Shares of United Spirits are having their biggest surge in a single-day in nearly two years, trading with gains of nearly 7 percent.
The company reported its June quarter earnings on Thursday, where its EBITDA margin was the highest in eight quarters, or two years. EBITDA margin for the stock rose by 509 basis points from last year to 17.7 percent from 12.6 percent last year.
So what is driving the margin performance?
The company's premiumisation play is working well. Revenue for the premium segment grew by 21 percent during the June quarter from last year, while Volume growth for the quarter stood at 10 percent year-on-year.
A cool-off in inflation led to the company's gross profit margin rise by 268 basis points from last year to 43.6 percent from 40.9 percent.
Consolidated revenue during the quarter also had a surprise uptick with IPL revenues of Rs 500 crore.
Since the new management at United Spirits has taken over, the company has seen its mix improv with popular brand sale, as well as an improvement in balance sheet.
At current levels, United Spirits is trading at 43.5 times financial year 2025 price to earnings.
Shares of United Spirits are trading 6.5 percent higher at Rs 1,038.75. The stock has risen by 19.5 percent on a year-to-date basis.
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