Liquor stocks trade lower; United Spirits down 9% post Q3 results

Radico Khaitan, Empee Distilleries, Jagatjit Industries, Globus Spirits, Som Distilleries, Associated Alcohols, Tilaknagar Industries and United Breweries were down 2% to 5% on BSE.

Shares of liquor companies were under pressure with United Spirits falling 9% on BSE in intra-day trade after reporting disappointing set of numbers for the quarter-ending December 2017 (Q3FY18).

Radico Khaitan, Empee Distilleries and Jagatjit Industries, also, dipped over 4%, while Globus Spirits, Som Distilleries & Breweries, Associated Alcohols & Breweries, Tilaknagar Industries and United Breweries were down in the range of 2% to 4% on BSE. On comparison, the S&P BSE Sensex was up 0.15% at 36,193 at 11:38 AM.

United Spirits slipped 9% to Rs 3,424 in intra-day deal after the net profit of the company down 9% at Rs 1,350 million in Q3FY18. The reported net sales declined 8% impacted by the one off impact of operating model changes.

“Underlying net sales declined 2%, as growth from lapping the impact of demonetization and pricing benefits were more than offset by the adverse impact of expected route to market changes in certain states and the highway ban,” United Spirits said in a press release.

EBITDA (earnings before interest, tax, depreciation and amortization) stood at Rs 2,720 million, down 8% primarily driven by increased marketing investment, up 27%. EBITDA margin at 12% remained flat, it added.

"Our net sales performance was adversely impacted in this quarter by the expected route to market changes in certain states, and to a lesser extent, by the residual effects of the highway ban. Impacted by the expected route to market changes, underlying net sales of the Prestige and Above segment declined 1%, and Popular segment by 2% in the third quarter,” said Anand Kripalu, CEO, United Spirits.

Looking ahead, while the adverse impact of the highway ban is behind us, we do expect to see continued impact of route to market changes in certain states in this financial year. Importantly, we now expect that the adverse impact of Goods and Services Tax (GST) will be more than offset by productivity savings and pricing, added Anand Kripalu.

COMPANY	LATEST	PREV CLOSE	LOSS(%)
UNITED SPIRITS	3464.00	3750.75	-7.7
RADICO KHAITAN	391.80	412.95	-5.1
JAGATJIT INDS.	116.55	122.20	-4.6
SOM DISTILLERIES	284.85	296.35	-3.9
ASSOC.ALCOHOLS	267.85	276.65	-3.2
GLOBUS SPIRITS	145.95	150.65	-3.1
TILAKNAGAR INDS.	19.00	19.60	-3.1
RAVIKUMAR DISTLL	18.30	18.85	-2.9
WINSOME BREW.	10.36	10.67	-2.9
UNITED BREWERIES	1128.55	1157.30	-2.5
EMPEE DISTILL.	55.30	56.70	-2.5
PICCADILY SUGAR	7.73	7.91	-2.3
G M BREWERIES	970.00	991.95	-2.2
PINCON SPIRIT	37.60	38.25	-1.7
PIONEER DISTIL.	202.00	204.75	-1.3