United Spirits Q1 profit climbs to Rs 463 crore as RCB sale gains pace amid legal overhang

Mumbai: United Spirits appears to be raising a toast to operational resilience, even as it continues to nurse a lingering corporate hangover. The Diageo-backed liquor maker reported higher first-quarter earnings, buoyed by its sports business, while restructuring expenses and long-running legal disputes from the Vijay Mallya era continued to cast a shadow over its balance sheet.

United Spirits Limited reported consolidated total income of Rs 6,195 crore for the quarter ended June 30, 2026, up from Rs 5,885 crore a year earlier but lower than Rs 7,150 crore in the March quarter. Revenue from operations rose to Rs 6,122 crore from Rs 5,823 crore in the corresponding quarter last year, while total expenses stood at Rs 5,795 crore.

The company posted a consolidated profit of Rs 463 crore during the quarter.

The earnings were split almost evenly between the continuing liquor business and the discontinued sports business. Profit from continuing operations, which comprise the beverage alcohol business, stood at Rs 237 crore after tax. Profit before tax from the segment came in at Rs 319 crore, while income tax expenses totalled Rs 82 crore. Basic and diluted earnings per share from continuing operations stood at Rs 3.34.

The discontinued sports business contributed a further Rs 226 crore in net profit after tax, translating into earnings per share of Rs 3.18. Profit before tax from the sports business stood at Rs 268 crore.

On a standalone basis, the company reported total income of Rs 6,335 crore and revenue from operations of Rs 6,113 crore. Profit before exceptional items and tax stood at Rs 554 crore, while net profit came in at Rs 391 crore, with earnings per share of Rs 5.38.

The beverage alcohol division remained the company’s largest contributor, generating net segment revenue of Rs 2,708 crore, excluding Rs 3,414 crore in excise duty. This compares with Rs 2,549 crore in the year-ago quarter.

Segment EBITDA stood at Rs 429 crore. Total assets for the division were valued at Rs 14,187 crore, while liabilities stood at Rs 5,196 crore.

The sports business, housed under Royal Challengers Sports Private Limited, delivered net revenue of Rs 552 crore and EBITDA of Rs 264 crore during the quarter. The division reported assets of Rs 948 crore and liabilities of Rs 519 crore.

United Spirits continued to classify its sports business as a discontinued operation following its decision to sell its entire stake in Royal Challengers Sports Private Limited.

The transaction, valued at Rs 16,663 crore, was originally approved by the board in March 2026. An amended share purchase agreement was signed in May with a consortium comprising Bolt IPL Holdings LLC, Big Banyan Holdings Pte. Ltd, Asia Investment Topco II Pte. Ltd, Times Internet, Times Cricket LLP and ICQ Opportunities RC Holdco, Ltd.

The deal has already received approval from the Competition Commission of India and now awaits clearance from the Board of Control for Cricket in India before completion, which is expected within 12 months of the original announcement.

The company recognised net exceptional charges of Rs 81 crore during the quarter.

These included Rs 26 crore towards severance costs under its ongoing supply agility programme linked to the closure of an operational unit, as well as Rs 55 crore in employee severance expenses.

United Spirits also continued its rationalisation programme by preparing the financial statements of seven overseas subsidiaries on a liquidation basis as it exits non-core businesses. The company said the fair value reassessment of these entities did not have a material impact on consolidated financial results.

While operational performance remained steady, several legacy legal matters continued to feature prominently in the company’s financial disclosures.

United Spirits reiterated that investigations completed in 2015 and 2016 had identified historical fund diversions involving entities linked to former non-executive chairman Vijay Mallya. Related recovery proceedings remain ongoing, including a claim seeking recovery of Rs 13 crore in excess remuneration paid to a former executive director and chief financial officer.

The company also continues to deal with regulatory proceedings involving the Securities and Exchange Board of India, the Enforcement Directorate, authorised banks and the Serious Fraud Investigation Office arising from historical matters.

Another long-running dispute relates to an unsecured loan previously extended to United Breweries (Holdings) Limited. Following years of litigation and an adverse arbitration award, United Spirits wrote off the remaining Rs 1,238 crore balance earlier this year after its challenge was dismissed by a Bengaluru court. The company has appealed the decision before the Karnataka High Court while continuing to contest proceedings initiated by the official liquidator.

Separately, a dispute with IDBI Bank over the prepayment of a term loan remains pending before the Karnataka High Court. United Spirits has deposited Rs 46 crore in a suspense account under court directions and maintains that it expects to recover the amount once the litigation concludes.

With its core liquor business continuing to deliver stable earnings and the lucrative Royal Challengers sale moving closer to completion, United Spirits is strengthening its operational focus. However, the company still has to work through a sizeable list of legacy legal disputes before it can finally put the past behind it.