United Spirits slips after weak Q4 performance

United Spirits fell 1.90% to Rs 566.85 after the company reported 52.5% decline in consolidated net profit to Rs 58.40 crore on 14.1% fall in net sales to Rs 1990.50 crore in Q4 March 2020 over Q4 March 2019.

Consolidated profit before tax (PBT) stood at Rs 183.50 crore in Q4 FY20, up by 5.6% from Rs 173.70 crore in Q4 FY19. Revenue declined primarily due to COVID-19 led disruption in India in March, which exacerbated the impact of the ongoing consumption slowdown. Employee expense declined 36.91% to Rs 109.40 crore during the quarter.

On the volume front, the alcoholic beverages manufacturer's prestige & above segment witnessed 19.6% fall in volumes as it stood at 8.4 EUm while the popular segment's volumes contracted by 7.5% to 9.9 EUm in Q4 FY20 over Q4 FY19.

Anand Kripalu, CEO, United Spirits, said: "The business was severely impacted in the fourth quarter due to disruption caused by the outbreak of coronavirus in India. We saw a sharp deceleration in our Prestige and Above portfolio from the previous quarter, as the segment was disproportionately impacted by the closure of on-premise channel in several states much before the nationwide lockdown went into effect. Within the segment, our Bottled in Origin (BIO) Scotch portfolio was the hardest hit. Although the rollout of the renovated McDowell's No. 1 Whisky brand was interrupted, we are encouraged by the initial consumer response in places where it was completed. During this fiscal, we experienced substantial inflation in our key raw material costs. While the outlook for next year remains uncertain, I am confident in the resilience of our category and our agility and ability to adapt in this difficult environment."

The liquor maker's consolidated net profit fell 5.9% to Rs 658.90 crore as net sales remained almost flat at Rs 9325.40 crore in the year ended March 2020 (FY20) over the year ended March 2019 (FY19). PBT stood at Rs 1160.30 crore in FY20, up by 14.7% from Rs 1011.70 crore in FY19.

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.

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