United Spirits slipped 4.55% to Rs 779.80 after the spirits maker's standalone net profit tumbled 64.45% to Rs 110.5 crore in Q3 FY23 as against Rs 310.8 crore posted in Q3 FY22.
Net sales rose 3.56% to Rs 2,781.1 crore in the quarter ended 31 December 2022 from Rs 2,880 crore recorded in the same period a year ago.Rebased net sales value (NSV) increased 9.7% & underlying NSV grew 11.5% (excluding the one-off bulk scotch sale impact from prior year comparator) reflecting another good quarter driven by off-trade momentum & continued recovery of the on-trade.
Prestige & Above segment net sales grew grew 11.7% with strong double-digit growth in the scotch portfolio. Rebased net sales for popular segment grew 2.3%.
Profit before exceptional items and tax declined 19.79% to Rs 303.1 crore in Q3 FY23 from Rs 377.9 crore in Q3 FY22.
Exceptional items primarily comprise of an impairment charge of Rs 2.4 crore and a provision of Rs 148.7 crore under exceptional items, towards the impairment loss on property, plant and equipment, primarily on account of the supply agility program.
EBITDA de-grew to Rs 368 crore in Q3 FY23, sliding 12.38% year on year and EBITDA margin stood at 13.2%, down 332 basis points (bps); primarily driven by inflation led gross margin contraction partly off-set by targeted A&P calibration.
Gross margin at 40.6%, down 438 bps YoY, driven by input cost inflation both for Glass & ENA partly offset by superior mix and productivity.
Commenting on the results, Hina Nagarajan, managing director & chief executive officer (CEO) of United Spirits said, We delivered a good quarter in an extremely volatile environment carefully navigating through Route to market changes & input commodity cost inflation. This is the first quarter post the slump sale and franchising of the strategically reviewed popular portfolio. During the quarter, we have completed the merger of Pioneer Distilleries to progress towards a simplified legal entity footprint.
The board of directors have approved a multi-year supply chain agility programme. The programme is expected to strengthen our end-to-end supply chain thereby making it fit for the future. This is in addition to our everyday efficiency savings as we continue to build a more agile and sustainable business," she added. Nagarajan further stated, Looking ahead, in the shorter term, we do expect inflationary headwinds to continue. However, we remain optimistic about the medium to longer term business prospects & our ability to harness growth opportunities with sharpened focus and our reshaped portfolio. We remain confident in our strategy to create an organization of the future and thereby deliver value to all our stakeholders in a sustainable and consistent manner.
United Spirits is the country's leading beverage alcohol company and a subsidiary of global leader Diageo plc. The company manufactures, sells and distributes a portfolio of premium brands.
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