Beverage giant United Spirits Ltd (USL) on January 25 reported a 27 percent year-on-year surge in profit after tax (PAT) for the third quarter of financial year 2021-22, which came in at Rs 291 crore.
The Diageo-controlled liquor maker had, in the corresponding period of last fiscal year, reported a PAT of Rs 230 crore.
The PAT margin in Q3 FY22 was 10.1 percent, the company said. In a press release attached with the quarterly results, USL said it reached "debt-free status" by December 31, 2021, due to its "healthy operating cash flow".
The reported net sales in the three-month period ending December 2021 increased to Rs 2,885 crore, marking a 15.9 percent YoY jump.
The surge was driven by resilient consumer demand in the off trade channel, continued premiumisation and recovery of the on-trade channel, USL said.
Underlying net sales increased by 14.3 percent, excluding the one-off sale of bulk scotch, it added.
"Prestige & Above segment net sales grew 20 percent, with strong double-digit growth in our scotch portfolio," the company said. Popular segment net sales, however, declined by 1.7 percent.
The earnings before interest, tax, depreciation and amortization (EBIDTA) came in at Rs 491 crore, which was 27.9 percent higher as compared to the year-ago period. The EBITDA margin came in at 17 percent, up 159 bps, primarily driven by operating leverage on fixed costs.
"We upweighted our investment in marketing to support strategic priorities and on-going demand growth initiatives," USL said.
Gross profit came in at Rs 1,273 crore, as compared to Rs 1,082 crore in the second quarter. Gross profit margin was 44.1 percent, down 49 bps on a reported basis, driven by input cost inflation, and "partially offset by favourable product mix and productivity savings", USL said.
Diageo India chief executive officer Hina Nagarajan, while commenting on USL's Q3 performance, said "external operating environment in the near-term will remain challenging, including potential impact from Covid-19 and rising cost inflation".
"We continue to work with agility and remain focused on strengthening our portfolio while driving productivity across the value chain. We remain confident in the market potential and continue to stay focused on our
strategic priorities to drive long-term value creation for all our stakeholders," the CEO added.
On the day when USL released its quarterly results, the company's shares closed at Rs 874.95 a piece, which was 2.29 percent higher than the previous close.
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