United Spirits Ltd Share Price – NSE  /  BSE

Alcoholic Beverages, Mid Cap

The agency has reaffirmed its ‘CRISIL A1+’ rating to the short-term bank facilities of USL.

CRISIL said that the rating reflects the strong financial risk profile of USL, minimal debt, accruals of nearly Rs 1,000 crore and modest capital expenditure (capex) plans of approximately Rs 200 crore.

The rating also factors the leadership position of USL in the domestic Indian-made foreign liquor (IMFL) segment along with strong operating efficiency.

The operating performance has improved in the first nine months of fiscal 2024 with revenues increasing by 5.3% year-on-year, along with improvement in the operating margin by nealy 500 basis points to 19.5% from 14.6% driven by operational efficiencies, change in product mix (increasing contribution of higher margin products) and lower other expenses.

Sales volumes have declined in fiscal 2024 mainly due to few brands under popular segment. However, on like-to-like basis, volumes are expected to grow by 1-2%.

CRISIL Rating expects revenue growth to remain healthy at approximately 10% in fiscal 2024 driven by improving realisations and higher focus on Prestige & Above segment. Margin is expected to sustain over 16% during the medium term, aided by various measures undertaken over the past several years including premiumisation of products and leveraging of fixed overheads.

The ratings continue to reflect a leadership position in the spirits industry in India, strong and diversified product portfolio, and operational and technical support it receives from its parent, Diageo Plc. These strengths are partially offset by exposure to regulated nature of the industry.

United Spirits is the largest Indian spirits company that manufactures, sells and distributes beverage alcohol, producing and selling around 60 million cases of Scotch whisky, IMFL whisky, brandy, rum, vodka, gin and wine. Its portfolio of over 15 brands includes McDowell's No.1, Royal Challenge, Signature, and Antiquity as well as Diageo’s iconic brands such as Johnnie Walker, VAT 69, Black & White, Smirnoff and Ciroc.

The scrip rose 0.80% to currently trade at Rs 1,158.45 on the BSE.

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The Board of United Spirits at its meeting held on 04 April 2024 has approved the investment in Inspired Hospitality (Pistola) by subscribing to 3,494 Compulsory Convertible Preference Shares (CCPS) and 10 equity shares of Pistola equivalent to 15.0% of its issued and paid up share capital on a fully diluted basis for an aggregate consideration of Rs 5.65 crore.

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United Spirits Ltd is up for a third straight session in a row. The stock is quoting at Rs 1130, up 1.81% on the day as on 12:49 IST on the NSE. The benchmark NIFTY is up around 0.36% on the day, quoting at 22091.6. The Sensex is at 72819.71, up 0.25%. United Spirits Ltd has dropped around 3.09% in last one month.

Meanwhile, Nifty FMCG index of which United Spirits Ltd is a constituent, has dropped around 1.19% in last one month and is currently quoting at 53338.35, up 0.67% on the day. The volume in the stock stood at 4.79 lakh shares today, compared to the daily average of 6.91 lakh shares in last one month.

The benchmark March futures contract for the stock is quoting at Rs 1131.8, up 1.88% on the day. United Spirits Ltd is up 46.99% in last one year as compared to a 29.37% spurt in NIFTY and a 18.61% spurt in the Nifty FMCG index.

The PE of the stock is 71.44 based on TTM earnings ending December 23.

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Revenue (excluding excise duty) increased 7.49% to Rs 2,989.3 crore in Q3 FY24 as compared with Rs 2781.1 crore in Q3 FY23. The growth in revenue driven by continued premiumisation, and resilient consumer demand.

Prestige & Above segment grew 10.0% but net sales for the popular segment declined 12.4%, primarily due to muted demand. Duty increases in the segment’s salient state further impacted demand adversely.

EBITDA stood at Rs 491 crore in Q3 FY24, registering the growth of 33.42% YoY as compared with Rs 368 crore posted in corresponding quarter last year. EBITDA margin was 16.4%, up 321 bps versus prior year.

Gross margin was 43.4%, up 286 bps versus last year, however, flat sequentially versus the last trailing quarter.

During the quarter, total volumes declined 1.83% to 16,476 cases from 16,783 cases in Q3 FY23.

A&P re-investment rate was 11% of sales, reflecting the seasonality and investment behind the brands during the festive quarter as well as in the cricket world cup.

Hina Nagarajan, CEO & managing director, said, “We have delivered a resilient quarter in a challenging macro environment. While the sequential demand momentum was relatively muted, reassuringly, the premiumisation trend continues. Our consumer engagement remained high with a slew of festivals, the cricket world cup and peak wedding season. The focus on continuous improvement and value chain productivity is reflected in the performance. Looking ahead, we remain cautiously optimistic on growth on the back of sustained investments in our brands, belief in our innovation and renovation pipeline and the long-term India consumer potential.”

United Spirits is the country's leading beverage alcohol company and a subsidiary of global leader Diageo plc. The company manufactures, sells and distributes a portfolio of premium brands.

The scrip rose 0.54% to Rs 1,113.85 on the BSE. It also hit an all time high at Rs 1,148.65 in intraday today.

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