India’s largest liquor company, United Spirits Ltd., is facing a potential revenue hit after Maharashtra’s steep 50% excise duty hike on Indian Made Foreign Liquor (IMFL), prompting brokerages to flag near-term headwinds for the company.
🔴 Key Highlights:
- Maharashtra raised excise duty from 3x to 4.5x of manufacturing cost, aiming to generate ₹14,000 crore in additional revenue.
- United Spirits derives 15% of its revenue from Maharashtra, making it highly vulnerable to the tax hike.
- Macquarie downgraded United Spirits to ‘underperform’, citing volume contraction risks due to price elasticity.
- Goldman Sachs maintained a ‘buy’ rating, but warned of a 20–30% retail price surge, which could lead to consumer downgrading to cheaper alternatives.
- United Spirits’ stock fell 5.6%, trading at ₹1,519.4, while Radico Khaitan also saw a 4% decline.
📢 Market Analysts’ Take:
“The impact could be especially felt across United Spirits’ lower-end portfolio, where price sensitivity is highest.”
⚠️ Strategic Impact:
- Past excise hikes in Karnataka were rolled back after revenue collections fell, raising hopes for a policy reversal in Maharashtra.
- The introduction of ‘Maharashtra Made Liquor’ (MML) with a relaxed tax regime could shift market dynamics.
👉 What do you think? Will United Spirits navigate this challenge, or will Maharashtra’s tax hike dent its growth? Drop your thoughts in the comments!
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