United Spirits Q2 PAT up 113% YoY to Rs 273 crore

United Spirits reported 112.9% rise in standalone net profit to Rs 273.4 crore in Q2 FY22 from Rs 128.4 crore in Q2 FY21.

Net sales increased by 14% YoY to Rs 2,446.8 in Q2 FY22, reflecting a strong quarter.

The company said that the off-trade gained momentum after the second wave of the COVID-19 pandemic; however, on-trade continues to gradually recover with the easing of restrictions.

Prestige & Above segment net sales grew 20.8%. Delivered high double digit Scotch whisky growth during the quarter.

Popular segment net sales remain flat compared to the same quarter of the previous year.

Gross margin was 44.2%, up 207 bps on reported basis and 190 bps on under-lying basis. Rising inflationary pressure on cost of goods sold (COGS) and a one-off tax provision was offset by improved mix management, continued focus on productivity and lapping the benefit of a one-off inventory provision in the prior year.

Reported EBITDA of Rs 426 crore, increased 57.9% and margins increased by 483 bps due to gross margin enhancement, lapping a one-off expense in the prior year and a net one-off tax reversal in the current quarter. Excluding the one-offs, underlying EBITDA was up 194 bps from 14.5% to 16.4%.

Advertising & Sales Promotion was 7.3% of sales and the investment behind brand building was back to normal levels after a COVID impacted muted Q1.

Interest includes one-off reversal benefit of non-debt interest related charge. Underlying interest expense was Rs 21 crore, down 59% as compared with prior year, driven primarily by debt and interest rate reduction.

Hina Nagarajan, CEO, said: We have delivered a strong quarter and the performance underpins improved momentum across the business. The business has emerged stronger from the pandemic and our people have responded with pace, agility, and creativity to seize the opportunities in the marketplace.

We are focused on sustaining the growth momentum while working on revenue management and productivity initiatives across the value chain to counter the rising inflation trend being experienced while exiting the quarter.

Our portfolio, with recent innovations and renovations, is well-positioned to capitalize on the rapidly growing premiumization in the category.

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

The scrip jumped 6.28% to end at Rs 885.50 on the BSE today.

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