What happened? USL, Diageo''s majority owned India subsidiary, has issued a preliminary fiscal Q126 (June-Q) sales update ahead of the release of Diageo group results tomorrow morning. BNPP Exane View: USL (Diageo India) cal. Q2 LFL sales grew +8.4% in the June-25 quarter. This implies growth of c.+10% in Diageo''s fiscal H225 (ending June) which compares with our own Diageo India H225 LFL sales growth est. of +9.2%. We note that growth in the quarter was led by the lower end Popular brand (+13.6% sales growth). USL comments on the quarter lapping a high comp base that involved proactive actions to mitigate potential supply chain disruption in view of the Union Elections. While the demand environment remains muted, USL has been able to sustain its growth momentum. There is no profit colour provided in the preliminary update. Overall, we view the update from USL as neutral from a Diageo perspective. Summary of key figures (by USL fiscal quarter) / Profitability: No profit colour provided with the preliminary update. Context We estimate that USL (Diageo India) accounted for c.6% of Diageo''s FY24 sales.