United Spirits recorded a 26.6% increase in standalone net profit to Rs 291.1 crore on a 15.9% increase in net sales to Rs 2,884.7 crore in Q3 FY22 compared to Q3 FY21.
The company said the sales growth reflected a strong quarter driven by resilient consumer demand in the off-trade channel, continued premiumization and recovery in the on-trade channel. Underlying sales increased by 14.3%, excluding one-time bulk scotch sales.
Prestige & Above segment net sales increased 20%, with strong double-digit growth in the scotch portfolio. Net sales in the popular segment fell 1.7%, while priority states were flat.
Gross margin was 44.1%, down 49 basis points as reported, due to input cost inflation, partially offset by a favorable product mix and productivity gains. Adjusting for the one-time bulk scotch sale, underlying gross margin was 44.3%, down 31 basis points.
Reported EBITDA was Rs 491 crore, up 27.9%. Reported EBITDA margin was 17.0%, up 159 basis points, mainly due to operating leverage on fixed costs. The company has increased its investments in marketing to support strategic priorities and ongoing demand growth initiatives.
Interest includes a one-time charge unrelated to debt. Underlying interest was Rs 16 crore, down 56.8% due to debt reduction and lower interest rates.
Hina Nagarajan, CEO, said: We had a strong quarter, continuing the growth momentum amid rising inflation. The widespread growth of the Prestige & Above segment demonstrates the strength of our portfolio.
Healthy operating cash flow enabled us to achieve debt-free status as of December 31, 2021. CRISIL raised its rating on United Spirits Limited’s long-term bank lines to ‘AAA / Stable’ while reaffirming its rating ‘A1+’ on short-term bank facilities.
The near-term external operating environment will remain challenging, including the potential impact of COVID-19 and rising cost inflation.
United Spirits manufactures and distributes a variety of liquors and spirits, including whisky, brandy and rum. The company also manufactures foreign liquor brands made in India.
The certificate fell 1.70% to currently trade at Rs 861.15 on BSE.
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