United Spirits Ltd (USL) on Wednesday posted an 11.16 per cent decline in net profit to ₹229.9 crore for Q3 FY21 on the back of lower on-premise footfalls and higher State taxes.

The liquor major said in a statement its total income grew 5.37 per cent to ₹8,245.4 crore for the same period. Sales in the prestige and above segment declined 0.8 per cent while that in the popular segment fell 6.7 per cent, led by a decline of 5.7 per cent in priority States. Increased consumer prices impacted demand in this price-conscious segment and an unfavourable State mix further contributed to the decline. The gross margin was 44.6 per cent, up 24 bps versus last year, driven by benign commodities and continued focus on productivity during the quarter.

The reported EBITDA was ₹384 crore, down 9.5 per cent, while the EBITDA margin was 15.4 per cent, down 100bps, primarily driven by lower fixed cost absorption and an increase in administrative expenses. The interest costs were ₹38 crore, down 17 per cent, driven by reduced debts and lower interest rates.

“The reported revenue decline of 3.6 per cent reflects improving consumer sentiment over previous quarters, notwithstanding on-premise footfalls still being low, the route to market change in Andhra Pradesh and taxation led price hikes post Covid-19. Operational resilience, contextual marketing with a focus on in-home occasions and renovation of our core brands supported the top-line recovery,” Anand Kripalu, USL’s CEO, said in the statement.

Despite a quicker rebound than originally expected, in the near term, there are still reasons to remain cautious and consequently, the company is not providing quantitative guidance for fiscal 2021, he added.

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