(Reuters) – India’s United Spirits 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 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.
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 64.44 43.43 10.09 13.47 Buy 10 1.02 0.61
Ltd
United 66.76 44.01 13.60 43.77 Hold 13 0.97 0.52
Breweries Ltd
Radico Khaitan 69.05 40.77 13.65 37.38 Strong 6 1.11 0.14
Ltd Buy
Tilaknagar 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
(Reporting by Kashish Tandon in Bengaluru; Editing by Varun H K)
