United Spirits Hits All-Time High as Market Cap Surpasses Rs 1 Lakh Crore

Record-Setting Performance M-Cap Crossed Rs 1 Lakh Crore

Diageo-controlled liquor maker, United Spirits Ltd, achieved a significant milestone on Wednesday as its stock price surged by over 5%, reaching a new all-time high of Rs 1,417.3 on the NSE. This upward movement pushed the company’s market capitalisation beyond the Rs 1 lakh crore mark. 

Financial Highlights

United Spirits reported a 1.7% year-on-year (YoY) increase in consolidated net profit for the first quarter ending June 30, 2024. The net profit stood at ₹485 crore, compared to Rs 477 crore in the corresponding quarter of the previous year. Consolidated net sales also saw a growth of 3.5%, rising to Rs 2,761 crore from Rs 2,667 crore in the same period last year.

Operational Metrics

At the operating level, the company’s consolidated EBITDA remained steady at Rs 713 crore for Q1 FY25. The EBITDA margin was slightly lower at 25.8%, compared to 26.7% in the previous fiscal period. EBITDA, which represents earnings before interest, tax, depreciation, and amortisation, is a key indicator of the company’s operating performance.

Segment Analysis

• Standalone Performance

The standalone net sales of United Spirits increased by 8.3% YoY to Rs 2,352 crore. This growth was driven by an expanded market footprint, innovative product offerings, and strategic revenue growth management interventions. 

• Prestige & Above vs. Popular Segment

The ‘prestige & above’ segment experienced a robust 10.1% increase in sales. However, the ‘popular’ segment saw a 2.4% decline in net sales due to inflationary pressures affecting price-sensitive consumers. 

• Gross Margin and Productivity

The company’s gross margin stood at 44.5%, an 85 basis points (bps) improvement from the previous year. When excluding a one-off benefit of Rs 13 crore from the base quarter, the gross margin expanded by 145 bps, driven by continuous revenue growth management and productivity enhancements.

• Advertising and Promotion (A&P) Investments

United Spirits’ A&P reinvestment rate was 7.4% of sales, reflecting a higher rate than the previous year’s comparator, despite the quarter being seasonally low. This increased investment in advertising and promotion indicates the company’s commitment to strengthening its market presence.

• Interest Costs

Interest costs amounted to Rs 22 crore for the quarter. When excluding a one-off reversal benefit of Rs 15 crore from the base quarter, interest costs showed a 12.8% increase compared to the same period last year, highlighting the financial challenges faced by the company.

Detailed Financial Performance

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