DIST reported an EPS of LKR 0.89 for 4Q FY25 against LKR 0.82 previously, supported by a 16% YoY increase in net revenue, resulting from excise duty hike linked price revisions. Elevated cost of sales (+25% YoY) and a sharp 66% YoY increase in operating expenses led to gross profit margin declining to 61% (from 64%) and EBIT margin to 50% (from 55%). Excise Department data revealed that while the beer segment grew ~4%YoY, the hard liquor market contracted by ~6% in 2024. With DIST leading the hard liquor market, sustained volume recovery is key to maintaining topline growth, while diversification into beer through DCSL breweries supports expansion. Looking ahead, we expect a gradual rebound in spirits volumes, supported by brand strength, pricing power, and favorable macro tailwinds, including tourism recovery and rising incomes in key consumption sectors. DIST’s consistent track record of dividends further enhances its investment appeal, with an expected forward payout ratio exceeding 90%. Reaffirming our constructive stance from the earlier initiation, we reiterate our BUY recommendation with a target price of LKR 53.00 (FY26E), implying an upside potential of 24% from the CMP.