United Spirits board okays sale of select liquor brands, reshape portfolio

Diageo-controlled liquor maker United Spirits (USL) on Friday said it had completed the “strategic review” of its select popular liquor brands, and has decided to sell and franchise this portfolio to a third party.

“We have just concluded the strategic review of the select popular brands and the board has approved the sale and franchising of this portfolio to an unrelated third party. This is a significant move to enable sharpened focus on ‘Prestige and Above’ and reshape our portfolio to help deliver our growth mission,” USL’s Chief Executive Officer Hina Nagarajan said.

USL’s popular portfolio comprises around 30 entry-level lower-priced liquor brands, with an average price less than Rs 400 for a 750 ml bottle, and straddle whisky, rum, brandy, vodka and gin.

Net profit declines

The company reported a 12.14 per cent decline in consolidated net profit at Rs 178.6 crore for the fourth quarter ended March 31, as margins were impacted by rising inflation.

The company had posted a net profit of ~203.3 crore in the year-ago period, according to a regulatory filing.

However, its revenue from operations was up 1.16 per cent at Rs 7,767.3 crore during the quarter under review. In the same period a year ago, it stood at Rs 7,678.1 crore.

“Gross margin was 41.7 per cent, down 220 bps (basis points), impacted by rising inflation partly offset by favourable product mix and productivity savings,” USL said in an earnings statement.

Total expenses were at Rs 7,429.4 crore in the latest March quarter compared to Rs 7,392.2 crore in the same period a year ago.