United Spirits Limited ($UNITDSPR)

Ladies and gentlemen, good day, and welcome to the United Spirits Limited Fourth Quarter Financial Year 2026 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Shweta Arora, Head of Investor Relations, United Spirits Limited. Thank you, and over to you, ma'am.

Thank you. Hello, everyone. Good evening, and welcome to United Spirits Limited Q4 and Full Year FY '26 Earnings Call. Before proceeding with the presentation, I would like to remind the listeners that during this 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 results may materially differ from those expressed here, all implied by such forward-looking statements. I request all of you to refer to our financial and press release posted yesterday and presentation posted today. Those are available on stock exchange and company website under the Investor section. Today on the call, we have with us Mr. Praveen Someshwar, our MD and CEO; who is joined by Mr. Pradeep Jain, Executive Director and CFO. Praveen and Pradeep will take you through the financial review and financial results and business performance for the fiscal year 2026, followed by the Q&A session. And with this, I hand over the call to Praveen for his opening remarks.

Thank you, Shweta. Good evening, everyone. Thank you for joining in on the call. It's been a little more than a year that I've spent with Diageo. What a year it's been. In balance, excited about where we are. We're going to talk you through the business update and a full year '26 update and our reflections going ahead with the financial highlights. Now this, in summary, is a reflection of the year gone by, my in a business that has seen a reasonable good last 4, 5 years and would want to say to all of you that the best is yet to come, have always maintained in our interactions over the last few quarters that we need to continue what is working well and need to change what can be better. And the combination of two will unlock our true potential. And in that sense, I would want to call out several things that have been already working there, whether Signatures that have continued to perform competitively in the Upper Prestige segment or Black & White in the primary scotch segment, a global trademark for which India is the #1 market in Diageo. We continued our excellent work on Johnnie Walker, which posted strong growth during the year. Our format innovation, especially pocket pack, what [indiscernible] efforts to have the triple benefit interventions, are contributing meaningfully through segment leading growth in the Mid-Prestige segment and value chain productivity. Now coming to the areas of the portfolio where we have done changes over the last year. First and foremost, opening the world largest vodka brand, Smirnoff, to local flavor innovation, and how it has responded and started to contribute meaningfully for our overall growth scenario. In this fiscal year, we've crossed the volume of 1 million cases on the trademark. Last quarter itself, it has done over 400,000 cases. Second, accelerating the tequila category creation. Again, it's a INR 100-plus crore trademark and has long legs for sustained growth in future. It's already captured 1/3 of the tequila market and it's expanding the category. It's growing share, expanding category. And considering the price points we operate at, our value share will be significantly higher. Third, I've spoken about the on-premise opportunity multiple times across these forums and in the importance of the same to build our plans. We are ramping up our investments in this channel that makes our brands come alive for consumers, allowing us to highlight their rich legacy and purpose. We are convinced that in this category, that is alcobev, how our brands show up in on-premise is an extremely critical enabler for long-term top of mind and equity recall, and we have already seen green shoots on the same. As we move into the new fiscal year, we are feeling good on the policy front, driven by the progress of intervention in Karnataka that will provide a much-needed for continued premiumization of the category in the state. And with the India, U.K. FTA likely to come in place in the near future, scotch, which is our core strength, will become more accessible and improve penetration. Last but not the least, what's going well, we are extremely happy with the sustained productivity agenda that we have given and that we are being able to extract from the business value chain year-on-year. We will share more details on the same as we progress in this session. Now all of that is stuff which has worked for us. Coming to the headwinds in the year gone by. And all of you are aware of Maharashtra. We're doing what we can through the industry association and the legal route. Keeping that aside, I believe the worst impact has now been absorbed in the quarter gone by, and sequentially, it should not deteriorate from here onwards while we'll still have a couple of quarters to cycle on prior year comparators. And then the softness in our anchor trade, McDowell's which across Rest of India, excluding AP and Maharashtra which are states which are impacted, has also been flat. We've now been working on the transformation of McDowell's for the last year and have completely transformed bundle of McDowell's. It's getting launched, and its very first market as we speak, that is Uttar Pradesh today, actually over the last couple of days. I'll spend more time on the McDowell's transformation in the next few minutes when we come to the portfolio. That was my summary of if, I may say, of the year gone by. Let us move on as we see what the numbers say. The numbers on the slide clearly indicate that if we take out the states impacted by policy change, headwinds and payments, that is AP and Maharashtra, the Rest of India, which is roughly 80% of our national portfolio, has grown double business in both P&A and total portfolio and have seen a sequential pickup in momentum over the time. And because if you further see Mid-Prestige, and that's not on the chart, but if we see Mid-Prestige, it's then a small point, if I may say. So Mid-Prestige and Above segment, the same has grown in high teens. Mid-Prestige and Above about nationally, including Maharashtra and AP, has also grown in mid-teens over prior year. Allow me to unpack this further on the next slide. Let me walk you through the segment price performance of the business and a slightly different math. As mentioned on the previous start, P&A in Rest of India excluding Maharashtra and AP, which are the impact states, had a solid 11.3% for India versus prior. And within that, Mid-Prestige and Above has grown at high teens at 17%, 17.1%. All segments from Mid-Prestige onwards are posting healthy growth rates in the year and all have momentum as we enter into the new fiscal year. While we always continue to see our business as P&A, including Prestige, what we have observed increasingly are the varying definitions of P&A floating in the industry. The Mid-Prestige at above growth rate will ensure fair and like-to-like comparisons on an annual basis with some of these players. My second key message that I've already spoken of in summary is that the opportunity on Lower Prestige and McDowell's. I'll come to it very soon, and you can see it's more flattish as we've seen over the last few. Last but not the least, coming to the two excluded states of Andhra Pradesh and Maharashtra, it is clearly visible that both of those states have impacted growth, one positively and another negatively. Both combined, we have lost about 120 basis points of growth this year. But clearly, the Rest of India business is delivering double-digit growth, and our exciting plans ahead give us the confidence that in the coming year, even with Maharashtra and AP excluded, on P&A, we should be able to deliver our double-digit growth guidance. Let's take a step back and start with a bigger picture. India is fast emerging as the consumer market of the next decade, backed by strong economic growth with GDP expected to reach 7 trillion by 2030, and more importantly, very high quality growth. Our young population, median age roughly 28 combined, with a rapidly expanding middle and upper middle class is reshaping consumption. Over the next 5 years, India will add around 100 million legal drinking age consumers, nearly 1/4 of the global additions, making this a globally significant growth story. This is further enabled by a vibrant democracy and a digital-first economy that is expanding access and driving aspirational consumption. Bringing that to our category, India is already the #1 whiskey market by volume, 2 by value and the second largest spirits market globally. It contributes roughly 39% of the growth in global total beverage alcohol and remains the fastest growing large market. Importantly, we are still early in the growth curve. With spirits penetration at 40% and per capita consumption at 2.6 liters, it leaves significant headroom for growth. Now looking ahead as of today, in spite of the West Asia troubles, the combination of macro payments, a young and expanding consumer base, rising incomes and increasing premiumization with significant category headroom creates a compelling opportunity that we are well positioned to capture. Our strategy clearly leveraging this India moment. Let me touch on how we are positioning ourselves. India alcobev market is clearly shifting. Growth today is being driven by premiumization and closer alignment with evolving consumer aspirations. In response, we've reshaped up portfolio strategy around three clear priorities: winning consumer occasions which will drive penetration up, accelerating premiumization and investing in future backed innovation. At the same time, we are building a future-ready organization focused on unlocking critical talent gaps and embedding a strong learning culture to stay agile and confident. And finally, all of this anchored in our broader response through our spirit of progress agenda and our commitment to contributing to the vision of Viksit Bharat. Let me talk about our portfolio strategy, which is anchored in a deep consumer-first lens. We think of India as 3 Indias: India 1, which is approximately 49% of the population and happens to be 49% in terms of value salience. It's highly aspirational but income-constraint, therefore, seeking affordable access to aspirational brands. This is what is driving penetration for India; India 2, which is roughly 28% of the population and 19% in terms of value salience. It's the core middle class, driving consumption with a focus on value for money and is seen constantly premiumizing; India 3, which is roughly 8% of the population and 7% of the value. It's affluent and new wealth, seeking premium experiences and self-expression and repertoire. We have consciously chosen not to play in the bottom 20%, if I may say so, given the limited affordability, a shrinking base and societal considerations. But we have constantly seen that the lower base is premiumizing very, very rapidly. Importantly, our portfolio and the category are structured around these 3 Indias and premiumization,, ensuring sharp alignment to consumers. And finally, our strengths lie in brand building with 5 of the top 10 equity brands including Signature, RC, McDowell's, Black Dog and Johnnie Walker playing in these phases. Now if you see each of these 3 Indias are driven by varied listing realities. While incomes are rapidly, or should I say, rising across sectors, surplus is growing in India 2 and 3 while declining in India 1, and therefore, shaping very different consumer behaviors. From a category perspective, alcohol consumption is growing across all segments: India 1, 2 and 3. However, India 1 and 2 are driven by higher penetration and frequency. India 3 is led by affluent growth with some moderation in frequency due to the experiences. However, what we are seeing that there is constant premiumization even in India 3, which is driving the growth. Our 4 clear trends cut across all segments. Recruitment, which is primarily in India 1, continues in India, 2, which is about expanding the consumer base through the LDA, women and the scotch categories. Premiumization, a clear shift which we are seeing across India 1 and 2 or 3 to better quality. Repertoire, it's more in India 2 and 3 but prominent in India 3, which is about more experimentation and experiences. And the India confidence, the growing pride in its own culture and the rising aspiration-driven consumption across India 1 and 2. Now our playbook is very simple. We have differentiated strategies across the 3 Indias because one size clearly does not affect it all, anchored in a full portfolio approach with clear competitive choices, now with a very different set of competitors playing out in India 1 and 2 and 3. Execution is sharply tailored. For India 1, it's about anything drinking better at scale through pack price and format innovation with a strong focus on accessibility and equivalent. For India 2 and 3, the focus shifts to upgrading the experience with innovation around occasions, culture and flavors and a clear push towards premiumization. So in essence, everything we do, our metrics, innovation and propositions, is tightly aligned to the distinct needs of each of India. Let me start with the Indian 1 consumer and how the brands playing around there. Our Royal Challenge continues to perform strongly on the [indiscernible] driving share gains across both Mid-Prestige and now, as we call it, New Prestige. Growth is clearly being led by the 180-mL segment, the pocket pack, which has become sensible to our expansion. We are also stepping up media to build sharper brand distinction. Our latest campaign, [Foreign Language], is designed to create excitement and keep RC top of mind with new consumers, featuring contemporary icons like with [indiscernible], popularly known as [indiscernible]. So clearly, all of them coming together. We are building very deep engagement through the sports integration, leveraging a high fashion platform for our audience with purchase linked activations to drive trials, excitement and conversion. Let me play the video of [Foreign Language]. [Presentation]

After rigorous testing over the last several months, we are absolutely confident that we have a trending funnel rolling out from May this month. As we speak, in the last few days, it just got rolled out in UP, and we are excited what we have heard from our consumers and partners. In essence, this is a full reset of the world's largest whiskey brand by volume, builds to reignite growth and bring back its consumers. Let me play the video. [Presentation]

So we believe this is going to reinvigorate and recharge the massive category back to growth. Now coming to India 2. And Black & White, it's a significant part of that opportunity. Our scotch portfolio continues to deliver very, very strong momentum in this space. Black & White is now the largest cost band in the country by volume, strengthened by a refreshed design and cultural platforms like table for everyone, along with the high-impact partnerships such as Premier League and Lollapalooza. Black Dog is also back to gaining traction with a renovated range rollout and the Savor the Pause campaign with [indiscernible], which is driving strong engagement. At the portfolio level, we lead in scotch with Johnnie Walker, where entry-level scotch acts as a key gateway to premiumization, especially for our India 2 consumers. With FTA and evolving market opportunities, this will play a significant runway for recruitment and upgradation, which we are very, very well positioned to capture. At the Upper Prestige space, we have Signature, which continues to lead with a distinctive positioning around conscious living. This has helped drive strong equity ahead of category growth and share rates. We have brought this to life through our regeneration campaign in Odisha, amplified by a One Good Nature communication. At the same time, we are building culture relevance through partnerships like [ Heely ] and [ Zero Flexible ], reinforcing the brand's connection with sustainability, music and purpose. Overall, Signature is winning by combining strong equity with a clear purpose-led narrative. What a year it's been for Smirnoff. We are starting to this brand bring back nationally. We've crossed 1 million cases and entered 1 of the top 5 global markets, underscoring both scale and strategic standpoint. As I mentioned earlier, we exited fourth quarter volumes north of 400,000 cases. We are now at INR 350 crores NSV, growing at triple digit as we exit the year under the clear trajectory to get the INR 1,000 crores over the next 18 months. This will help to close gaps in this mass growth space. Growth is strongly flavor led with the portfolio entering the INR 100 crore club and innovations like Minty Jamun delivering record monthly volumes. At the same time, we are building strong brand love with Gen Z from large scale experiences like the [indiscernible] across 3 cities to high-impact cultural platforms like Lollapalooza and full activations, we are strengthening relevance across touch points. Putting it all together, we are not yet scaling volume. We are building momentum through the right mix of flavor and innovation, culture and consumer experiences. Now spirits, the trademarks have now successfully integrated and are starting to stabilize within our portfolio, on track to fully extract the potential of the business around Greater Than, Hapusa and Peak, all 3 really trailblazers in their own categories. Now we come to India 3, the top of the pyramid. Johnnie Walker continues to build strong customer relevance and premiumization. Our latest key working campaign with [indiscernible] is reconnecting the brand with young affluents. We are driving desirability through on-trade experiences like whiskey experiments and scaling cultural impact via platforms like AP Dhillon and Sun. Importantly, we are leveraging the full portfolio across 3 Indias from accessible formats, driving recruitment of premium offerings, strengthening our luxury credentials. India is now a very important market. It's #3 globally by volume and #4 by value for Johhny Walker. Godawan is truly a crown jewel in our portfolio. It's a purpose-led, deeply anchored in activation, supporting the revival of the great Indian basket known as Godawan, making it much more than just a whiskey. At the same time, it delivers world-class distinctive liquids with growing presence in India and local markets. This is reflected in the strong recognition of 100-plus global, including that reinforce its potential to become a leading global whiskey. It was humbling and encouraging to see this work at a national level, and The Honorable Prime Minister highlighting it in [indiscernible], that sustained scientific and on-ground efforts are making a real difference in protecting the great Indian basket known as Godawan. This reenergizes the team and only people are resolved to keep moving forward. Overall, Godawan brings together purpose, craftsmanship and innovation creating uniquely Indian brand we are incredibly proud of and growing triple digit through the year. Don Julio has been a standout success. It's in the process of growing brand in our portfolio to reach a INR 100 crore club, underscoring strong premium momentum, positioning it as a tequila of choice for luxury occasions, bringing Mexicana culture to life through campaigns like Day of the Dead and Cinco de Mayo, alongside experiential activations such as Paloma Time in key on-trade platforms. With tequila as a category growing strongly, Don Julio continues to outpace the market, delivering high double-digit growth and continuously gaining share. If you look at the slide and the scale of innovation and granulation delivered over the last year, it clearly demonstrates that we have left no stone unturned in strengthening this agenda. In fact, I would say this is a distinct competitive advantage for us, right from deep consumer insighting to delivering the right product proposition in the market. What is equally important is the breadth of innovation across the portfolio. The initiatives span liquid innovation, renovation, evolving flavor profiles, pack and format changes as well as premium limited editions, where the purpose-led offerings such as Godawan 173 are culturally resonating activations like Johnnie Walker Blue Label Diwali Edition. Innovation continues to be a key enabler of our growth ambition, helping us drive premiumization, recruitment and strong brand salience across locations. I'm sure all of you are very familiar with this slide. This effectively demonstrates the success of our sustained efforts to build and strengthen our trade models. The results speak for themselves, a complementary portfolio that is delivering both on volume and with the talents that we play to the India 1, 2 and 3 opportunities, and therefore, creating scale and premiumization. Now we have 4 trademarks with a greater than INR 1,000 crores NSV, as Signature just enter the INR 10,000 crore club. So we moved from 3 to 4 trademarks this year in a INR 1,000 crore club. There are two which are INR 100 crores plus, and I'm confident that it's just a matter of time before Smirnoff comes into that slot. Now there are 5 which are INR 100 crore plus as Don Julio joins the club in the INR 100 crores plus club. We have 8 1-million-case trademarks in our portfolio. Again, as I mentioned, Smirnoff is now 1 million case. McDowell's is the largest selling whiskey in the world with roughly 30 million plus cases Now as we get to [indiscernible] society, it's particularly something which is very, very important for us. While we are accustomed to evaluating business performance from an internal albeit holistic lens, this study takes a step back. We have worked with Pahle India Foundation, the name that translates to India first. It highlights the broader economic and social impact of Diageo India, extending well beyond the immediate boundaries of our business operations. Our total economic contribution to the country as indicated in the report, direct and indirect combined, stands at approximately INR 49,000 crores. We support 630,000 jobs through direct and indirect contribution and our contribution to [indiscernible] stands at roughly INR 20,400 crores. Our CSR spends are roughly INR 22 crores and have 2,26,000 beneficiaries. Now this independent assessments performed by a leading Indian think tank reassures all of us at Diageo ULS to see a meaningful contribution to the Viksit Bharat situation. It is encouraging to see our ESG journey progressing in the right direction also as reflected in improving scores and industry building recognitions. Sustainalytics has set us up at a medium risk rating with a score of 21. Focused interventions are underway to further strengthen our ESG profile and progress towards a low risk rating. On Dow Jones Sustainability Index, we continue to see steady year-on-year improvement, reaching 61 on 100, positioning us amongst the leading alcobev companies in India and globally. On the [ NSE/ESC ], we are rated for the first time and achieved a strong score of 73 on 100, placing us amongst the top CPG companies in India. We have also received multiple accolades for our manufacturing and ESG practices from prestigious industry awards. Now as Diageo, we continue to make focused investments to further strengthen the core of our organization. Our people priorities are focused on building future-ready capabilities that should business performance, both today and for the future. Innovation commercialization is where we have invested heavily over the last few years. Overall, the organization structure in the last fiscal year, the focus teams and sharp KPIs to support the growing innovation pipeline, aligned with evolving consumer trends. As we have always maintained, we would want the share of innovation contribution to our growth increase year-on-year. Now, if we don't include pocket pack, we are roughly around 25% of our growth comes from innovation. And if we would include pocket pack, it's north of 17%. Clearly, it just tells us the part of our investment. Our second pillar is on on-trade. I've spoken about this earlier as well, and it continues to be a clearly identified area requiring focused intervention, sustained effort and ongoing refresh. We've refreshed our on-trade organization and strengthened capabilities to align with our sharpened strategy, recognizing the critical road of on-premise channels in discovery, recruitment and accelerating premiumization. Our focus remains on building strong luxury capabilities through the right talent, the right structure and a culture of continuous learning. The third pillar, or should I say, a very key enabler, which is to drive digital penetration across our organization. We made quite a few interventions on scaling capability across our sales, commercial functions, expanding AI and data analytics skills across Diageo and driving operational excellence within supply. We want our associates to have a borne digital mindset over a period of time. Our internal employee feedback survey achieved exceptional 94% response rate, reflecting strong employee engagement and trust. Employee Engagement Index remains strong at 90%, significantly higher versus benchmarks, alongside an IND score of 88%, while our employer NPS of 66 and product NPS of 84 reinforce the trust we continue to build with both our people and consumers. Our commitment to building a thriving organization and inclusive culture has been recognized across multiple platforms, reflecting our continued efforts to make Diageo a Great Place to Work. We were recognized by the India Workplace Equality Index as a gold employer for the third success year, and we were also awarded winner in Women Desk Presentation in senior management. In addition, Diageo India received the Great Place to Work certification, reflecting our continued focus on building a thriving, inclusive and high-performing organization. With this, I hand it over to PJ to take us through how we are doing on financials.

Thanks, Praveen. A very good afternoon to all who have joined. As always, great to interact with this cohort, especially on the annual call, where we dig a little deeper into our full year performance. Praveen has already done a tier down of the revenue growth in his section, so I will not repeat that here. We'll get to that in the next few minutes. As you will observe, we have delivered a leveraged performance on the P&L in the full fiscal year. EBITDA growth stands at 11.6% against an NSV growth of 7.6%, which translates roughly in a 1.5x growth multiplier. Gross margin was 46.4%, up 172 basis points on a reported basis, 11.7% gross growth. And our EBITDA margin reached 18.4%, about 66 basis points better than last year. This is very much in line with our guidance of mid- to high teens EBITDA margin. Reemphasizing the free cash flow generation capability of this business, it has turned in INR 1,375 crores on that front during the year. I'm also pleased to share that the Board has approved a final dividend of INR 11 per share, subject to shareholder approval. Including the interim dividend of INR 6 per share declared in Jan '26, the total dividend distribution for the fiscal year will amount to INR 17 per share. That translates to a PAT payout ratio of 57%, having increased from the 50% payout ratio 2 years ago when we resumed dividend distribution after. Return on capital employed stands at a healthy 28% versus 26% last year. This is a familiar chart for all of you, but we would want to keep reminding all of you of this year-on-year. It is something that epitomizes our growth philosophy. That is the virtuous cycle of growth, critical to building and sustaining a healthy business. Our continuous focus will be on driving the flywheel to keep strengthening our portfolio while accelerating top line. Productivity and revenue growth management will need to collectively offset inflation while enabling a careful balance between marketing efficiency, investment efficiency and long-term brand building. Together, these actions should support sustained profitable growth. Okay. This is a particularly important chart, and I will spend a minute on the same. First, I want to reiterate that fiscal 2025/'26 includes 6 months base benefit from the reopening of Andhra Pradesh, following recommitment of business in September '24 after the gap of 5. Additionally, this also reflects the impact of Maharashtra excise policy revision, again, 6 to 7 months adverse impact to us. While both Andhra and Maharashtra are extreme critical markets for our business, the impact of developments in these two markets are distorting the underlying organic growth trajectory of the business, reflected in the reported number that you see on the left-hand side of the chart. It seems to suggest that our portfolio has performed in the same vein at the prior year. Now if I draw your focus on the chart on the right-hand side. Our Rest of India business excluding the impact of Andhra and Maharashtra, which will roughly be 75% to 80% of our national P&A portfolio, is delivering a healthy growth of 11.3% in Prestige & Above and 10.9% on a total portfolio. And these growth levels have significantly accelerated versus the prior fiscal year, approximately 500 basis points acceleration. This is what gives us confidence as we enter fiscal year 2026/'27. We move to the next slide. Right. Okay. Now this is a slightly different cut of what Praveen has already flashed in this section. He referred to percentage growth. While here, we are giving you a sense of the absolute rupees growth. what added to the growth and what was soft. So as you will see, we've roughly added about INR 900 crores to our top line, to be precise INR 875 crores. And if you look at the left-most and the right-most bar of the chart, the premiumization ladder remains firmly intact. The salience of the Mid-Prestige & Above segment increased from 56% in the prior fiscal to 60% in fiscal '25/'26. A tad higher than what would have happened had our LT segment also contributed to growth. . And if you look at the middle bar, which represents the forces of growth, it further reinforces the strength. We can see that in Rest of India excluding Andhra and Maharashtra, mid-50s and above segments grew by 17% over last year, adding close to INR 960 crores to our top line. Popular added another INR 70 crores, Lower Prestige was flat, and United has already taken all of you in detail on what we are doing to revive growth in that segment. Overall, Rest of India business delivered a net addition of approximately INR 1,020 crores, growing at 10.9% over last year. And then on the extreme right-most side, the two impacted geographies of AP and Maharashtra, one positive, the other negative. I'll move to the next slide. This is a status update, as we have always done over the last 3 years on our multiyear supply agility program. We are now approximately 3 to 3.5 years into the program with considerable progress achieved against all key objectives. Our colocation initiatives are now 100% complete while footprint optimization is approximately 83% company. Importantly, the program continues to be executed with strong cost discipline with both cash and noncash costs tracking in line with budget. From a benefits perspective, actions for cost optimization that are already completed and will reflect in the P&L by the end of fiscal '27 will be close to 90% on an annualized basis. . And again, part of our virtuous cycle, let me take these one by one productivity. If we see the left-hand chart, right, the left-hand side of the chart, while the chart shows a decline in productivity, I would like to remind and reiterate a point highlighted earlier. The INR 514 crores productivity delivered in fiscal '24 included a onetime benefit of INR 160 crore to INR 170 crores from the mono carton removal with underlying productivity of INR 340 crores to INR 350 crores. Again, this base productivity increased to INR 388 crores in fiscal '25 and further to INR 415 crores in fiscal '26. That represents a healthy year-on-year improvement and reflects the strong productive capability embedded within the organization, which continues to help us mitigate more than 80% inflation year-on-year and deliver. Pricing and revenue growth management, top price inside, if you look at pricing and revenue growth management, INR 182 crores impact of fiscal '26 comprised of the carry-forward pricing of the prior year and the flow-through received in the current year. Together, we delivered a healthy INR 182 crores, equivalent to roughly 1.6% of last year's net sales. If you remember, we had called out last year that after 3 years of consistent and healthy headline price increases, we do expect these to moderate in fiscal '26, especially in view of the stable commodity environment. Net working capital on the bottom right-hand side. Our year-end operating working capital intensity have remained broadly in line with last year. This includes the higher level of Telangana receivables, which have broadly stayed at the same level since last year end. Building on the previous chart, healthy headline pricing, along with the strong productivity trajectory over the last couple of years has enabled us to step up A&P investment behind the plan. As mentioned earlier, sustained A&P investment in our trademark is a critical component of our virtuous growth cycle, which in turn supports portfolio premiumization and drives higher NSV realization per case. This year was no different, and we are glad we could step up the brand investments to support the growth and innovation agenda of the portfolio. To conclude my section, I would want to finish with a chart that does not require any explanation and the numbers can do all the talking. Our EPS and ROCEs have consistently improved year-on-year, demonstrating the strength and resilience of our operating model and the continued support of all our stakeholders. With this, I would want to turn it back to Praveen for his concluding remarks before we open it up for Q&A. Over to you, Praveen.

Thank you, PJ. Just wanted to conclude with my thoughts as we look forward over the next year and a couple of years. We're still focused on the great India consumer opportunity. We have favorable demographics, growing affluence and the India confidence and pride on our side. Overlaying that with key industry drivers, including the largest pool of new LDA consumers entering the category, penetration headroom, enabling treaties such as India-U.K. FTA as a huge premiumizing opportunity at the confluence of all these factors. Now I do understand, in the short-term, West Asia conflict could take a quarter or 2. But I do not think that will change anything of the medium term. How we capture this opportunity is critical. We have a clear line of sight on both opportunities and interest, backed by consumer profile, strong innovation capability, differentiated liquid access, a national footprint, and most importantly, organizational agility. Our teams are well positioned to capture value, execute effectively and convert these opportunities into sustained growth. Our actions are visible through sharp innovation, starting from McDowell's to now bringing it back to life, new category creation, we could talk about tequila, localized portfolios of powerful global brands like Smirnoff and stronger productivity [ parcel ]. The India U.K. FTA will further amplify this. Our growth playbook positions us well to unlock new white spaces and accelerate consumer-led growth. Our on-premise investments made in '25/'26 have started moving the needle and start [indiscernible]. As we enter F '27 we do so the rigor and confidence in delivering our ambition of strong double-digit growth for the P&A portfolio. Thank you. Happy to take questions.

Our first question is from the line of Jay Doshi from Kotak.

I've got two questions. First one, could you please elaborate on your optimism regarding Karnataka following the recent policy changes? It would be helpful if you can share some data points around current salience of P&A and mid-P&A and above segments in that market. And where do you believe this could trend in the next 1 or 2 years? Second question is for Pradeep. What would be the impact of inflation on business in the first half of this year or maybe full year? And will you be able to fully offset it through operational efficiencies and cost optimization measures?

Thanks, Jay. Thanks for your question. Yes. I agree with you, optimism of Karnataka is truly a progressive and welcoming one. It's cut years across -- its drops down from 16 to 8 on excise and has allowed flexibility for pricing, and therefore, building very high-quality laddering across different segments. It's not only Mid-Prestige & Above. It's also Lower Prestige and -- Popular to Lower Prestige to Mid-Prestige & Above. So that is what is exciting. As we've seen, as we have rolled it out to the market over the last week, across portfolio, we've seen reduction of pricing. Depending on which part of the portfolio, it is anywhere between 15% to 35%, which is significant. Now what we believe, and we also have to say that Popular, which is the lowest end, it's going to see a significant pricing increase, roughly around 17%, 18%, and it's going to break out from a magic price point of INR 100s. All of these factors give us the confidence. We've seen very robust growth over the last 1 year in Karnataka because part of the changes were also rolled out last year. But all of this gives us absolute confidence that you'll see very high double-digit growth unlock in Karnataka.

I'll take your other question, Jay. Karnataka is roughly about 7% of our national, taken out of...

Okay. I'll take the second part of question

Where do you think it should be now that the pricing structure has improved? What's the ideal sort of representation Karnataka should have in your P&L?

So yes, look, we don't want to kind of make assumptions around that. I think what Praveen has said is that, that should go significantly higher than the national portfolio average, right? That we are very, very confident. Karnataka was already doing very well in 2026. And that should ramp up, and it should grow significantly higher than the national portfolio average. After that, what range it reaches 8, 9, 10, we don't.

Jay, I think I'd add what PJ said here is that we are overindexed versus India share in Karnataka side of things. So we will be the largest beneficiary also. Yes.

Your second question, look, here is a broad headline, right? I don't want to -- I mean, take a guess on the full year number. But here is the way we are -- what I'm seeing already, and on the first half, I can provide some headline. Look, the large impact is on the packaging material cost, right? Packaging material costs are broadly 1/3 of my overall costs. right? And what we are seeing is, in fact, in the April-June quarter itself, packaging material costs will inflate by about 4% to 5% higher than normal run rate, right? So we do expect an overall gross margin of impact, anything between 1.25% to 1.5% of our total portfolio, right? That's roughly about -- anything between INR 35 crores to INR 40 crores impact, right? So that's on the April, June quarter, right? Now if the crisis continues for an extended period of time, this amount could well probably become 2 to 2.5x for the next quarter. So that's what I would -- we just want to remain focused on the first half. And then as things evolve, we will see how we have to respond. You mentioned the other bit around operational efficiencies. Absolutely. We can only do things that are in our control, and we will definitely be exploring every opportunity on how we can ramp up the additional productivity in our factories.

So at this point of time, you don't see a reason to call out any material margin impact. right? So there are headwinds, but you may have some cost...

There will be an impact in the quarter. There will be an impact in the quarter. And you know it from past experience, Jay, as you know. We will not -- pricing comes with a lag. But again, as the year progresses, we will keep you updated on it.

Our next question is from the line of Abneesh Roy from Nuvama.

My question is to Praveen. You spoke on the local flavors in Smirnoff vodka. So I wanted to understand if you have started gaining market share because the local player has almost 60% market share. Are you trying more of the premium end or overall market share in vodka also, you have a big focus there? And the second related question is overindexed in terms of Maharashtra. So if anyone just compares Q4 numbers or yours and the unlisted large M&C, I think we will get a wrong picture. So my second question is ex of Maharashtra, if you can talk about market share on an overall portfolio. And specific question was on Smirnoff vodka.

Okay. So look, on the Smirnoff part and the flavor unlock, as we say, it is a massive unlock. What we've done is local flavor, it's once-in-a-decade kind of innovation. Unlock, I mean, we are going to continue to build on it as we go through this. It's brought the mojo back to the Smirnoff brand, and we've seen it grow. As I said, sequentially, quarter-on-quarter, you'll see significant growth. And in the third quarter, as I said, it's 400,000 cases versus a 1 million case business. That tells you it's growing triple digit and it's obviously beating every other player, whichever categories, et cetera. We don't intend playing around the Smirnoff players. We will continue to play there. We believe we are in great momentum. And as we go on, we will unlock the right levers to continue to build on this massive opportunity. And we are certainly growing handsome share. And when you're growing as strongly as this, you are going to have some share include with or without Maharashtra. Is really not relevant that we to talk about Smirnoff because across the country, in each state, we are growing handsome share. Does that answer your question, Abneesh?

Yes, it does. One follow-up on your Maharashtra comment -- yes.

No, no, Abneesh. I was just saying just remind us of your second question. We missed that while we're answering first.

It is the same .

Yes, yes. That's fine. My second question was essentially on pricing. Last year, you rightfully said the inflation is low. So pricing for you also is low. This year, obviously, things are different. So apart from Telangana, any other state, any advanced discussions are happening? How much will be the price expectation given this lag generally you do get? So if you could speak on some of these states where I think there is high volatility of pricing.

So Abneesh, look, like we have always said, we always make efforts to get some headline pricing and we continue to make this effort, a little more intensely now in view of what's happening in West Asia. It's very difficult to call out how much headline pricing we'll get. We've shown you the last 4 year run rate. Whatever we get, we'll get, maybe with a little bit of flat or maybe immediately. So as it happens, we will. But typically, on a slightly longer time frame, we've always said that we would want to utilize 50% of inflation through headline pricing and balance 50% to productivity. I don't know, Praveen, do you want to add something?

I just want to add also that as PJ rightly said that there's really a lag. But as we see it right now, as policy changes are happening, Karnataka is going to give us some pricing back into our play. Rajasthan has given us some flexibility, and we are going to do -- Telangana, as you rightly said, is looking at and exploring it. We know MP, there is some cleanup and correction. So all of these are going to give us some small spillover before we get really the big increases over a period of time. So overall, pricing is going to be consistent in a medium-term basis.

So two small follow-ups and that is my last question. So Praveen, you mentioned that 2 more quarters of tough business environment in Maharashtra. But will it not be 2.5? Because Q3 did not see much of an impact of MML. So Q3, you will see that impact. So if you could clarify on that? And second small question is U.K. FTA. Another company said Q2, the industry may start seeing the benefit. What will be your take? I know everyone will have a take. But what's your take on UK FTA benefit kicking in?

Look, India FTA, it's all in place. It's at the corridors, so I'm not going to speculate when and exactly. But I think it probably will be sooner than later, and we are hoping that it will come into place. That's how I would really put it. Sorry, your first question was?

Maharashtra impact.

Maharashtra impact, look, I'd say 2 quarters. It's quarter 1 and quarter 2 effectively. I don't think it's going to sequentially deteriorate because we have taken the worst behind us, okay? From here, what gives us confidence is we've seen over the last 3, 4 months how the category has played out and where are they settled. We've seen it consistently now settled. Therefore, it's not going to accentuate, but we are going to see previous comparatives impacting us.

[Operator Instructions] Our next question is from the line of Percy Panthaki from IIFL Securities.

Just a question on the Lower Prestige part. The PPT slide, the waterfall chart that you have, where the Lower Prestige is basically almost flat kind of growth. Just wanted to understand, is that a function of the industry itself growing at that rate? Or is it that within that segment, we have lost some amount of market share?

So Percy, thanks for the question. So look, very clearly, if you look at the overall ladder, Lower Prestige is obviously softer than Middle Prestige and Upper Prestige. Middle and Upper Prestige in the upper end are clearly growing faster. There's no doubt about it. And this is for the industry, there is no doubt about it. But within Lower Prestige, yes, we have not performed well. We have seen sequential share gaps over the last 6 to 7 quarters. And clearly, that's an area of opportunity. And that's why this whole work around transformation to build back McDowell's #1 place. So clearly, we have seen softness, and the work is now with the renovation to build that growth in Lower Prestige and gain share within that space.

And do we have a problem analysis of actually what went wrong for us to lose that market share? Is it that our packaging was not attractive enough? Is it that the flavor was not good enough or the pricing was not the right one? What exactly was -- I mean, what is the analysis of the cause of the problem?

Yes. Percy, I think it's the sum of many of these factors. Obviously, we were not learning the consumer. And that was the concern. It's one of our biggest brands and we wouldn't want to do anything in a short-term manner. So therefore, we worked on an absolute clear transformation agenda over the last 1 year. We've relooked at the liquid. We've really looked at the packaging. We've really looked at the format. We looked at the overall bundle. We've researched it now in roughly 8 markets with 10,000 consumers to make sure that we are building significantly versus any other competitor. And therefore, we feel excited as we have come back into this.

Got it, sir. My second question is on margins. Assuming glass prices at where they are today, I think they have inflated 15%, 20% versus prewar levels. If they remain at this level for the rest of the year and there are pluses and minuses from U.K. FTA, et cetera, but assuming that glass prices do not come down, do you think that you would be able to maintain this 18.9% margin that you have delivered for this year for the next year as well?

Percy, like I said, responded to Jay's question earlier, I am not looking at 12 months sense right now. What we are very clear is that there is already an impact, which is roughly the 1.25% to 1.5% on gross margin for the April-June quarter. And if the crisis continues, that impact would probably roughly double in the July to September quarter. So that's what we would broadly want to look at. And you're broadly right. The ranges that you have mentioned are broadly right. It's not just glass that is getting impacted, because crude being up, even PET and our raw materials relating to PET are also going up. So it's an overall combination that is impacting the packaging facility.

Percy, all of this, as you know, will get marketed through our production facility. And we will obviously ramp it up, but we've already ramped it up. And that's how it's going to play out. What you have to look at over a period of time, this doesn't change anything. And actually, we seem to be reasonably comfortable. In the short term, there could be small ups and downs.

Our next question is from the line of Arnab Mitra with Goldman Sachs.

My first question was actually if I look at the fourth quarter results, there seems to be a moderation in your ex AP and Maharashtra growth also. So just wanted to understand if there were any factors specific to the quarter, like [indiscernible] or before the McDowell relaunch, it's played a role at all? Or do you think this was some kind of a slowdown which you are still seeing in the market as we speak?

Yes. Lots of issues around the fourth quarter. It's moderate. It's marginally not significantly, first thing I'd say. Second, yes, there's lots of issues. Early January, there was a set of very different initiatives to late March as West Asia triggered, obviously, a whole lot of issues around our own global portfolio came into play. We just needed to balance it to just make sure that we are able to sustain and resolve it. And that's impacted us a little bit. So also a little bit of what than we were last year same time. So there are many reasons for it but nothing significant as I will see, Arnab. In the moderation, I don't believe that's anything on a longer period, over a year or in the 9 to 12 months, I don't see any slowing down which are happening.

Got it. And just one add-on question to this one, sir. Is there any reason to look at numbers ex AP anymore given that AP is now on the base? Or were there some slightly higher than normal sales...

No, no, Arnab. Not at all, In fact, in terms of quarter alone of performance, we don't look at AP. But because we were doing a 12-month review with you, being the annual call, because AP was there for the first 6 months, et cetera, you're absolutely right, we should not -- there is absolutely no need to look at ex AP.

And as we go forward, we will certainly not look at...

Maharashtra will continue for the next couple of quarters.

Got It. My second question was really good to see you focus back on McDowell's #1. And my one question was, in the past, I've had a feeling that your focus was a lot more on Mid and Upper Prestige. Lower Prestige, does it still have the economics? And do you still have the cost structure to play in that segment because there is a lot of local smaller players who have now entered that segment? So just wanted to understand on the medium term, is this still a good economics business to grow? Of course, you still have to be there. It gives you scale and things like that, but in terms of trying to grow this business.

Arnab, it is a very big part of ours, number one. And number two, India 1, as we segmented it is a very big part and it's seeing very, very healthy growth, growth in penetration and frequency. A huge opportunity. And this over a period of time will ladder to our in portfolio. So we believe this is an absolutely important catch, okay? We have seen it slowing down over the last couple of years, not to say we are not focused on it. We've seen in slowing down. We were going slow to go fast. We were fixing at the back end, and we've spent time as we have gone through this renovation and transformation. And we feel, therefore, as it gets back to the market, it will charge growth at the Lower Prestige. Now coming to the economics. And PJ can add to it. Actually, PJ, why don't add to the economics first?

So Arnab, economics are not an issue. Look, as the enterprise productivity has scaled up over the last 3, 4 years, let's understand, being salient part of our portfolio, the maximum benefit also come from McDowell's. So from our perspective, the margin structure of the category is absolutely a laddered structure, and we don't see any concern in the margin structure of. For no economic concerns at all, all guns blazing, productivity have the maximum impact on McDowell, and we don't see any concerns.

Our next question is from the line of Harit Kapoor with Investec.

I had a question on McDowell's again. So if you could just take us through how this process will work now in terms of putting the product into the market, change on the new blend and packaging. And how long would it take you to kind of get feedback on how the customer is kind of accepting it? So just some sense on that. I mean, would you be able to get sufficient feedback in the first 6 months or in H1? Would that be the right kind of timeline to look at it?

Yes. So it's still starting to go into market. In fact, earlier this week, it got launched in UP. And obviously, all markets typically have 15- to 20-day stocks at various parts. So as it goes through, it can take at least another month to see it in full bloom in the market and so, and then you drive the agenda. So as I say, it takes every market in the third month is when you will see how it's getting executed, what is the consumer response. We can get early reads around it. But overall, so the early read is as we roll out to a market, to our core customers and a set of consumers, we see how they respond to it. And UP, we've just launched. There's been huge excitement around it. And that gives us the confidence. How long will it take across the country? I think it starts now and goes right up to end August. It's a very sequential form as we have looked at it market by market. And therefore, by end of August, we've been pretty much across markets in India. So yes, you'll start seeing how it performs somewhere mid-July onwards and start getting built around that part of the business to our overall portfolio.

And probably in the October call, Harit, we'll have a better sense and also [indiscernible] before the festive season, et cetera, will also be a reasonably good indicator. so October would be a good time to kind of give you where we stand.

Great. Good. And the second and last question was on the playbook bid. So the renovation, I mentioned there the strategy creation, participation in portfolio via white spaces. So I just wanted to get your thoughts on when you're looking into the portfolio now, any spaces which you feel that where there is still scope either to use the global portfolio might or innovate domestically, which can drive growth even more from here? Maybe premium vodka or whatever you think there are opportunities. Anything where you can just comment on in terms of how you're thinking about it?

Great question, Harit. When I say category creation, we are building category in tequila right now, as we see. We are unlocking the true potential of vodka through Smirnoff. We've already play brandy. We are significantly enhancing our play around brandy. We got to look at that very differently. It's certainly global brands which are waiting to come to India. We are evaluating each one of them. Then planning will decide will be versus the consumer opportunity and then we can bring it to market, but certainly looking at it. So over the next 12 to 18 months, you will see some exciting new spaces open up. We wouldn't want to talk about it because that's future looking, and it's a little speculative. But certainly, absolutely an opportunity and something we will evaluate very, very closely as we would.

Our next question is from the line of Krishnan Sambamoorthy with Ashika Institutional Equities. .

My question, sir, regarding a couple of other commodities. From what we gather, E&A costs were fairly stable for the fourth quarter. Could you just give an indication as to what has been the trend on that particular front recently?

E&A cost is reasonably stable. You've got it absolutely bang. And that's why, as I responded to the cost issues, it's largely centering around packaging materials.

Okay. And for this last quarter, you also indicated that while you are insulated from the rupee depreciation impact on bulk scotch because of your agreement with Diageo, there was some inflation that you had indicated. Anything to call out on the bulk scotch inflation ex rupee depreciation?

That's ongoing. That's ongoing. And on the scotch also, we don't have a month-on-month depreciation but there is an annual price reset in which the ForEx also comes and impact. So obviously, it cannot be -- because the ForEx inflation happens at source and the ForEx gets reset once in a month when the price is being reset. So that also does come and impact us. So if last year were at, let's say, 85, and today, the dollar is at 93, yes, that will come an impact. But that's part of our ongoing business as usual inflation. We shouldn't worry too much about that.

Okay. And lastly, given the dividend that you declared this year, any revision, a, from' your dividend payout policy; and b, intentions, if and when the proceeds of the RCB stake sale comes in?

Okay. So I'll comment on the first one, which is on the dividend part. We've already relieved, made an amended policy about 3 months ago. When we declared the January interim dividend, we had restated our dividend payout ratio. And then earlier, I think it was 50% to 70%. We've already moved it to a range of 60% to 85%. And that is pretty much synchronous with the payout ratios as we have increased over the last 3 years. Second one is something -- right now, we're just focused on closing the transaction. Once we close the transaction, we will worry about what will happen with the proceeds. So I would recommend that has to be something that will be a subject matter of USL Board's review and decision. So let's kind of pause that for a while.

Our next question is from the line of Latika Chopra with JPMorgan.

Most of my questions were answered. Just clarifications. One was regarding spend..

Latika, we can't understand what you're saying.

Is it better?

Slightly better, yes. Just speak a little loud, please.

Okay. Yes. So my first question was on advertising expense. This year, you landed at 12.4%. So are we maintaining the band of 9% to 10%? Is that a fair range for you to operate that?

Latika, I think I clarified that -- maybe not in the last call. I mean, we do see our A&P spend more in the 10.5% range, and we'll probably sustain at those levels.

Understood. The second one, if you could give us some flavor on how the on-trade and off-trade salience for your business looks like. How are these trending? And any specific initiatives you want to talk about? And separately, I'm curious to know the feedback on the 200 mL launch that you've done for Johnny Walker.

Johnny Walker.

So look, Latika, on on-trade, off-trade. Most of the salience, I think the important thing to look at on-trade is that's where our brands are built, okay? Once you understand that, then you realize the impact it has on consumers and how it builds occasions and how it builds frequency over a period of time. So I don't look at it in terms of salience. So this is -- I look at it in terms of how we invest there and be there, and the best of us need to be there so that it ensures our consumers to drive penetration and frequency. That's how I would look at it in a big way. The second question she asked?

Johnny Walker 200.

Johnny Walker 200, look, pocket pack is 180 ml has done magic, okay? What it does, why do we do a 180 ml or a 200 ml? Very, very importantly, it softens the pocket spend and allows for people to premiumize constantly and therefore sample our product. That's what it's done. And it's doing very, very well, not only for brandy, but we are starting to look at our across our portfolio, the 200 ml play.What it does, therefore, is constantly samples our products for consumer to, therefore, over a period of time become loyalists.

It's the core penetration SKU, Latika. In a country like India, it's a higher salience across categories. So we're just trying to play to that, in fact.

Our next question is from the line of Aditya Gupta with Partners.

First question on the thinking pattern and behavior of Gen Z, Obviously, there's a lot of talk about them drinking less, drinking better but drinking less. A, is there any way to track that in India? How are you guys monitoring that situation? And I mean, how are you looking at the whole thing in India?

Look, I've spoken about this consistently outside of this forum also. Look, Gen Zs I don't think are drinking less significantly, but they are drinking better very, very differently. And therefore, we are starting to see -- penetration used to be driven around our primary scotches, even for our India 3 consumers, that is looking very different today. They start consuming single malts. They start consuming wines at the premium space. They're looking at repertoire drinkage very, very aggressively. What we noticed also is that in the past, there was consistency of drinkage. What we are starting to notice today is there's a lot more binging. So they tend to take the same amount but they tend to drink in a fewer occasions at times. So there are different things which are playing out. It's playing out differently between scotch and wines. Cocktails are on a toll as we speak with Gen Zs. But overall, I don't see the significantly lower drinkage, but I see significantly premium consumption.

Okay. Is there any challenge to bottle availability also? Or is it only cost inflation headwind?

As of now, given that we also are looking at PET, and PET is a significant part of our overall portfolio now in terms of volumes, we are not seeing any significant concerns on bottle availability. Yes. In the short term, if you don't -- if you are not planful enough, we've had stock outages. But nothing serious. Nothing really of concern.

Our next question is from the line of Mehul Desai with JM Financial.

Most of my questions was answered. Just on the staff cost. I mean, the last 3 to 4 years, your staff cost has not seen a material increase. I mean FY '25 was 11%, FY '26 was 3% increase. How should one look at your staff cost going into FY '27/'28? That's the first question. And second bookkeeping question, was there any dividend income from RCB in F '26?

Okay. So let me take the second one, which I remember offhand . Yes, I think in Q3, there was roughly INR 100 crore, our dividend income from RCB to USL. So that was there. Look, on the first one, I mean, I said this earlier also, we do keep driving an ongoing continuous or effectiveness productivity intervention on an ongoing basis. That's part of our overall value chain productivity. So that's the only reason that some of the typical increase is not translating into the inflation numbers the way you are seeing it. But yes, that's the only reason. And if you look at our staff costs, it's pretty much been range bound over the last 3, 4 years. in that INR 150 crores to INR 160 crores per core kind of range. My only request is, as I've always maintained, don't look at a quarter number. Always look at our staff cost on our rolling 4 quarter basis. That will give you a reasonably good sense of the numbers.

Got it. That's helpful. And lastly, just a clarification. One, is the Karnataka policy actually gone into implementation? Or is it still being awaited for replies or consideration from all these stakeholders? And second is, when you say this 1.25% and 1.5% kind of gross margin impact, are you implementing from the 4Q gross margins or from the full year FY '26 margins?

Okay. So the second one is clearly a sequential basis from the fourth quarter. Now, obviously, there are many other business changes that keep happening. But by and large, I have given you a sequential impact from Jan, March to April quarter. And your first question, Karnataka policy is pretty much kind of implemented and rolled out about 2 weeks ago. So it's operational in the market. .

Our next question is from the line of Abhijeet Kundu with Antique Stockbroking.

That we got from [indiscernible] about McDowell's growth, muted growth was essentially, there were too many variants within McDowell's within that segment, in the end segment. So what was this right? My first question is that.

I don't think we've understood the question, no. McDowell's is...

I don't think it has too many variants. It's largely similar. There are a couple of states where we have one different variants. But it is one for McDowell's in every state. So I don't think there are too many variants.

But nothing at variance with the industry. By and large, it's the same number of variants. But any concern, there, I'm not getting the concern. That is not an issue at all.

Because what we read from the data, on the consumer side, say, there is just McDowell's #1, a single product. Whereas there is McDowell's manual #1 diet. So likewise, that was...

We haven't picked up anything like this. I believe we haven't picked up anything that's...

Nothing at all.

Nothing like this from the consumer, right? So no, there's something else.

Understood. And on Antiquity, and it was getting very close to the 1 million cases mark. So we spoke about Signature, and Signature has been going really well. So where do you see Antiquity in the overall scheme of things?

Look, it's a portfolio of brands we play, both in Upper Prestige and in BII, very, very clearly. Antiquity is core part of the portfolio and we will continue to drive growth. However, the lead brand is what we spoke about. And therefore, when I spoke about Signature or Black & White or the BII, just to say these are the lead brands. But yes, absolutely, it's important, and we will continue to invest and drive growth across our portfolio.

I mean just to add to what Praveen has said, Signature is the national brand. So therefore, big portion of that. Antiquity is a geography-specific brand, and it continues to do very well.

Understood. And the MML impact, has it conceded in the recent times, I mean, settling down the number of volumes. How do you see it?

I'm starting to see it average out and start settling down. And that's why I said sequentially, there's not going to be no further impact. We've seen the worst of it.

Understood. And this 1.6% impact on gross margin situation, are you in a position right now to absorb that through higher productivity?

I mean we'll have to see that. Productivity is an ongoing. We will have to see how our initiatives will keep coming and keep getting executed. Right now, I don't want to comment on that. But obviously, our effort would be to try and neutralize .But it's very difficult to kind of jack that up in the shorter term.

Ladies and gentlemen, we will now take one last question in the interest of time, which will be from the line of Ashutosh Jain of Barclays.

So one question was already answered so I'll just keep one for me. Could you just give some additional color on what will happen to scotch pricing after the U.K. India FTA deal is implemented? Your global CFO, Nick, suggested like high single-digit consumer price decrease. So is there any update to that or any modification you would answer? And how will it differ across your salience of BII and BIO portfolios?

Very much the same. Exactly. BIO, roughly, we are looking at a high single-digit reduction. The drive is to parse it down completely to the consumer. BII will be in the range 4 to 5. So exactly the same ranges. No change at all.

Thank you. I would now like to hand the conference over to...

Thank you. Thank you, everyone. Appreciate your time.

Yes. Thanks, everyone, for joining the call. If there are any questions, please reach out to me directly. Thank you. Have a good evening.

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