Unaudited financial results for the quarter and nine months ended 31 December 2021

25 Jan 2022 | Press release

Continued growth momentum on the back of premiumisation

Third quarter performance highlights:

  • Reported net sales increased 15.9%, reflecting a strong quarter driven by resilient consumer demand in the off-trade channel, continued premiumisation and recovery of the on-trade channel. Underlying net sales increased 14.3%, excluding the one-off sale of bulk scotch.
  • Prestige & Above segment net sales grew 20.0%, with strong double-digit growth in our scotch portfolio.
  • Popular segment net sales declined 1.7%, while priority states were flat.
  • Gross margin was 44.1%, down 49bps on a reported basis, driven by input cost inflation, partially offset by favourable product mix and productivity savings. Adjusting the one-off sale of bulk scotch, underlying gross margin was 44.3%, down 31bps.
  • Reported EBITDA was Rs. 491 Crores, up 27.9%. Reported EBITDA margin was 17.0%, 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.
  • Interest includes a one-off non-debt related charge. Underlying interest was Rs. 16 Crores, down 56.8% driven by reduced debt and lower interest rates.
  • Profit after tax was Rs. 291 Crores, up 26.7% and PAT margin was 10.1%.

Nine months performance highlights:

  • Reported net sales increased 22.6%, lapping soft prior year comparators. Growth was underpinned by strong consumer demand in the off-trade, premiumisation trend and continued momentum in at-home consumption occasions. Underlying net sales increased 21.9%, excluding the one-off sale of bulk scotch.
  • Prestige & Above segment net sales increased 26.9%, lapping soft comparators and favourable product mix.
  • Popular segment net sales increased 11.0%, while the priority states increased 10%.
  • Gross margin was 44.3%, up 113bps, primarily driven by favourable product mix, productivity savings from everyday cost efficiencies and lapping a one-off inventory provision.
  • Marketing investment was up 24.9% as the company lapped a reduction in promotional activity during the same period last year due to COVID-19. Marketing reinvestment rate was 8.0% of reported net sales.
  • Reported EBITDA was Rs. 1,084 Crores, up 88.2%. Reported EBITDA margin was 15.6%, up 544 bps primarily due to recovery in gross margin, operating leverage and lapping one-off costs in the prior year. Excluding the one-off items, underlying EBITDA was up 430 bps.
  • Reported interest cost was Rs.52 Crores, down 62.3% driven by debt, interest rate reduction and a net reversal benefit of non-debt related interest charge.
  • Exceptional items include a one-off provision towards an additional demand in relation to a historical customer dispute.
  • Tax includes a one-off reversal of 19.2 Crores.
  • Profit after tax was Rs. 634 Crores, up 343.2% and PAT margin was 9.1%.


Ms Hina Nagarajan, CEO, commenting on the quarter and nine months ended 31 Dec. 2021 said:

“We have delivered a strong quarter, continuing the growth momentum amidst rising inflation. The broad-based growth in the Prestige & Above segment demonstrates the strength of our portfolio, and the continued agility and resilience of the team. We launched the second limited edition of Epitome Reserve Craft Whiskey, a Peated Indian Single Malt. We continued to expand distribution of the renovated Black Dog Scotch, Signature Whiskey and our innovation offering of Royal Challenge American Pride Whiskey.
We also launched ‘In.thebar.com’ this quarter, our digital platform to drive focused consumer engagement and celebrations.

Healthy operating cash flow has enabled us to reach debt free status as on Dec.31st 2021. CRISIL upgraded its rating on United Spirits Limited’s long-term bank facilities to ‘AAA / Stable’ while reaffirming its ‘A1+’ rating on the short-term bank facilities.

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.”