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Informist, Tuesday, Jul 23, 2024

--United Spirits Apr-Jun revenue 58.29 bln rupees vs 53.13 bln

--United Spirits Apr-Jun net profit 2.99 bln rupees vs 2.38 bln

--Analysts saw United Spirits Apr-Jun net profit 3.05 bln rupees

--United Spirits Apr-Jun net profit 2.99 bln rupees

By Avishek Rakshit

KOLKATA – An improvement in sales of premium liquor and increased sales volume led alcoholic beverages major United Spirits Ltd to report over 25% year-on-year growth in net profit for Apr-Jun to nearly 3 bln rupees. The company, however, missed the Street’s projections of a net profit of 3.1 bln rupees.

The company's revenue from operations grew 9.7% on year to 58.3 bln rupees. This figure, however, includes excise duty which goes into the government's coffers. Discounting the excise duty outgo, the revenue of United Spirits, or the net sales value as the company calls it, increased 8.3% on year to 23.5 bln rupees, 500 mln rupees lower than the average of estimates by sector analysts.

In a statement, United Spirits said the revenue growth was driven by improvement in its distribution network, innovative products, and some revenue growth management interventions. The premium portfolio, which accounts for 88% of the company's revenues, grew 10% on year, but net sales of the mass category products fell 2.4% year-on-year. The company reasoned that the fall in revenue from the mass category was on account of the raging inflation at the macroeconomic level, which hurts the price-sensitive consumers in the budget products category.

Nevertheless, total sales volume grew 3.5% on year to 13.7 mln cases, more or less in line with the projections from some sector analysts.

The company's earnings before interest, tax, depreciation and amortisation, at 4.6 bln rupees, beat the Street’s view of 4 bln rupees, growing nearly 19% on year. Its EBITDA margin was 19.5%, up 174 basis points from a year ago. Excluding the one-offs in the year-ago period, EBITDA margin expanded 234 bps, the company said. This was largely driven by gross margin expansion, which was partly off-set by higher spending on advertising and promotions and fixed cost operating leverage.

“Looking ahead, we remain focused on enhancing the long-term competitiveness of our portfolio, and to sustainably deliver in a soft demand environment and harness every opportunity to create long-term value for all our stakeholders,” a statement issued by the company quoted Hina Nagarajan, chief executive officer and managing director, as saying.

In a filing with the stock exchanges, United Spirits said its board today approved investments in two companies--V9 Beverages Pvt Ltd and Indie Brews and Spirits Pvt Ltd--to further its portfolio line-up.

In V9 Beverages, United Spirits is set to subscribe to 1,972 compulsory convertible preference shares and 10 equity shares, which is equivalent to 15% of the paid-up share capital, for an aggregate consideration of 22.9 mln rupees. In Indie Brews and Spirits, United Spirits will subscribe to 4,016 compulsory convertible preference shares and 10 equity shares, which is equivalent to 25% of its issued and paid-up share capital for an aggregate consideration of 50 mln rupees.

The company declared its financial results after trading hours. Shares of United Spirits closed 1.8% up at 1,332.0 rupees on the National Stock Exchange.  End

Edited by Rajeev Pai

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