United Spirits Ltd, a part of Vijay Mallya-led UB Group, today posted a net profit of Rs 47.06 crore, down 62% from Rs 123 cr in the same period last year, due to an increase in raw material costs.
The company's results are not comparable with the corresponding period of the previous fiscal due to the merger of Balaji Distilleries Ltd with itself, it added.
Total income of the company stood at Rs 1,967.34 crore for the third quarter ended December 31.
It stood at Rs 1,969.40 crore in the corresponding period last fiscal.
"Sales in the quarter were affected by two major developments; one issue related to the orders for the company's products in Tamil Nadu that were hampered by a sustained campaign to promote the sales of local distilleries at the cost of recognised market leader brands of USL, resulting in the volume loss of over 1.5 million cases in the quarter," the company said.
The sharp rise in duties in Tamil Nadu was also an important factor, it added. "In markets other than TN and West Bengal, sales volumes grew by 10% during the quarter," USL said. Sales of the company's brands in the premium and prestige categories during the quarter under consideration grew by 7% to 6.95 million cases. Spirits costs were also up during the third quarter by 15%, translating into a Rs 21 increase per case, it added. The company has initiated steps to raise up to $225 million through issue of issue Foreign Currency Convertible Bonds (FCCBs). Its shareholders have approved raising up to $225 million through the issue of FCCBs, it added. In an earlier filing, the company said it intends to raise the amount to reduce its high cost debt and consequently improve both profits and EPS (Earnings Per Share).