Budget News

United Spirits
July 27,2022 00:40

UnitedSpirits consolidated net sales increased 40.51% to Rs 2419.1 crore in Q1FY23compared to Q1FY22. Operating profitmargin has jumped from 10.95% to 15.39%, leading to 97.51% rise in operatingprofit to Rs 372.30 crore. Raw materialcost as a % of total sales (net of stock adjustments) decreased from 56.99% to50.77%. Purchase of finished goods costrose from 2.68% to 8.60%. Employee costdecreased from 9.39% to 6.23%. Otherexpenses fell from 21.69% to 20.94%. Selling and administration expenses rose from 4.22% to 5.09%. Provisions writeoffs cost fell from 0.25% to0.01%.

Otherincome rose 235.90% to Rs 26.2 crore. PBIDT rose 103.01% to Rs 398.5 crore. Provision for interest fell 11.42% to Rs 22.5 crore.

PBDTrose 120.01% to Rs 376 crore. Provisionfor depreciation rose 11.84% to Rs 83.1 crore.

Profitbefore EO grew 203.21% to Rs 292.90 crore. The company reported EO expense of Rs 38.4 crore compared to EO expenseof Rs 45.3 crore. PBNT after EO was up 396% to Rs 254.2 crore. During thequarter, the Company announced a Voluntary Separation Scheme (VSS) coveringpermanent workmenat four factories. Pursuant to the Scheme, the Company has recognised an amountof Rs 38.4 crore as employee separation costs which is presented as anexceptional item in the standalone and consolidated financial results for thequarter ended June 30, 2022

Provisionfor tax was credit of Rs 6.9 crore, compared to debit of Rs 1 crore. Effective tax rate was negative 2.71%compared to 1.95%.

Minorityinterest increased 1.92% to Rs -5.10 crore. Net profit attributable to owners of the company increased 379.64% to Rs266.20 crore.

Promoters'stake was 56.73% as of 30 June 2022 ,compared to 56.76% as of 30 June 2021. Promoters pledged stake was 1.19% asof 30 June 2022 ,compared to 1.19% as of 30 June 2021 .

Ms Hina Nagarajan, CEO,commenting on the results said,“We have delivered another quarter of steady performance in a challengingoperating environment. Our business today is ahead of pre-pandemic levels,substantiating the resilience of our category. Double digit inflation, scotchsupply constraints in select markets and a one-time special grant to our peoplein recognition for the outstanding contribution in extremely challenging times,impacted the EBITDA margin delivery.

Lookingahead, in the shorter term, we expect inflationary pressures to continue. Ourconfidence in the medium to long-term prospects of our industry, the resilienceof our business and our ability to navigate headwinds remains high. We remainfocused in our strategy of re-shaping the portfolio towards premiumization,revenue growth management initiatives, enhancing our value chain productivitypipeline and continuing to build the organization of tomorrow, to deliverconsistent growth and long-term value creation for all our stakeholders.”

Full year resultsanalysis

Netsales of United Spirits have increased 19.44% to Rs 9712.4 crore. Operating profit margin has jumped from12.95% to 16.56%, leading to 52.76% rise in operating profit to Rs 1,608.10crore. Raw material cost as a % of totalsales (net of stock adjustments) decreased from 49.67% to 48.97%. Purchase of finished goods cost rose from4.37% to 5.89%. Employee cost decreasedfrom 6.96% to 6.67%. Other expensesfell from 25.84% to 22.05%. Selling andadministration expenses rose from 6.90% to 7.09%. Provisions writeoffs cost fell from 0.64% to0.13%.

Otherincome fell 10.35% to Rs 35.5 crore. PBIDT rose 50.47% to Rs 1643.6 crore. Provision for interest fell 53.09% to Rs 88 crore. Loan funds declined from Rs 1,036.80 crore asof 31 March 2021 to Rs 605.40 crore as of 31 March 2022. Inventories rose to Rs 2,156.70 crore as of31 March 2022 from Rs 2,051.90 crore as of 31 March 2021. Sundry debtors were higher at Rs 2,373.60crore as of 31 March 2022 compared to Rs 2,187.20 crore as of 31 March2021. Cash and bank balance declinedfrom Rs 83.90 crore as of 31 March 2021 to Rs 60.30 crore as of 31 March2022.

PBDTrose 71.95% to Rs 1555.6 crore. Provision for depreciation rose 1.57% to Rs 303.8 crore. Fixed assets declined from Rs 1,968.80 croreas of 31 March 2021 to Rs 1,563.50 crore as of 31 March 2022. Intangible assets increased from Rs 21.00crore to Rs 387.00 crore.

Profitbefore tax grew 106.70% to Rs 1,251.80 crore. Share of profit/loss were nil in both the periods. The company reported net EO expense of Rs 165.2crore compared to net EO expense of Rs 64.3 crore. PBT after EO rose 101% to Rs1086.6 crore. EO items in FY22 includes Rs 10 crore towards commitment towardssupport for improving healthcare infrastructure, Rs 35.3 crore towardsprovision for claim from a customer, Rs 50 lakh towards gain on disposal ofassociate, Rs 86.4 crore towards accelerated charge of pre-paid brand fee andRs 34 crore towards provision for impairment loss on property, plant andequipment. EO items in FY21 includes Rs 20.6 crore towards impairment in thevalue of Investment in a subsidiary and associate, Rs 2 crore towards fairvalue loss on financial assets mandatorily measured at fair value throughprofit or loss, Rs 33.3 crore towards gain on disposal of investment in a subsidiaryand Rs 75 crore towards commitment towards Raising the Bar programme

Provisionfor tax was expense of Rs 276 crore, compared to Rs 177.9 crore. Effective tax rate was 25.40% compared to32.94%.

Minorityinterest increased 16.28% to Rs -18.00 crore. Net profit attributable to owners of the company increased 116.01% to Rs828.60 crore.

Equitycapital stood at Rs 145.30 crore as of 31 March 2022 to Rs 145.30 crore as of31 March 2021. Per share face Valueremained same at Rs 2.00.

Promoters'stake was 56.73% as of 31 March 2022 compared to 56.76% as of 31 March 2021. Promoters pledged stake was 1.19% as of 31March 2022 compared to 1.19% as of 31 March 2021. .

Thescrip trades at Rs 850.

United Spirits: Consolidated Results
	2206 (03)	2106 (03)	Var (%)	2203 (12)	2103 (12)	Var (%)
Net Sales	2419.10	1721.70	41	9712.40	8131.30	19
OPM (%)	15.4%	10.9%		16.6%	12.9%
Operating Profits	372.30	188.50	98	1608.10	1052.70	53
Other Income	26.20	7.8	236	35.50	39.60	-10
PBDIT	398.50	196.30	103	1643.60	1092.30	50
Interest	22.50	25.40	-11	88.00	187.60	-53
PBDT	376.00	170.90	120	1555.60	904.70	72
Depreciation	83.10	74.30	12	303.80	299.10	2
PBT	292.90	96.60	203	1251.80	605.60	107
Share of Profit/(Loss) from Associates	-0.30	0.00		0.00	-1.30	-100
PBT Before EO	292.60	96.60	203	1251.80	604.30	107
EO income	-38.40	-45.30	0	-165.20	-64.30	0
PBT after EO	254.20	51.30	396	1086.60	541.30	101
Tax Expense	-6.90	1.00	LP	276.00	177.90	55
Net profit before MI	261.10	50.30	419	810.60	363.40	123
MI	-5.1	-5.2	-2	-18.00	-21.50	-16
PAT	266.20	55.50	380	828.60	384.90	115
EPS* (Rs.)	#	#		13.1	5.9
*Annualised on Equity Share Capital Rs 145.3 crore; Face value Rs 2
EO: Extraordinary items, Var.(%) exceeding 999 is restricted to 999
EPS is calculated after excluding EO and relevant tax
Figures in Rs crore
Source: Capitaline Database

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