Diageo India, which operates as United Spirits Limited, sharply increased advertising and sales promotion expenditure in the September quarter, signalling an aggressive festive-season push behind its brands.
Marketing investment climbs 57%
The company spent ₹378 crore on advertising and sales promotion in Q2 FY27, up from ₹241 crore in the same quarter last year. That lifted marketing spend to 11.6% of net sales value, from 7.6% a year earlier.
The higher outlay came against modest top-line growth. Diageo India reported net sales value of ₹3,258 crore, up 2.8% year-on-year. Profit after tax slipped 2.1% to ₹462 crore, while EBITDA declined 4.3% to ₹643 crore. The company attributed part of the pressure to its proactive advertising investments ahead of the festive period; EBITDA margin contracted to 19.7% from 21.2%.
Premium portfolio carries the quarter
The Prestige and Above segment remained the growth engine. Its net sales value rose 6.3% to ₹3,065 crore and accounted for 94.1% of total net sales value, up 3.1 percentage points year-on-year. Diageo India credited local-flavour innovation in Smirnoff, the relaunch of J&B Scotch and growth in its luxury portfolio.
The popular segment moved the other way: net sales value fell 22.7% on a like-for-like basis to ₹181 crore, with state-level regulatory changes in Maharashtra and Karnataka weighing on realisations.
First-half spend shows the pattern
The investment pattern is broader than one quarter. In the first half of FY27, Diageo India spent ₹690 crore on marketing, up about 44% from ₹479 crore a year earlier. Marketing spend reached 11.6% of net sales value for the half, while EBITDA margin eased to 18% from 19%.
What marketers should watch
For marketing leaders, this is a live example of the brand-investment trade-off: spend ahead of demand and accept near-term margin pressure for longer-term brand strength.
- Spend ratio matters: marketing as a share of net sales rose from 7.6% to 11.6% in a single quarter.
- Premium mix is doing the work: Prestige and Above now drives nearly all net sales value, so effective spend must defend premium share.
- Policy risk is real: excise changes in Maharashtra and Karnataka are creating headwinds that marketing cannot fully offset.
Managing director and chief executive Praveen Someshwar described the quarter as resilient despite a strong prior-year base and regulatory headwinds, while the company continued investing behind its brands for long-term growth. Diageo India also entered the ready-to-drink segment with Smirnoff Ice, alongside the J&B Scotch relaunch.
Source: Storyboard18
