India's United Spirits posts lower Q2 profit on slowing sales

United Spirits

23/10/2024 14:44

Oct 23 (Reuters) - India's United Spirits  UNSP.NS  reported a drop in second-quarter
profit on Wednesday, hurt by slowing sales for both its premium and cheaper brands.
    The Indian arm of the world's largest spirits maker Diageo  DGE.L  reported a standalone
profit of 3.35 billion rupees (nearly $40 million) for the quarter ended Sept. 30, down 2% from a
year ago.
    The company's revenue from operations fell 1% to 66.71 billion rupees.
    For further results highlights, click  urn:newsml:reuters.com:*:nFWN3LZ1BT.

    KEY CONTEXT
    Analysts said competition from smaller competitors weighed on United Spirits' earnings during
the quarter.
    The company reported a 0.8% decline in net sales of alcoholic beverages, citing muted demand
environment and higher-than-expected growth in the previous quarter.
    However, it said it was "buoyant entering the festive season on the back of structural
tailwinds including the reopening of business in the state of Andhra Pradesh after a five-year
gap".
    United Spirits' advertising and sales promotion expenses rose 7% during the reporting quarter,
although its overall expenses declined due to lower raw material costs.
    
    PEER COMPARISON
    
                                           Estimates (next        Analysts' sentiment       
                                              12 months)                                    
                 RIC        PE     EV/EBI  Revenue   Profit  Mean     # of      Stock to    Div
                                   TDA     growth    growth  rating*  analysts  price       yield
                                           (%)       (%)                        target**    (%)
 United Spirits   UNSP.NS   64.44   43.43   10.09    13.47   Buy            10     1.02       0.61
 Ltd                                                                                        
 United           UBBW.NS   66.76   44.01   13.60    43.77   Hold           13     0.97       0.52
 Breweries Ltd                                                                              
 Radico Khaitan   RADC.NS   69.05   40.77   13.65    37.38   Strong          6     1.11       0.14
 Ltd                                                         Buy                            
 Tilaknagar       TILK.NS   30.90   21.87   -21.89   11.00   Strong          1     0.87       0.18
 Industries Ltd                                              Buy                            
 * The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong
Sell
 ** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the
stock is trading above the PT   
    
    JULY TO SEPTEMBER STOCK PERFORMANCE
    -- All data from LSEG
    -- $1 = 84.0540 Indian rupees

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JULY TO SEPTEMBER STOCK PERFORMANCE    https://tmsnrt.rs/48k6th5
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 (Reporting by Kashish Tandon in Bengaluru; Editing by Varun H K)
 ((Kashish.Tandon@thomsonreuters.com; 8800437922;))