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- While Revenue surged compared to Q1FY21 which was anyway a weak quarter, there was a 27% dip sequentially
- Overall volume was up 61% with Popular segment growing slightly ahead at 62% versus Prestige & Above at 60%
- Adverse product mix impacted realisation growth for the quarter while the company saw stable input costs
Mumbai: A decent show from liquor maker United Spirits. It reported a 57 per cent growth in its Net of excise duty Revenue, at Rs 1615 crore. It churned out an EBITDA of Rs 168 crore and a margin of 10.4 per cent. The Profit after tax stood at Rs 69 crore.
The key parameter is volume growth. The overall volume growth stood at 61 per cent. It was led by the popular segment which grew by 62 per cent while net sales grew 60 per cent. Prestige & Above segment volumes grew 60 per cent and net sales grew 58 per cent. The company says that the product mix was a little skewed towards lower value products which impacted the average realisations during the quarter. The company says the demand environment was resilient in the first three weeks of April but the second wave and the lockdown impacted the momentum post that. Similar to the previous quarters, the off-trade channel continued to be resilient.
Gross margins expanded 296 bps coming in at 44.6 per cent. While the input cost environment was benign, the company had also put in place strict cost controls and restricted expenses which further boosted gross and EBITDA margins. Interest cost was down to Rs 19.8 crore vs Rs 27.5 crore QoQ on the back of continued debt reduction. The company booked Rs 36.4 crore of exceptional charge this quarter.
ICICI Securities maintains an adds with a target at Rs 750. They largely maintain earnings estimate; modelling revenue / EBITDA / PAT CAGR of 16 per cent / 39 per cent / 65 per cent over FY21-23E. Key downside risks are significant downtrading due to tax hikes, continued weakness in on-trade due to operating restrictions and a potential ban of spirits in states.