United Spirits Q3 results: Net profit falls 11%, sales dip 4%

United Spirits, the country’s largest liquor company, on Wednesday said its net sales for the third quarter ended December fell about 4% year on year at Rs 2489 crore but demand has improved sequentially after gradual on-trade recovery.

The company said its net profit for the quarter fell 11.16% on year at Rs 230 crore even as gross margin rose 24 basis points, helped by benign commodities.

“The reported revenue decline of 3.6% in the third quarter reflects improving consumer sentiment over previous quarters, notwithstanding on-premise footfalls still being low, the route to market change in Andhra Pradesh and taxation-led price hikes post Covid-19,” said Anand Kripalu, chief executive officer of USL. “Operational resilience, contextual marketing with focus on in-home occasions, and renovation of our core brands supported the top-line recovery,” he said.

Net sales in the company’s ‘prestige’ and above segment – which has mid-segment and premium brands such as McDowell’s No 1, Royal Challenge, Johnnie Walker and Vat 69 – declined 0.8% partially as a result of lapping a high festive season comparative, the company said.

Net sales in the popular segment – which has mass-market brands such as Bagpiper and White Mischief – declined 6.7% overall, led by a decline of 5.7% in priority states due to increased consumer prices impacting the demand in this price-conscious segment coupled with unfavourable state mix.

“Despite a quicker rebound than originally expected, in the near term, there are still reasons to remain cautious and consequently, the company is not providing quantitative guidance for fiscal 2021,” Kripalu said.