Diageo India, operating through United Spirits, raised its advertising and promotion spends by 57% year-on-year to Rs 378 crore in Q2 FY27, up Rs 137 crore from Rs 241 crore a year earlier. Marketing now accounts for 11.6% of net sales value, compared with 7.6% in the same quarter last year. The company called it a deliberate investment ahead of the festive season.
The heavier spending left its mark on profitability. Net sales value rose 2.8% to Rs 3,258 crore, but EBITDA slipped 4.3% to Rs 643 crore, with the margin contracting by 146 basis points to 19.7%. Gross margin improved by 88 basis points to 48%, yet the additional A&P outlay was the biggest drag on operating profit, only partly cushioned by Rs 70 crore in extra gross profit and savings on staff costs and overheads.
CEO and Managing Director Praveen Someshwar said the company delivered a resilient quarter despite a strong prior-year base and regulatory headwinds, while continuing to back its brands. He pointed to the J&B Scotch relaunch, enabled by the India-UK FTA, and the entry into ready-to-drink with Smirnoff Ice as new growth avenues.
The Prestige & Above portfolio grew 6.3% to Rs 3,065 crore, making up 94.1% of net sales value. Smirnoff’s local flavour innovations, the J&B relaunch and luxury brands drove growth, offset partly by Maharashtra regulations. For H1 FY27, A&P spends rose 44% to Rs 690 crore, with net sales value up 4.2% to Rs 5,961 crore.
