United Spirits Ltd. Reports 17.7% Increase In Net Sales For Q2
United Spirits Ltd. reported its second quarter results on Friday. The firm’s net sales increased 17.7 per cent, reflecting a strong quarter.
The growth reflects resilient consumer demand in off-trade, rebounding in on-trade and continued mix improvement. The prestige & above segment net sales saw a surge of 23.1 per cent, benefitting from momentum of innovation and renovation done in prior quarters. The firm’s growth was broad-based and reflects the depth of its portfolio and the strength of its brands, the company stated in its regulatory filing.
The popular segment net sales grew 1.7 per cent within which the priority states grew 3.8 per cent. The gross margin recorded was 39.5 per cent, primarily reflecting the adverse impact of double-digit inflation in COGS. “Our marketing reinvestment rate during the quarter was 5.5 per cent of net sales. The Reported EBITDA was Rs. 446 crores, up 4.8 per cent and EBITDA margin was 15.5 per cent. Underlying EBITDA excluding one-offs in prior year was up 11 per cent,” the firm stated in its filing.
“The external environment remained challenging during the quarter with ongoing scotch pricing negotiations in select states, route to market change in Delhi and unprecedented levels of input cost inflation. We maintained cost discipline while investing in long-term priorities. Looking ahead, in the shorter term, we expect inflation challenges to continue. Scotch price discussions have successfully concluded in a few states. We are focused on maintaining the momentum while driving revenue growth management initiatives and ramping up productivity across the value chain,” stated Hina Nagarajan, CEO, United Spirits Ltd.
The firm’s PAT reported, after incorporating the exceptional gain accruing from the slump sale transaction was Rs. 563 crores, up 105.9 per cent. The net sales during the quarter included Rs. 351 crores from brands that are part of slump sale and franchise arrangement transaction closed with Inbrew Beverages Pvt. Ltd. The net sales for this portfolio increased 2.9 per cent during the quarter and were 697 crores for the first half, up 9.1 per cent as compared the previous year.
