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United Spirits’ net profit more than doubled during the second quarter of the current fiscal on gradual on-trade recovery and higher sales of Prestige and Above segments.
The net profit rose 113 per cent to ₹27.34 crore on the back of a 9 per cent increase in total income to ₹8,151.50 crore on a standalone basis . The PAT margin was 11.2 per cent.
USL’s CEO Hina Nagarajan, in a statement said: “We have delivered a strong quarter and the performance underpins improved momentum across the business. The business has emerged stronger from the pandemic.” She said the company is focussing on sustaining the growth momentum while working on revenue management and productivity initiatives across the value chain to counter the rising inflation trend.
The country’s largest liquor maker said off-trade gained momentum after the second wave of the Covid-19 pandemic while on-trade continues to gradually recover with the easing of restrictions. Net sales of Prestige & Above segments grew 20.8 per cent while there was a high double-digit growth in the Scotch whisky segment during the quarter. The Popular segment net sales remained flat compared to the same quarter of the previous year.
The gross margin was 44.2 per cent, up 207 bps on reported basis and 190 bps on an under-lying basis. Rising inflationary pressure on COGS (cost of goods sold) and a one-off tax provision were offset by improved mix management, continued focus on productivity and lapping the benefit of a one-off inventory provision in the previous year.
The underlying interest expense was ₹21 crore, down 59 per cent, driven primarily by debt and interest rate reduction.
The cash closed at ₹29 crore for the first half of the year. About 44 per cent of profit was invested in working capital to support strong business delivery and 22 per cent was converted into free cash flow for the repayment of debt and interest. Capex primarily focused on asset care, productivity, support core growth and health and safety.
The closing net debt was at ₹443 crore. The company repaid its short-term borrowings amounting to ₹113 crore during the first half of the year. The reduction in debt, together with a favourable mix, helped reduce total interest costs by 41 per cent.
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