USL’s Q1 profit jumps 29% to ₹81.3 crore
Diageo Plc-run USL’s standalone net profit rose to ₹81.3 crore from ₹62.9 crore from a year ago
Bengaluru: India’s largest liquor company United Spirits Ltd (USL) reported a 29% rise in fiscal-first quarter profit, boosted by higher sales of its premium brands and aided to some extent by a lower base in the year-ago period.
Last year, alcohol sales across the country were hit during the June quarter as a Supreme Court ban on liquor sales near highways led to the closure of many outlets. Diageo Plc-run USL’s standalone net profit rose to ₹81.3 crore from ₹62.9 crore from a year ago. Revenue grew 10% to ₹6,436.6 crore.
“Our performance has continued to improve in the first quarter as the operating environment has become more stable. During the quarter, overall net sales growth excluding the impact of operating model changes was 14%, benefiting from lapping the impact of highway ban last year, while also driven by improved performance of the ‘prestige and above’ segment,” USL’s chief executive officer Anand Kripalu said in an exchange filing on Monday.
Net sales from the firms ‘prestige and above’ segment, or premium brands, grew 19% from a year earlier. This segment’s performance was supported by strong growth in USL’s Scotch whisky portfolio led by momentum from Johnnie Walker, Black & White and Black Dog.
Brands that the company has either repackaged or re-launched in the prestige and above segment, like Signature and Royal Challenge whiskies, also continued to deliver strong growth. Sales contribution from the prestige and above division stood at 65% of net sales during the quarter.
But sales at USL’s popular business division, which includes brands like Bagpiper’s whisky, declined 3% from a year ago. The company attributes that to a one-time impact of operating model changes. At the beginning of last year, USL decided to take the franchise route for some brands in its popular business segment in a few states. This segment accounted for 31% of net sales during the April-June quarter.
“Looking forward, we will continue to focus on premiumisation, strengthening our brands and driving productivity while playing a leadership role in shaping the landscape of this industry. We are confident that given the long-term consumer opportunity for spirits in India combined with our leadership position, we are well placed to capture the growth in this industry. We reiterate our medium-term ambition to deliver double digit topline growth and improve margins to mid-high teens,” Kripalu said.
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