- 25 Oct 2022
- ICICIdirect Research
United Spirits beats estimates on all frontsMCDOWELL-N - 764 Change: -5.00 (-0.65 %)
USL's net revenues grew 18% YoY to Rs 2880 crore (I-direct estimate: Rs 2611 crore), driven by resilient demand in off-trade channels, on-trade recovery and product mix improvement. Reported EBITDA grew 5% to Rs 446 crore but came above I-direct estimate of Rs 326 crore, led by 298 bps expansion (vs. estimate) in EBITDA margins to 15.5% vs. I-direct estimate of 12.5% (led by cost control measures employed by the company). However, reported PAT grew 2x YoY Rs 563 crore and also came in above I-direct estimate of Rs 202 crore, as a stong operational performance was further lifted by an exceptional profit of Rs 372 crore, due to the slump sale. Most of the proceeds from slump sale (Rs 818 crore) have been invested in WC changes (Rs 313 crore) and in secured funds (Rs 275 crore).
Gross margins have improved 144 bps QoQ, in spite of the full impact of higher inventory costs in the current quarter. The reason can be attributed to strong P&A sales during the quarter. Also, the portfolio reshape strategy employed by the company will reduce the current net sale by Rs 351 crore (with a near 10% EBITDA margin profile). However, the premiumisation will likely go upwards 85%+from next quarter onwards and thereby improve margin profile.