United Spirits (UNSP) reported a disappointing set of numbers for the quarter, lower than consensus estimates on EBITDA and PAT fronts. Revenue (net of excise duty) grew by 10.5% yoy to Rs2,500.9cr (broadly in-line with estimates). Aided by lower costs (employee, advertisement and other expenses) as percent of net sales, EBITDA grew by 27.7% yoy to Rs347.8cr with an EBITDA margin of 13.9%, 188bps yoy expansion. However, EBITDA missed the estimates by 9%; EBITDA margin was expected at 15%. Other income for the quarter jumped significantly by 160.2% yoy to 61.4cr. Thus, PAT for the quarter stood at Rs192.4cr, 42.8% yoy growth (~13% lower than estimate).
Revenue growth was primarily aided by continued strong performance of the Prestige and Above (P&A) segment and benefit from lapping the impact of highway ban last year. After adjusting for the operating model changes, net sales increased 13%.
P&A segment’s revenue grew 15.5% yoy on a weak base (~68% revenue contribution) led by 12.1% yoy growth in volumes coupled with 3% yoy growth in realisation. In the Prestige segment, key brands like Signature and Royal Challenge grew faster than the category
However, the Popular segment reported 2.8% yoy decline in revenue; volume declined by 3.6% yoy and realisation was up 0.8% yoy. Adjusting for the operating model change, Popular segment’s revenue growth stood at 2% yoy.
Improved mix offset the raw material inflation and hence gross margin for the quarter was flat on yoy basis at 47.3%.
Marketing expense during the quarter broadly remained flat yoy at Rs267.1cr, 10.7% of net sales, down 80bps yoy. However, on qoq basis, it was up 33.2%.
Interest cost for the quarter stood at Rs55.2cr, down 16.1% yoy, driven by lower debt, improved debt-mix and lower interest rates.
Other income for the quarter jumped significantly by 62.2% yoy to Rs61.4% led by monetization of some of the non-core assets.
Company re-iterated its ambition of achieving double-digit revenue growth and improvement in margins to mid-high teens in the medium term.
United Spirits Ltd is currently trading at Rs. 581.25, down by 17.95 points or 3% from its previous closing of Rs. 599.20 on the BSE.
The scrip opened at Rs. 600.55 and has touched a high and low of Rs. 608 and Rs. 576 respectively. So far 23,62,789 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 50 DMA.
By clicking on submit button, you authorize IIFL & its representatives & agents to provide information about various products, offers and services provided by IIFL through any mode including telephone calls, SMS, letters etc. . you confirm that laws in relation to unsolicited communication referred in National Do Not Call Registry as laid down by Telecom Regulatory Authority of India will not be applicable for such information/ communication.