impacts after 2Q, the realization gains that we see in Maharashtra can fade away, but from Karnataka side, there will be some kicker that will come in.

Wanted to understand if they net off each other, and how should one think what happens in the second half? If I can just throw in the hat of UK FTA benefits also.

Because of all these changing mixes, will appreciate if you can highlight how should one think about the volumes and realizations in the second half of the year? Yeah.

I can talk about volume definitely. I think we said that in the last quarter also.

Second half will definitely be higher than the first half, right, because Maharashtra will fall off and the tailwinds of Karnataka, etc. will continue, right.

Maybe we should just leave it at that, right. Yes, second half will definitely be better than first half.

Praveen, in case you have a build on that?

Thank you. Thanks,

Mihir.

Thank you.

Hi, sir. Thanks for the opportunity.

A lot of comments have been made on whisky segment as it's the largest segment within the largest category within IMFL. You have been doing well in case of Smirnoff.

Smirnoff being in the upper prestige and slightly luxury segment, is there any thought process behind the mid-prestige vodka or gin? When someone travels to geographies like Goa, I understand that those are the higher-priced gins and all, but you being the largest in the industry, you could be a pioneer and introduce vodkas of the world or gins of the world in the lower prestige and the mid-prestige segment.

Mid-prestige is something which is a very sweet place where your competitor has done really well. Now Smirnoff has really rejuvenated and done well.

Any thoughts on that? Any efforts on that?

Because everyone is focusing on lower prestige and mid-prestige whisky, and you have really done a great job in mid-prestige and upper prestige, which was lagging for a very long time. I believe you would do very well in McDowell's, but any thoughts on the white spirit market in the Abhijit,

thanks for your question.

Yeah. Just one question.

Any thoughts on working on the white spirits in the lower prestige and the mid-prestige segment in

Abhijeet, thanks for the question, exciting thought. Look, first, consumers don't think low, mid, and upper prestige.

Consumers think in terms of occasions, and therefore what are the offerings. The lower, mid, and upper prestige is a manufacturing out point of view.

I just anchor that thought importantly. We will look at working at propositions for our consumers which solves and delights them in various occasions, okay.

Now what we have realized as we have done Smirnoff and the work around Smirnoff, and as Jamun and Mango have played out, that they have upgraded a whole set of consumers who were, as you said, lower prestige or at the popular space to come and experiment on those occasions, and they have enjoyed it and stayed with it. That's an important thing to think about.

Think consumer out, and not think manufacturing out. Having said that, what you are saying is in our ladder in white, is there an opportunity to play at the lower end?

That is an exciting space. The whole idea of doing work around House of McDowell's was to start exploring that space.

We're going to build on that space as we go on. We already have something, but we'll certainly build on that.

Absolutely, we'll think about it in terms of how do we solve for consumer occasions and build that out.

Yeah. Maybe, Praveen, just to add to that, the acquisition of NAO Spirits was also towards exactly that intent, right?

That whole laddering bit.

The whole laddering, right, of the white portfolio, absolutely.

We are always looking at these opportunities. Does that answer your question, Abhijeet?

Yeah.

It was because your competitor in the mid-prestige segment of vodka, they did really well. That was a history behind the question, that's it.

Absolutely. Completely agree and really appreciate what they have done.

I think what Smirnoff has shown is we just need to anchor to what our solutions for consumer occasions is, and therefore we will see how it plays out.

Thank you, Darwin. Thanks, everyone, for joining in.

Quick note before we close the call, our fiscal year 2025-26 integrated annual report is now out. As always, look forward to your feedback.

Please feel free to reach out to me should you have any further questions on the results or if you need further clarifications. Thank you.

Have a good evening.

Thank you. Thank you all.

Thank you, everyone.