United Spirits jumped 9 per cent to Rs 629.70 on the BSE on Tuesday after the company announced robust numbers for the quarter which ended December 2019. On consolidated basis, United Spirits’ net profit rose 15.3 per cent to Rs 235.30 crore in Q3 FY20 as against net profit of Rs 202.99 in the year-ago quarter. The profit was led largely by a sharp growth in sales (8 per cent) of Prestige and Above portfolio.
Profit before tax (PBT) for Q3FY20 stood at Rs 314 crore, up by 8.2 per cent against Rs 290.30 crore in the year-ago quarter. Tax expenses declined 26.2 per cent to Rs 94.90 crore from Rs 128.60 crore in Q3FY19.
The company’s reported EBITDA for the quarter was Rs 424 crore, up 18 per cent YoY. Despite significant gross margin compression, EBITDA margin came in at 16.4 per cent, up 207 bps, primarily delivered through savings in operating costs and to a lesser extent by a lower marketing reinvestment rate. Interest costs were Rs 46 crore, 21 per cent lower than in the corresponding quarter last year.
“We are particularly encouraged to see some momentum in our Prestige and Above portfolio, a sharp improvement from the previous quarter, when the segment hadn’t grown, in part due to our internal operational challenges. Additionally, during the quarter, we saw a return of premiumisation trend, with each sub-segment growing faster than the one beneath it,” said Anand Kripalu, CEO, United Spirits.
“We are optimistic that the economy will gradually recover, and with that the business should bounce back more strongly. We remain committed to our medium-term ambition of growing the top line by double digits and to improve EBITDA margin to mid-high teens” he said.At 11:16, the stock was trading 8.5 per cent higher at Rs 624.75 as compared to a flat S&P BSE Sensex. Around 85 lakh shares have changed hands on the NSE and BSE so far.
Source: Maalaimalar
