United Spirits gains 3% after Q3 net profit soars

Shares of United Spirits Limited traded 3.4 percent higher in early trade on January 24 after the company reported a 63 percent year-on-year (YoY) rise in net profit to Rs Rs 350.2 crore for the October-December quarter. In the quarter, the company’s other income also increased to Rs 51.2 crore, up from Rs 21.3 crore during the same quarter last year.

In Q3FY24, the company reported consolidated revenue from operations of Rs 6,962 crore, marking a marginal 5.3 percent increase from Rs 6,609.8 crore in the same period the previous year.

At 9:20 am, the counter was trading at Rs 1,118, up 0.8 percent from the previous close on the NSE. In the last year, the stock has gained 34 percent, higher than the Nifty’s 20 percent return over the same period.

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Earnings Before Interest Tax Depreciation and Amortisation (EBITDA) reached Rs 487 crore for the October-to-December quarter, reflecting a significant 30.8 percent growth.

As for volumes, the company experienced a 1.8 percent decline in volumes, with 16,476 cases in the third quarter.

During the quarter, United Spirits observed a 10 percent increase in sales in the Prestige and Above (PA) category, reaching Rs 2,369 crore. Additionally, PA volumes saw a growth of 4.6 percent, reaching 13,419 cases in Q3.

In Q3FY24, United Spirits experienced a decline in the sales of the popular category, with a 12.6 percent YoY decrease to Rs 305 crore. Volumes in the popular category also witnessed a decline of 22.8 percent, reaching 3,057 cases during the same period.

“Looking ahead, the company remains cautiously optimistic on growth on the back of sustained investments in its brands, belief in their innovation and renovation pipeline and the long-term India consumer potential”, said Hina Nagarajan, chief executive officer and managing director of United Spirits.

Analysts at Macquarie have assigned an ‘underperform’ rating on United Spirits stck with a target price of Rs 870, implying a downside of 21.5 percent from the previous close of Rs 1,108.

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