USL Q3 net jumps three-fold to Rs 148 crore

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NEW DELHI: Liquor major United SpiritsBSE 1.57 % (USL) today reported an over three-fold jump in its standalone net profit at Rs 147.70 crore for the third quarter ended December 31 on the back of lower finance costs and exceptional expense in the corresponding period last year.

The company had reported a net profit of Rs 37. 23 crore for the October-December period of the previous fiscal.

Total income from operations grew 6.16 per cent to Rs 7,082.22 crore during the quarter under review as against Rs 6,670.72 crore the same period a year ago, United Spirits said in a regulatory filing.

During the quarter, USL’s finance cost stood at Rs 92.23 crore as against Rs 107.66 crore earlier.

The company had reported exceptional expense of Rs 42.12 crore in the third quarter of fiscal 2015-16.

“We have delivered a strong net sales growth of 6 per cent despite the subdued economic environment in the third quarter due to de-monetisation… we have been able to manage through this period better than our initial expectations,” USL CEO Anand Kripalu said.

This growth was underpinned by the firm’s continued focus on premiumisation and increased investments in its power brands, he added.

“In line with our strategy to selectively participate in the popular segment we have entered into agreements to franchise selected popular brands in Andhra Pradesh, Puducherry, Goa, Andaman and Nicobar and Kerala effective from January.

“These changes were made to further improve our operating model and focus our business on the biggest growth opportunities.

“Continued focus on premiumisation, price increases in select states and productivity initiatives helped us to offset inflation and led to 152 basis points improvement in gross margin,” he said.

Kripalu said that the regulatory environment in certain states has led to challenges.

“Tax and excise changes in Maharashtra, West Bengal and Telangana have led to sharp consumer price increases and the route to market changes in Punjab continues to impact performance.

“Although we expect the impact of de-monetization to abate as we move into the next quarter, the recent Supreme Court judgement on liquor outlets near highways remains a risk and adds some uncertainty for the future periods,” he said.