Shares of United Spirits jump 6%, hit new record high

Shares of United Spirits Ltd rose by 6 percent to Rs 1,038.65 on July 21 at 12:16 pm, following the company’s announcement of its financial and operating results for the first fiscal quarter ending June 30, 2023. The stock hit a record high of Rs 1,044 after the company reported a healthy operational performance in June quarter (Q1FY24).

Diageo-owned liquor firm United Spirits Ltd (USL) on Thursday, July 20, reported an 82 percent year-on-year (YoY) jump in consolidated net profit at Rs 476.7 crore for the first quarter that ended June 30.

In the corresponding quarter last year, the company posted a net profit of Rs 261.10 crore, United Spirits said in a regulatory filing.

In spite of continued raw material inflation, United Spirits’ gross margins during the quarter expanded 140 bps, primarily driven by higher premiumisation.

The company’s standalone Q1FY24 revenues grew 17 percent year-on-year (YoY) to Rs 2,172 crore, while earnings before interest, taxes, depreciation, and mortization (EBITDA) jumped 84 per cent YoY to Rs 385 crore, margins expanded 638 bps to 17.7 percent.

The Prestige & Above segment rose to 86.4 percent of net sales during the first quarter. This segment’s net sales increased 21.2 percent during the first quarter

The Popular segment was slightly down, accounting for 10.4 percent of net sales during the first quarter. The Popular segment net sales increased by 0.9 percent during the first quarter.

Meanwhile, at the consolidated levels, revenues grew 29 per cent led by higher standalone revenues and significant increase in revenues from Indian Premier League (IPL).

Hina Nagarajan, Chief Executive Officer & Managing Director said, “While inflationary pressures remain, our strategy to reshape the portfolio combined with revenue growth management and focus on everyday efficiency is driving sustainable growth across the Prestige & Above segment”.

United Spirits wholly-owned subsidiary Royal Challengers Sports Private has stepped up its earnings, driven by revenues from the IPL’s new media rights cycle, Nagarajan said. “Looking ahead, our priority is to maintain the growth momentum and to deliver long-term value to all our stakeholders,” she added.

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