Synopsis:- Shares remained in focus after a ₹16,600 crore IPL franchise sale, valued at ~17% of market cap. The deal could yield ₹195–200 per share post-tax, with potential payouts up to ₹199. Backed by an overweight rating and ₹1,565 target, sentiment hinges on capital allocation and execution.
The shares of the prominent alcoholic beverages company are in focus after the board of directors of United Spirits Limited approved the sale of equity shares of Royal Challengers Sports Private Limited for Rs 16,600 crore.
With a market capitalization of Rs 95,490.26 crore, the shares of United Spirits Ltd were trading at Rs 1,312.85 per share, decreasing around 1.11 percent as compared to the previous closing price of Rs 1,327.60 apiece.
Sale Of RCB
According to the filing, United Spirits’ sale of RCB for Rs 16,600 crore appears well-priced, aligning with analyst expectations of $1.5–2 billion. Notably, the franchise alone accounts for ~17% of the company’s Rs 96,563 crore market cap, highlighting its strategic value. Moreover, strong financials, FY25 EBITDA of Rs 186 crore, and H1FY26 already surpassing that, underscore robust growth momentum and rising commercial appeal.
Furthermore, investor focus will shift to net proceeds post-tax and capital allocation decisions. If fully distributed, shareholders could receive Rs 199 per share, while a 50% payout implies Rs 98 per share. Hence, dividend clarity will act as a key catalyst. Additionally, management’s reinvestment strategy versus payout balance will influence long-term valuation and investor sentiment.
Brokrage Recommendation
JPMorgan maintains an overweight rating on United Spirits with a target price of Rs1,565, viewing the RCB divestment as value accretive. The Rs166.6 billion deal implies Rs 230 per share, with post-tax proceeds of Rs195–200, exceeding estimates. Moreover, the move sharpens focus on the core alcohol business, while potential payouts and execution remain key triggers.
The company delivered a strong Q3FY26 performance, with revenue rising 8% from Rs 3,433 crore to Rs 3,694 crore, indicating steady growth. Notably, net profit surged 25% from Rs 335 crore to Rs 418 crore, reflecting improved margins and operational efficiency. Overall, earnings growth outpaced revenue, signaling strengthening profitability momentum.
Over the past year, United Spirits’ operating performance has remained relatively stable with slight fluctuations. Operating profit rose from ₹565 crore in Dec 2024 to ₹599 crore in Dec 2025, indicating modest growth. However, OPM remained largely flat at around 16%, reflecting stable margins but limited expansion despite improved operating profit.
United Spirits Ltd is one of India’s leading alcoholic beverage companies, engaged in the manufacturing, distribution, and sale of spirits across premium and mass segments. Backed by global parent Diageo, the company has a strong brand portfolio and nationwide presence, focusing on premiumization, innovation, and sustainable long-term growth.
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