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Informist, Tuesday, May 20, 2025

By Anand JC

MUMBAI – McDowell's seller United Spirits Ltd. reported a robust double-digit increase in its net profit for the March quarter, much higher than consensus estimates. Higher gross profit helped its earnings before interest, taxes, depreciation, and amortisation register a 40% on-year growth. Increase in its top line was buoyed by higher sales volumes, total income growth was restricted by lack of dividend from its cricket franchise Royal Challengers Bengaluru.

United Spirits's net profit for the reporting quarter grew just over 17% on year to INR 4.5 billion. Analysts had forecast a profit of INR 3.2 billion. Its revenue from operations for the period was INR 65.5 billiom, 2.4% higher on year, but down 15% sequentially.

Excise duties, which form nearly 59% of United Spirits' overall expenses, fell 3.4% on year in the March quarter to INR 36 billion. Excluding excise duty, the company earned a revenue of INR 29.5 billion, just about higher than consensus estimates of INR 29.3 billion.

The growth in its top line was driven by the 7% on-year increase in its volume sales to 16.7 million cases. Other income earned by the company during the March quarter was INR 1.7 billion, down 26%. United Spirits records the dividend it earns from its cricket team of the Indian Premier League in its other income, which excludes its core business of sale of alcoholic beverages.

United Spirits disclosed an EBITDA of INR 5.1 billion for the March quarter, driven by growth in gross profit and increased productivity across the value chain. The company's gross profit grew 13% on year to INR 13.1 billion. "The expansion is led by headline pricing realisation flow-through, ongoing revenue growth management and cogs (cost of goods sold) productivity initiatives, stable commodity basket partially offset by ENA (extra neutral alcohol) inflation," the company said in a press release. 

The company reported an EBITDA margin of 17.1% for the reporting quarter, registering an expansion of 358 basis points on year. Its gross margin grew to 44.5% from 43.3% in the year-ago quarter.

United Spirits reported a net sales value of INR 29.5 billion, up nearly 11% on year, alongside a 12% growth in its underlying net sales value of INR 29.8 billion. It has attributed this growth to portfolio resilience and a favourable base as operations in Andhra Pradesh had commenced in September last year after a gap of five years.

"The challenging demand environment notwithstanding, we have delivered 13.2% NSV growth for P&A (Prestige and above) in Q4FY25 and 9.9% P&A growth for FY25, and a leveraged EBITDA growth that takes us to our medium-term guidance," its Chief Executive Officer and Managing Editor Praveen Someshwar said in a press release. United Spirits, which is India's biggest alcoholic beverage company, manufactures Indian-made foreign liquor at various price points under product segments termed 'Popular' and 'Prestige and above.'

For the March quarter, the company sold 13.6 million cases of liquor under Prestige and Above segment, 9% higher on year. Sales of liquor under Popular segment fell 2.2% on year to 3.1 million cases. While the former accounted for 87.7% of United Spirits' net underlying sales for the March quarter, the latter accounted for 10.5%. Net sales value of Prestige and Above grew 13.2% in the latest quarter, much higher than the 1.1% growth seen in the Popular segment.

EXPENDITURE PORTFOLIO

Cost of materials consumed by United Spirits increased 3% on year to INR 14 billion for the reporting quarter. Purchase of stock-in-trade increased 19% on year to INR 1.9 billion. Advertisement and sales promotion expenses fell nearly 3% on year to INR 3.2 billion while other expenses grew 5.4% to INR 3.5 billion. 

The company paid INR 220 million towards interest costs for the March quarter, 24% lower on year. This expense was on account of customary non-debt related items, the company said. 

FY25 FINANCIALS

For 2024-25 (Apr-Mar), the company registered a net profit of INR 15.6 billion, 19% higher than the previous financial year. Its revenue from operations was INR 267.8 billion, up 5.5% from FY24. The company sold 63.9 million cases of liquor in FY25, higher than 61.4 million sold in FY24. The company recorded a one-time loss of INR 650 million in FY25 on account costs incurred on account of its ongoing multi-year supply agility programme.

United Spirits' board recommended payment of INR 8 as final dividend for FY25. The record date for the payment is Aug. 1. Post approval of shareholders at the Annual General Meeting on Aug. 29, potential final dividend will be paid on or after Sept. 4.

The company disclosed its results after markets closed. Tuesday, its shares closed at INR 1,556.60 on the National Stock Exchange, largely unchanged from previous close.  End

Edited by Akul Nishant Akhoury

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