India's United Spirits tops Q3 profit view but is 'cautiously optimistic' over short-term

United Spirits

23/01/2025 16:03

Jan 23 (Reuters) - United Spirits  UNSP.NS  is "cautiously optimistic" about India's consumption trends in the short-term, the liquor
company said on Thursday, after festive demand and resumption of sales in Andhra Pradesh state helped it beat analysts' estimates for
third-quarter profit. 
    Profit for the October-December quarter jumped 36% on-year to 4.73 billion rupees ($54.8 million), beating analysts' average estimate of
4.05 billion rupees, according to estimates compiled by LSEG. The company also posted an 11% rise in revenue for the quarter.
    "Looking ahead, we remain cautiously optimistic in the short-term...," said CEO Hina Nagarajan. Her comments come as urban consumption in
the world's most populous country shows signs of slowing.
    United Spirits, the Indian arm of Johnnie Walker whisky-maker Diageo  DGE.L , also named V.K. Viswanathan as its chairperson, succeeding
Mahendra Kumar Sharma. The change will be effective April 1, which is also when HT Media boss Praveen Someshwar replaces Nagarajan as the
company's CEO.
    For further results highlights, click (Full Story).
    
KEY CONTEXT
    United Spirits saw strong demand in a quarter which encompassed the Hindu festivals of Dussehra and Diwali as well as Christmas and New
Year's Eve.
    Sales also resumed in the southern state of Andhra Pradesh in the third quarter after a gap of five years, following the government's new
liquor policy which allowed private retailers to sell spirits across the state.
    United Spirits has focused on more premium product in its portfolio in the past few quarters, which has shielded the company from India's
inflation-led consumption slowdown to an extent and boosted its bottom line.     
    
PEER COMPARISON
    
                                    Valuation (next 12 months)   Estimates (next 12 months)   Analysts' sentiment
                        RIC         PE      EV/EBITDA            Revenue       Profit growth  Mean        # of         Stock to price  Div yield
                                                                 growth (%)    (%)            rating*     analysts     target**        (%)
 United Spirits Ltd      UNSP.NS    61.23   42.16                10.38         15.67          Buy         13           0.95            0.62
 United Breweries Ltd    UBBW.NS    68.19   43.39                12.50         44.21          Hold        12           1.01            0.48
 Radico Khaitan Ltd      RADC.NS    61.92   37.87                13.83         34.42          Buy         6            0.87            0.14
 Tilaknagar Industries   TILK.NS    41.97   28.87                -             2.00           Strong Buy  1            1.02            0.12
 Ltd                                                                                                                                   
 
* 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
    
OCTOBER TO DECEMBER STOCK PERFORMANCE 
    

-- All data from LSEG IBES

-- $1 = 86.3840 Indian rupees


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United Spirits Stock Performance in the Third Quarter in Comparison to Peers    https://tmsnrt.rs/4hrdKPp
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 (Reporting by Hritam Mukherjee and Ananta Agarwal in Bengaluru; Editing by Leroy Leo)
 ((Ananta.agarwal@thomsonreuters.com))