Earnings Review
Advertising, other expenses drag United Spirit's Q1 PAT 14%
This story was originally published at 21:11 IST on 13 August 2025
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--United Spirits Apr-Jun net profit INR 2.58 bln
--Analysts saw United Spirits Apr-Jun net profit INR 2.90 bln
--United Spirits Apr-Jun net profit INR 2.58 bln vs INR 2.99 bln year ago
--United Spirits Apr-Jun revenue INR 58.23 bln vs INR 58.29 bln year ago
--United Spirits Apr-Jun EBITDA INR 4.15 bln vs INR 4.58 bln year ago
--United Spirits Apr-Jun EBITDA margin 16.3% vs 19.5% year ago
--United Spirits Apr-Jun gross profit margin 44.0% vs 44.5% year ago
--United Spirits Apr-Jun sales volume 14.98 mln cases vs 13.70 mln year ago
--United Spirits Apr-Jun sales volume rises 9.4% on year
--United Spirits Q1 prestige & above ops sales volume 12.57 mln cases
--United Spirits Apr-Jun prestige & above ops sales volume up 9% on year
--United Spirits Q1 popular sales volume 2.41 mln cases, up 11.6% on year
--United Spirits Q1 prestige & above segment net sales value INR 22.51 bln
--United Spirits Q1 prestige & above segment net sales value up 9% on year
--United Spirits Q1 popular ops net sales value INR 2.5 bln, up 13.6% on yr
--United Spirits Apr-Jun net sales value INR 25.49 bln, up 8.4% on year
By Avishek Rakshit
KOLKATA – A sharp increase in advertising and other expenses, compensation to Royal Challengers Bengaluru fans after a stampede in Bengaluru following the victory in the Indian Premier League final match, and employee severance expenses led United Spirits Ltd. to report a 13.7?cline in its net profit for the June quarter at INR 2.6 billion, lower than the Street's projection of INR 2.9 billion.
Despite higher sales volume, the net sales value, which is a true reflection of the company's top line as it discounts taxes and other expenses, rose 8.4% on year to INR 25.5 billion as against the Street's expectation of INR 24.9 billion. The revenue from operations, which includes taxes and other regulatory items, remained flat at INR 58.2 billion.
The company's net sales in the June quarter were largely driven by the alcoholic beverage company's re-entry in Andhra Pradesh under the new liquor policy backed by new renovated products and some management interventions at the company level.
In a statement, United Spirits said that excluding the top-line growth benefits which the company reaped from Andhra Pradesh, sales were impacted on account of a high base owing to the proactive actions taken to mitigate potential supply chain disruption in view of the Lok Sabha elections in 2024.
During the quarter under review, United Spirits sales volume rose 9.4% on year to nearly 15 million cases. However, it was largely on account of the rise in mass products which outpaced the volume growth in the premium and luxury segment.
Sales volume of popular products, which are priced lower rose by 11.6% on year to 2.4 million cases and the sales volume of prestige and above products--the premium and luxury segment--rose 9% on year to 12.6 million cases.
The net sales value from the mass products outpaced the growth in the premium and luxury segment as well. The net sales value from the mass segment grew 13.6% on year to INR 2.5 billion and the revenue from the premium products grew 9% on year to INR 22.5 billion. Thus, sales volume growth did not benefit the company's overall revenue at the pre-tax level.
At the same time, the company continued to spend on brand promotion and marketing aggressively. Expenses arising from advertising and promotions rose a sharp 36% on year to INR 2.4 billion and other expenses increased 18.6% on year to INR 3.3 billion in the June quarter. Input costs rose as well by 8.9% on year to INR 11.9 billion, pushing up the total expenses in the June quarter 13.6% on year to INR 22.5 billion.
Moreover, the company spent another INR 110 million under exceptional item, which dragged down the profit. Around INR 80 million was offered as employee severance costs and INR-30-million financial assistance was provided to the next of the kin of deceased fans of Royal Challengers Bengaluru, following the stampede in Bengaluru which happened during the celebrations of victory in the final match of the Indian Premier League T20. Through its subsidiary Royal Challengers Sports Pvt. Ltd., the Indian entity of global alcoholic beverage maker Diageo Plc. owns the IPL T20 cricket team.
As a result, United Spirits' earnings before interest, tax, depreciation, and amortisation declined 9.4% on year to INR 4.2 billion and the EBITDA margin, impacted by the product mix as well, declined to 16.3% in the June quarter as against 19.5% in the year-ago quarter. The gross profit margin declined to 44% in Apr-Jun as against 44.5% in the year-ago period.
On Wednesday, shares of United Spirits closed 0.7% higher at INR 1,306.20 on the National Stock Exchange. The company declared its June quarter results after trading hours. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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