New Delhi: Liquor major United Spirits Ltd (USL) on Saturday reported an over threefold jump in its standalone net profit at Rs147.70 crore for the third quarter on the back of lower finance costs and exceptional expense in the corresponding period last year.
The company had reported a net profit of Rs37.23 crore for the October-December period of the previous fiscal. Total income from operations grew 6.16% to Rs7,082.22 crore during the quarter under review as against Rs6,670.72 crore the same period a year ago, United Spirits said in a regulatory filing.
During the quarter, USL’s finance cost stood at Rs92.23 crore as against Rs107.66 crore earlier. The company had reported exceptional expense of Rs42.12 crore in the third quarter of fiscal 2015-16. “We have delivered a strong net sales growth of 6 per cent despite the subdued economic environment in the third quarter due to demonetisation... we have been able to manage through this period better than our initial expectations,” USL chief executive officer Anand Kripalu said.
This growth was underpinned by the firm’s continued focus on premiumisation and increased investments in its power brands, he added. “In line with our strategy to selectively participate in the popular segment we have entered into agreements to franchise selected popular brands in Andhra Pradesh, Puducherry, Goa, Andaman and Nicobar and Kerala effective from January.
“These changes were made to further improve our operating model and focus our business on the biggest growth opportunities. Continued focus on premiumisation, price increases in select states and productivity initiatives helped us to offset inflation and led to 152 basis points improvement in gross margin,” he said.
Kripalu said that the regulatory environment in certain states has led to challenges. “Tax and excise changes in Maharashtra, West Bengal and Telangana have led to sharp consumer price increases and the route to market changes in Punjab continues to impact performance.
“Although we expect the impact of demonetisation to abate as we move into the next quarter, the recent Supreme Court judgement on liquor outlets near highways remains a risk and adds some uncertainty for the future periods,” he said.