United Spirits Q2 profit falls 8% to Rs 428 cr

BENGALURU: Diageo-controlled United Spirits reported a 7.8% decline in net profit to Rs 428 crore in the September quarter from Rs 464 crore a year earlier, with a larger loss in its sports business accounting for most of the fall.Total income declined 2.7% to Rs 7,079 crore from Rs 7,276 crore. Revenue from operations, which includes excise duty, fell 2.6% to Rs 7,014 crore.Profit from continuing operations declined 1.5% to Rs 460 crore. The sports business, classified as discontinued operations ahead of its proposed sale, reported a net loss of Rs 32 crore against Rs 3 crore a year earlier.On a standalone basis, net profit fell 2.1% to Rs 462 crore from Rs 472 crore. Net sales value, which excludes excise duty, rose 2.8% to Rs 3,258 crore, even as sales volumes declined 5% to about 15.8 million cases.Standalone advertising and sales promotion spending increased 57% to Rs 378 crore from Rs 241 crore. The company said it invested in brands and new launches ahead of the festive season. Marketing spending accounted for 11.6% of net sales, compared with 7.6% a year earlier.Net sales in the higher-priced Prestige & Above portfolio grew 6.3% to Rs 3,065 crore, accounting for 94.1% of standalone net sales. Volumes in the segment declined 1.2%. Comparisons were restated after McDowell’s No.1 brandy was moved into this segment during the quarter.The lower-priced Popular portfolio’s net sales fell 22.7% to Rs 181 crore, while volumes declined 29.7%. United Spirits attributed the weakness to policy changes in Maharashtra and changes to excise slabs in Karnataka, which hurt realisations and growth.“We delivered a resilient quarter despite a strong prior-year base and regulatory headwinds, while continuing to invest behind our brands for long-term growth,” CEO and managing director Praveen Someshwar said.The company said its planned Rs 16,663 crore sale of Royal Challengers Sports was awaiting approval from Board of Control for Cricket in India. Competition Commission of India cleared the transaction on June 30.You use AI every day. Now get your AI Quotient. Take the AIQ test.