United Spirits tops Nuvama’s FMCG picks; Abneesh Roy expects fresh highs ahead

Abneesh Roy, Executive Director of Nuvama Institutional Equities, has expressed a strong positive outlook for United Spirits, forecasting that the stock could achieve a new all-time high within the next year. He identified United Spirits as his top pick among recently announced quarterly results from fast-moving consumer goods (FMCG) companies, citing several fundamental drivers supporting his bullish thesis.Roy detailed four primary reasons for his optimism. First, strong performance in markets like Karnataka and Andhra Pradesh is effectively compensating for a decline in Maharashtra. Second, the company reported multi-quarter high gross margins and overall margins. Third, the cost outlook for key raw materials, specifically extra neutral alcohol (ENA) and glass, appears to be under control for the next twelve months.  Finally, a tax change in the United Kingdom set for 2026-27 (FY27) is expected to benefit the company.

He also pointed to the new managing director’s strong focus on ground-level execution and the potential for value unlocking from its Indian Premier League (IPL) franchise as additional positive factors. Based on this, he anticipates a strong recovery and a new peak for the stock in the coming year.

In contrast, Roy described other fast-moving consumer goods (FMCG) players as being more of a ‘fourth-quarter recovery story’. He stated that while Pidilite Industries is a ‘great compounding story’ with double-digit volume growth, it lacks significant valuation comfort.

For ITC, he expects a margin recovery in its cigarette business in the January-March quarter of 2026 (Q4FY26), driven by falling leaf tobacco prices, but highlighted that the upcoming taxation policy in December will be a critical factor to watch. He views the current 6% growth in cigarette volume as a good number.

Both Dabur India and Hindustan Unilever (HUL) are also seen as fourth-quarter recovery plays, as they are still dealing with the impact of goods and services tax (GST) transitions in October.

Regarding the broader alcoholic beverage space, Roy remains positive. He stated that while he does not formally cover Radico Khaitan, the entire sector is poised for growth. He listed four key reasons for this optimism: higher disposable income from GST cuts boosting discretionary spending, benign raw material costs, the upcoming UK tax benefit in FY27, and continued strong growth in the Andhra Pradesh market.

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He reiterated his preference for United Spirits, which his firm rates as a buy.

For the entire interview, watch the accompanying video

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