United Spirits Limited analyst Q&A

Thank you very much. We'll now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and 1 to ask a question. The first question is from the line of Abneesh Roy from Nuvama. Please go ahead.

Yes, thanks. I have 3 quick questions. First is on your comments on Maharashtra. So, you did mention that the MML kind of strategy, Maharashtra Made Liquor, those equivalents have been tried earlier in other states. So, if you could clarify a bit more on generally near term and long term, how does it pan out? Because we don't see that as a concern in most states. So, it does mean that initially maybe it's introduced and then does get sidelined. So, if you could clarify on that. Second related question is, you did mention that you are absorbing substantially in some cases. So, I wanted to understand the 30% to 40% tax hike. The absorption is sporadic, or it is a bit more substantial? So that is my first question.

So, I'll start with the first question and your whole question on which other state they did introduce state-made liquor. I'm told Rajasthan had it some years back. Much before that, UP experimented with it. And in both cases, they realized over a period of t ime that it didn't make any substantial impact, and it just impacted the taxes and duties, and they completely changed it over the next few years in their yearly policy updates. So too early to say what will happen in Maharashtra and how it will work out. But clearly, it shows in the past that it didn't work. On absorbing some -- not passing on the complete pricing. Look, I don't think there was a one - size-fit-all. It was different brands priced differently, and it was nicely laddered. In the upper -- if you see the middle Prestige level, we have absorbed signi ficant sums of money. At lower Prestige, we've been marginal absorption and not -- that's not very big absorption in terms of absolute duties. At Popular, at below lower Prestige, we've passed on everything because that's what -- there was a minimum price requirement also, and therefore, we had to pass on. So, it's been done differently across brands and across categories. But that's how we have done it, and that's -- we've carefully created it so that the laddering continues in the category and the consumers in some manner are softened.

Yes. And maybe I'll just add, Abneesh, to Praveen's points, right, that whatever we have consciously decided not to pass on, we are tasking ourselves to generate that productivity. A significant portion of it from the Maharashtra state itself. But where we are not being able to absorb that completely in Maharashtra, we are obviously tasking ourselves to generate that from the rest of the portfolio.

Understood. One quick follow-up on this first question. So, given your focus on premiumization, would you look to play the MML once full policy clarity comes? And second, a small bit on the pass on to customer. Is the -- are the other large players also behaving fairly similar because it's an industry-wide issue. So is there some irrational competition here that some small player or big player is trying to become extra aggressive, or you are trying to become extra aggressive. I wanted to understand, is there some level of discipline here on the thought process?

We've seen a very balanced approach. I wouldn't see aggression from anyone till now. It's early days. It's just been 30 days effectively, it's gone to market, but we've seen a balance in the play. So that's not really a concern. On -- MML rules have just come out. We're all studying. What I'm told early read of it is we cannot participate. So, there's -- it's not about we can -- we want to or can't, we cannot participate, but we will go through it in great detail and see what the opportunity is. And if there is an opportunity to participate, then that does it play in our overall segment and how do we structure it.

Sir, my second and last question is on the 3 cost items. So first, of course, on the glass, you mentioned interesting and very useful comment that some planned maintenance is going to happen. Generally, planned maintenance is well thought through. So, do you see this as a substantial impact or more of just a small and temporary impact on your costing on the glass? And second is, Q1, your other costs and A&P costs rose sharply. On a full year basis, given, sir, you have now taken up the leadership as the MD, is there some thought that on a full year basis also these 2 line items should go up a bit versus last year, as a percentage of sales?

Yes. So Abneesh, let me take that, right? And Praveen is smiling, right? So, he's passed it on to me. So no, for glass, there are -- you're right, there are these planned furnaces, et cetera. So, there is a little bit of cross regional sourcing that happens, et cetera, which leads to a little bit of an uptick of freight cost, et cetera, but otherwise, nothing structural. It will be temporary, exactly the way you have said, right? And the second thing is, I've already -- we've already covered that in our opening script. We don't expect the A&P investment to go up versus our full year guidance, right? So, this is more a quarter-on-quarter phasing issue, right, and therefore, not a full year impact.

Even other costs, other cost has also risen sharply?

Other costs, okay, this is -- other costs, well, all I can attribute that it is due to a bunching up of some of our old cases and legal issues, et cetera, right? But again, nothing structural, right? So that, again, should be seen as a one quarter issue.

So, thanks, all the best from my side. Thank you.

Thank you.

Thank you. Next question is from the line of Avi Mehta from Macquarie Capital. Please go ahead.

Yeah. Hi, team. Thanks for the opportunity. My first question was more on how to look at Maharashtra from a company level basis. Now given the salience of Maharashtra and your initial read on how demand behavior is, do you see that FY’26 Prestige growth may be lower than the double-digit growth that we typically aim for?

In Maharashtra or across the country?

I'm more interested because typically, India has some pluses, some minuses, so I just wanted to get more overall feel? And how should I look at that?

Thanks. I think I made that point very clear in the opening statement itself. In balance, I think we are cautiously optimistic. Our mid-range, midterm guidance is very simple, which is double- digit growth in P&A. I think we are completely committed towards it. And we don't see any of this changing it in the short term at all.

Yes. Also, maybe Avi, I'll just add to what Praveen is saying, right? There have been and you've been associated with the company for the past, right, I mean you've seen Delhi happen. We lost about 6 to 7 points of growth. We were immediately able to reallocate resources and punch our weight in other geographies, et cetera. So that's what Praveen is saying. That will be our aspiration, right? We also have to wait for the peak season, right? I mean, once October, November, December kind of go through the season, et cetera, then we will be in a better shape, right? But as of now, we are not diluting our aspirations for Prestige & Above double digits.

Very clear, very clear. Thanks a lot. That's clear. The other bit is, yes, if that is the case, and even though you're looking to use productivity to offset some of the tax hikes in the year, would it be fair to say you remain confident of EBIT growth being higher than sales growth?

It will moderate, as I've always mentioned, right? I mean, if you see that we've been fairly ahead of what we have committed over the last 2 to 3 years. And as one had mentioned last time, it is going to moderate now, right? But like any forward -looking organization, we always try and extract the EBIT growth a little ahead of our revenue growth, right? So that's a fair expectation. Keep us honest on that, and that's what we strive for.

And last, with your permission, just a clarification and bookkeeping. Could you just explain what this indirect tax actually about? And why -- how is it -- and what is this related to? That's all from my side.

Yes. So, Avi, first of all, I just want to dimensionalize the amount, right? While the INR40 crores number looks large for a single quarter, it's almost a 5 -year catch -up, right? And that's our ongoing risk assessment of our plethora of our dispute resolution book is large, as you are aware, because of legacy issues, right? So, we keep assessing that depending on developments. On this one, we felt that it is better to kind of cover ourselves for us based on some trigger events that have happened, right? There is a much more detailed disclosure on the issue in our annual report. You will get a better sense. So broadly, what I'm saying is the annualized number will be in the range of about INR6 crores to INR8 crores. On that also, we are driving productivity interventions. Our intent will be to ideally completely neutralize, but there might be some spillover cost that comes into our algorithm.

Sorry, Pradeep, this INR6 crores to INR8 crores, this quarter, it was INR5.7 crores. So, you are including the interest or you're talking just about the RM? I just wanted to clarify that because you saw an interest impact also, right.

Yes, so I'm keeping the interest cost of INR32 crores aside, right? I'm just talking about the INR40 crores that is into the operating results, right? So that's what I'm saying, the annualized number will be about INR6 crores to INR8 crores on an annualized basis. It's a 5-year catch-up, right? And therefore, it's not very material, and we are driving interventions to kind of neutralize that number also.

Thank you very much. That's all from me. Thanks a lot. Thank you.

Thank you. Avi.

Hi sir, because of the change of Maharashtra excise duty, was there any kind of sort of early buying by the trade, which sort of you would like to call out in terms of benefit on the volume growth?

Actually, not at all. We didn't get -- we actually cleaned our pipeline because we were very, very clear that we will move into it. At that point of time, there was not enough clarity on various things. So, we didn't clog the pipeline.

And Percy, all within the quarter, right? So, all within the quarter, right? So even if there was any trade would have taken something, it's all within the quarter, right? So, we are not carrying forward anything.

Understood. Understood. Also wanted to understand the gross margin expansion, 100 basis points Y-o-Y, especially in light of the fact that your price plus mix in the P&A segment is zero this quarter. So generally, we see -- generally, we struggle to even deliver 100 basis points even with a pricing plus mix. And this time, that lever is completely zero. So, can you throw some light on this?

Yes. Commodities have been kind this quarter, Percy, right? I mean neutral alcohol spirit was kind and even glass, right, because we're migrating to PET. So mostly, the entire commodity portfolio was kind, right? But like I said in my opening script, neutral alcohol spirit structurally remains inflationary, as you are aware, right, because of ethanol blending, the policy has been updated for 2 years. So that will come in. So, it's more wait and watch as the policy comes in sometime in October, November. As of now, it's been kind, right? So that's the one that has given us the kicker.

Understood. And just to get my figures right, did you mention that excluding AP, the volume is 3% and the price is 2%?

The volume is 3% and the mix is -- no, no, total growth is 3%, right? So, the -- excluding Andhra, if you just strip out Andhra, right, our total NS V growth is about 3% and volume will be 1%, right, because the price-mix is 2%. Shweta did I get that right?

Okay. Okay. So basically, your total volume growth is 9% and ex-Andhra is 1%. So, Andhra is about 8% of the volumes this quarter.

On volume, yes. On volume, yes. Yes, Percy. Absolutely.

Was it ever this high? Because my understanding was that it was more in the r ange of about 4.5% to 5% before all the problems in Andhra happened.

Yes. Percy, value contribution was always in the 5% range, 4.5% to 5%. Volume contribution was always higher. Like I mentioned, it is a lower Prestige mass market, right? So, volume is higher.

Got it, got it. That's all from me. Thanks, and all the best.

Thank you. Next question is from the line of Latika Chopra from JPMorgan. Please go ahead.

Yeah, hi. Thanks for the opportunity. Let me just check a few things on Maharashtra. In your initial comments, you said the revenue salience for the state is about mid- to high teens. I would assume the BIO and parts of BII portfolio have not been affected by the tax changes. So, if you adjust for this piece, would you say the impacted portfolio is a low double-digit kind of salience on aggregate revenue basis for you?

Yes. So, Latika, the BIO, BII portfolio is not a very large salience in Maharashtra. It's -- I think Praveen was mentioning it, I don't know, not in his comments, but somewhere else, right? It's largely a lower prestige and mid-prestige market, right? So therefore, yes, I mean, it could reduce by a percentage point. But by and large, it will stay in the same range of whatever Praveen mentioned in his opening comments.

All right. And the other bit that I wanted to understand from you was basis the prior episodes of price -- sharp price increases, I'm sure we have not seen probably something to the tune of 30% to 40%, at least not in my immediate knowledge, but definitely probably we have seen in the range of 15% to 20% in the past. What kind of a consumer behavior have you seen? There are also updates on how liquor from the neighboring states could come in. There is consumer down trading. But any specific episodes or examples on the quantum of volume or value impact that you would want to share? Just to give us some context on how the purchase behavior and growth rates have been affected in the past.

So, thanks, Latika. First, a very interesting question. As I said, alcobev usually shows a lot more resilience, okay, unlike some other categories. Whole FMCG category is a lot more sensitive to pricing. I believe alcobev is a lot less sensitive to pricing, and it's all in relative terms, I would say. That's the first thing I'd say. Also, if I -- I don't know if I said it, but I know I've done the market, done Maharashtra over the last 1 month. And as we loo k at data, what we are seeing is that consumer spends are showing a strong double-digit growth, overall consumer spends. If you look -- went to the retail outlet and looked at what they actually saw in terms of retail sales in the month of April, May or -- and what they see after mid -July when the impact of the price increase, we are seeing a strong double -digit growth, whic h tells me -- that talks to the resilience of the category. That's the first thing I'd say. However, as I said, we took a 30% -35% price increase. That's something we need to keep in mind, and it's very early days. So, what gives me comfort is the growth in consumer spend and the strong double-digit growth in consumer spends. That gives me some comfort. We still have a long way to bridge. There are many things we'll need to look at carefully. And therefore, we will need to be agile as we go through the next few quarters as we restate our laddering and segment the portfolio and play the Brand X Pack X Price opportunity. But that's an exciting space. But I can say the sticker shock has not -- is not half as bad as what I would see in other categories. And that's, to me, very, very positive. Does that answer your question, Latika?

Yes, to an extent. The second question that I had was on this import duty reduction benefits timeline. Any updated thoughts here on when we start to see some of that effect flowing through?

Yes. So, Latika, we believe it will -- it should happen in the April -June quarter, right, which is the first quarter of next fiscal . Because these products also have a long pipeline, right? At any point of time between the high seas and the stocks that we have for across the country, et cetera. There's a long inventory pipeline. So, we believe that will happen sometime between April and June.

All right. Thank you so much.

Thank you.

Thank you. Next question is from the line of Jay Doshi from Kotak Securities. Please go ahead.

Hi. Thanks for the opportunity. Some more numbers, if you can share on Maharashtra. First of all, are you seeing by any chance upgradation from popular to lower prestige or lower prestige to mid-prestige in Maharashtra given that you've absorbed a larger part of tax increase in mid - prestige and then some lower prestige and you've not taken -- you've not not passed on any. So, are you seeing that trend? And how big is the popular market? I know DSP Black is a very large brand, but would really want to know in terms of volumes, which are -- how big is the market? And could this be opportunity in some form in terms of relative market share for United Spirits?

So, Jay, first, good question on how the segment -- it's very early days. I don't think we have any reads on premiumization, as you call it, or we all call it, where people are getting laddered from popular to lower prestige to mid -prestige. And look, the pri ce difference between popular and lower prestige has significantly reduced. So, you're bound to see some upgradation, okay? The price difference between lower prestige and mid -prestige remains the same. But I think typically, there are some price points which seem a lot higher than they really are. So, we'll go through all of that. Too early to say what will be -- will there be upgradation and what is the percentage of upgradation? There will be some play. But I think the biggest beast in it has still not come into play, which is MML. And as and when it comes in, we will really read the market as to what is the laddering, what is the premiumization and therefore, what is the upgrade and where will the volumes start aggregating. But this is a wait and watch, and we are carefully seeing t he market. And as we build trends, we will appropriately adapt ourselves to unlock potential.

Understood. Second is on your -- you still maintain an aspiration for double -digit growth in P&A. But when I look at the recent quarter numbers ex of AP, and AP will start anniversarizing from December quarter. So, I feel that ex of AP and ex of Maharashtra, the growth trajectory was not yet strong. And with some headwinds in Maharashtra and AP anniversarizing, I don't know, am I missing something? Are you sort of -- are there any tailwinds in other states that makes you confident? Or are you - - is there a good chance that Maharashtra government may roll back or at least partially roll back the tax increase, so you are hopeful that maybe in second half, things could actually be better than what today, mathematically it appears to be?

So, the second part of the question, does Maharashtra government roll back? I think I need to go to an astrologer really. I'm not sure at all, okay, why they would roll back. The only reason they roll back is if they see drop in their duty collection over a consistent period of time, as I see. And that, in my mind, sounds not. As I say and as I see the consumer spend growth, I don't see that happening.

I'll give it a shot for at least some period of time to our assessment

So that's the second part -- first part. Look, as I said, my important thing is India is the portfolio of states, the markets which don't do well. And we went through the same phase a couple of years back when Delhi hit us. okay? Yes, there are sometimes headwinds, sometimes tailwinds. But even in that scenario, you overall managed to deliver double-digit P&A. Now as I see, if I look at UP, it's been a very progressive policy, okay? Our outlets have doubled. And just giving you -- there are lots of things which have happened, which give us the clear opportunity to unlock category momentum. MP, same way. Jharkhand is going to go through a new go-to-market in the next 30 days. So, I think there are states and there will be, in my mind, more states which will open up as this is a yearly policy, and therefore, we've always seen a balance. And therefore, our belief is that we will start seeing some of these build scale.

Understood. Thank you. And wish you the very best in this role Praveen.

Thank you Jay.

Thank you. Next question is from the line of Krishnan from Nirmal Bang. Please go ahead.

Hi Praveen, you mentioned -- just mentioned UP. What's your view on the developments that have happened on the ground in the last 5 or 6 months? How much have you seen the IMFL demand go up in the states because of practical, as you said, doubling of the number of outlets? And a follow-up to that, would there be a need to relook at your capacities in the state and make substantial investments?

Okay. First, we have a lot of capacity. So, I don't see capacity being an area of concern at all in that state. The rollout happened in pretty much end April to end May, and that's why -- so that's why I said it's -- the policy happened in March. The rollout happened in April and May. So, the outlets are starting to come into play, and you're starting to see that build out. So, we've seen very healthy growth. So very, very healthy growth in June and July in UP. That gives us the confidence that, that market is going in the right direction. So overall, UP policy is progressive, and we see that looking very good.

I wouldn't get into that because it's a collection of states. I wouldn't say -- that's why I didn't want to get to a state discussion. I said a few states. Each of these states are reasonable. What I gave you was one state given Maharashtra, the significant change.

Understood. And on Maharashtra, just one clarification since you mentioned mid- to high teens sales contribution. Would Maharashtra be more profitable and therefore, would the EBITDA contribution from Maharashtra be relatively higher?

Marginally, I would say, Krishnan, right, but not. I mean there was a time 6 years ago when Maharashtra used to be dramatically profitable compared to the rest of the portfolio. But over the years, the gap has narrowed down significantly, right? So, it will not make a material difference to the national algorithm.

Understood. And this is at an overall level, right? Because in Maharashtra, you continue to retain the popular segment, right? So, this mid- to high teens contribution would be at a total level or P&A?

Total level. Total level. Total level.

Value contribution is...

Yes, total level.

Just a minute. Before we move on, I just want to clarify on the volume question earlier. The volume ex AP on P&A is 1%, while total is 2.7%. Yes, move on.

Thank you. Next question is from the line of Harit Kapoor from Investec India. Please go ahead.

Yes, good evening. So just wanted a question on the broader competitive market environment. Some of your listed peers have seen fairly sharp acceleration in growth rates over the last 2 quarters, while Andhra is obviously a factor for them as well. But just wanted to get your sense on this acceleration in growth. And at the same time, the market demand environment at an overall level not being so conducive. So just some comments on the competitive environment, some of the large Indian players growing at a rapid pace, your thoughts?

First, don't really feel a quarter here and there, you'll always see some acceleration and deacceleration. But overall, we look at India growth by state, total rolling up and industry reports on an ongoing basis, on a regular basis. And I can say with reasonable confidence as even I have started seeing them consistently, we are in the top tier of performance. That's the first thing I'd say. Also, one of the things, and I think Pradeep alluded to it in great detail, is that you need to keep our current quarter performance in context of a high base of the prior year and some other things which he mentioned. So therefore, normalizing. And if I w ere to see our growth rates now and if you were to look at it first half of the year, you will realize that we should be on the right side at the top tier of the performance. So, I feel comfortable. And I also feel that sequentially, we've been pretty consistent.

Fantastic. The second point was you did mention about improving urban sentiment. I think you referenced to FMCG companies. But are you seeing that uptick going through the quarter, going through Q1 and into Q2 also that on-ground demand sentiments for the sector or for yourself, in particular, have seen some improvements, obviously, exing out the noise of Maharashtra being negative or UP being positive?

Look, I genuinely believe there are early signs of recovery. I wouldn't say moving in from, as I said, Q1 to Q2. I think there are early signs of recovery in urban. Where we have seen things improve further is rural, okay? And I believe the monsoons -- pretty healthy monsoons will help it further. So that I feel a lot. Urban, we've seen early signs of recovery. It shows up in all the other FMCG businesses. And I believe this -- I think momentum will continue. It will continue to improve. Festive will be the true test in my mind for all other categories and certainly for our category.

Great, wish you all the best. Thank you.

Thank you.

Thank you. Next question is from the line of Arnab Mitra from Goldman Sachs. Please go ahead.

This relates to the top end of the P&A where you mentioned that the growth trends are still very tepid. And I think our initial diagnosis was a macro issue, consumer is not spending there and also, we have a slightly high base coming out of COVID. But now that it's continued for a long time, I was wondering what do you think you need to do the growth back there? Any changes in price laddering, marketing? Anything happening on the competitive side, which is constraining our growth there? Because that's, I think, the main delta you can deliver on the top line if -- so just your thoughts on how to revive that part of the growth.

Okay. I'm going to , PJ build on that. But even last year, if we were to say, before I get into talking about how our brands are doing, even in the last year, the first quarter and quarter and half was very, very muted at the top end. The top end accelerates typically during the festive time. Before and right up to January, it really accelerates, and that's when consumption bunches and spikes up, okay? So that's the first thing. So, we saw the same behavior last year. We believe we will see the same behavior this year. And therefore, festive is an important part of that. Second, if you look at our brands, our brands are doing extremely well. We look at our brand scores on a monthly basis. And each of our top end trademarks, especially Johnnie is across its lines is looking extremely strong and is growing equity, growing differentiation. That gives us reasonable confidence that we're doing the right things. The consumers are loving what they see. Consumers -- the occasions of these are over-indexed during festive, and that's when, hopefully, we will see this unlock. So right now, we don't see anything new, or any big change required on what we are doing.

In terms of affordability in the category, any challenge -- is that one of the feedback? I don't know if in your consumer research that the price gap is quite large and that is there's a certain consumer upgrade, which is not happening? Or do you think pri cing is something which is not an impediment in terms of getting the growth back here?

So first, I wouldn't wash away if pricing is never an impediment. But I believe I don't see where we are in terms of pricing, depending on every state is a little different, and I want you to know that there are extremes -- 2 extremes on what that pricing could be. But I think it's reasonably well laddered. We have smoothly ensured if you look at our overall segmentation and the way we have laddered it is we've got upper prestige, we got bottled in India and that is our beginning of luxury and then you've got the top end luxury, which is BIO. So, it works very well. It's consistent. We don't see the issues. We'll keep tweaking it basis what we see and basis where there are opportunities. And I think we are -- it looks reasonably consistent.

Got it, got it. Thanks. That's it from my side. All the best.

Thank you.

Thank you. Next question is from the line of Prakash Kapadia from Kapadia Financial Services. Please go ahead.

Yes, thanks for the opportunity. Just one question from my end. If you could comment on the - - what we are seeing in terms of the state government's populism is increasing. Clearly, alcohol and real estate seem to be the easy target. What I was trying to understand is given larger states like Karnataka, Maharashtra are seeing uncertainty disruptions due to policy changes, due to excise duty hikes far higher. And these at least historically were far more larger states for us. So, is the offset by the newer geographies so high, we don't see a major impact on sales for the balance of the year? Is that what is likely to happen? Or you mentioned the consumer forgets about all of these things and then sales just normalize and there is no price impact, if any? And Delhi, how is the trajectory? Have things stabilized post the new policy? Those are my questions.

First, Delhi, the new policy is still not in place. The new government has come in and they are working on it. They've just continued with the old policy, and we are hopeful sooner than later, we'll see the new policy. That's the first thing. And as and when the newer policy could happen, that could be an opportunity. As I said, on the first part, India is a portfolio of states, and we've learned over the last 3, 4 years that we just need to be consistent and focused. And there are going to be some headwinds and for every headwind, there's a tailwind. And how do you bal ance that consistently and double down on the opportunity while mitigate the risk.

So, you don't really see much of an impact is what you're saying, it could be offset by some of the other states which we are focusing on.

You are so right. We're cautiously optimistic that we will stay true to our guidance.

Yes, that will be our aspiration, right? Absolutely. That is our intent, and that is our aspiration, right? Now obviously, as Praveen mentioned, the MML thing is yet to play out. We need to see that how that plays out. It could be a positive, it could be a negative, right? And then we continue to flex, right, in terms of what -- where we can extract growth in the rest of the country.

Thanks, sir. All the best.

Thank you.

Thank you very much. The last question is from the line of Karan K amdar from Choice Institutional Equities. Please go ahead.

Thank you for the opportunity. What I'd like to know is how do you see the white space between gin and vodka, gin has been on the rise and also you acquired last year, later than has been performing really well.

Sorry Karan. You're not clear at all.

Karan, there's a lot of background noise. We can't hear you clearly, right? So...

Is it better now?

Yes, this is better, slightly better.

This is better.

Yes. Sorry about that. So how do you see the white spirit space as between gin and Vodka? Do you see like gin outgrowing Vodka over the next 4, 5 years, Nao has also been performing really well? So about white spirit space?

Look, there are cycles in white spirits. Some years back, gin was the most high -performing space, and it grew rapidly. Over the last few years, if I may say so, vodka has seen a resurgence. So, these cycles for us, it's a portfolio. And we look at laddering and segmenting within the portfolio and build that out very, very consistently. We are committed and invested both in gin and in vodka. So, I don't know what will grow faster or slower, but I can say as the category grows, we are very well positioned to unlock potential.

Okay, sir. And one last question, if I may. As you said that Maharashtra is a headwind. Do you see UP becoming a tailwind in the future with a more modern policy and increasing number of retail outlets? How much of a tailwind can it be for us?

Okay. Thank you, sir. That's it from my side.

Thank you very much. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Ms. Shweta Arora for closing comments.

Thank you. Before we close today's call, I'm happy to inform that we have published our first integrated annual report. This shift from a traditional annual report to an integrated one marks more than a format change for us. It reflects a holistic thinking that connects financial outcomes with environmental, social, human and intellectual capital, offering a unified view of our strategy, governance, risk and opportunities. I request all of you to please do take a look, and we look forward to your feedback on the same. Again, on behalf of United Spirits Limited, I wish everyone on the call a very happy Independence Day. Please feel free to reach out to me if you have any further questions. Thank you all for joining. Have a good evening.

Thank you all.

Thank you. Thank you all.

Thank you very much. On behalf of United Spirits Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.