ICRA reaffirms USL's credit ratings

ICRA has reaffirmed its rating on United Spirits (USL)'s long term/short term fund based/non-fund based facility worth Rs 3,425 crore at '[ICRA]AA+ (Stable) /[ICRA]A1+'.

ICRA has also reaffirmed the ratings of the company's commercial paper worth Rs 500 crore at '[ICRA]A1+'.

The credit ratings agency said that the ratings continue to factor in USL's strong operational and financial flexibility and robust corporate governance and compliance practices by virtue of being a 55.94% subsidiary of Diageo Plc (Diageo; rated A3 / Stable by Moody's).

USL continues to benefit from the business synergies through implementation of Diageo's global best practices across business functions which has complemented its large scale of operations.

The ratings also consider USL's strong market position in the domestic spirits industry supported by its large distribution network, wide product portfolio and presence across price points, flavours and segments.

USL manufactures and distributes a variety of alcohols and spirits, including whiskey, brandy and rum. The company also manufactures Indian-made foreign liquor brands.

The liquor maker's consolidated net profit jumped 20.8% to Rs 280.30 crore on 3.3% fall in net sales to Rs 2,673 crore in Q3 December 2020 over Q3 December 2019.

The scrip fell 1.84% to Rs 534.50 on Friday.

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