United Spirits Q3 profit up 27% to Rs 291 cr; net sales up 7.6%

Diageo-controlled liquor maker United Spirits Ltd on Tuesday reported a 26.62 per cent increase in consolidated net profit at Rs 291.1 crore for the third quarter ended December 2021.

The company had posted a net profit of Rs 229.9 crore in the October-December period a year ago, United Spirits Ltd (USL) said in a regulatory filing.

Its revenue from operations rose 7.64 per cent to Rs 8,854.5 crore, as against Rs 8,226 crore in the corresponding period of the previous fiscal.

Diageo India CEO Hina Nagarajan said, "We have delivered a strong quarter, continuing the growth momentum amidst rising inflation. The broad-based growth in the Prestige & Above segment demonstrates the strength of our portfolio and the continued agility and resilience of the team."

USL's net sales of 'Prestige & Above' segment increased 20 per cent with strong double-digit growth in its scotch portfolio.

However, its 'Popular segment' net sales declined 1.7 per cent, while priority states were flat.

"Gross margin was 44.1per cent, down 49 bps on a reported basis, driven by input cost inflation, partially offset by favourable product mix and productivity savings. Adjusting the one-off sale of bulk scotch, underlying gross margin was 44.3 per cent, down 31 bps," USL said in a post-earnings statement.

Total expenses were at Rs 8,463.8 crore, up 6.58 per cent from Rs 7,941.3 crore.

"Healthy operating cash flow has enabled us to reach the debt-free status as on December 31, 2021," she added.

Crisil has upgraded its rating on USL's long-term bank facilities to 'AAA / Stable' while reaffirming its 'A1+' rating on the short-term bank facilities, Nagarajan added.

On the outlook, she said, "External operating environment in the near-term will remain challenging, including the potential impact from Covid-19 and rising cost inflation."

"We continue to work with agility and remain focused on strengthening our portfolio while driving productivity across the value chain. We remain confident in the market potential and continue to stay focused on our strategic priorities to drive long-term value creation for all our stakeholders," Nagarajan added.

Shares of United Spirits Ltd on Tuesday settled at Rs 876.05 on BSE, up 2.73 per cent from the previous close.