United Spirits Q1 net loss at Rs 246.6 cr

Diageo controlled liquor maker United Spirits on Monday reported a consolidated net loss of Rs 246.6 crore for the first quarter ended June 30, mainly due to COVID-19 and subsequent lockdown. The company had posted a net profit of Rs 181.7 crore in the April-June quarter a year ago, United Spirits Ltd (USL) said in a regulatory filing.

Its revenue from operations slipped 47.60 percent to Rs 3,820.7 crore during the quarter under review, as against Rs 7,292.5 crore in the corresponding period previous fiscal.

"During the quarter, our business was severely impacted by COVID-19 led lockdown and the ensuing disruption. The business remained shut for more than a month during the quarter and it resumed only gradually thereafter, in line with varying state-level restrictions.

"The on-premise channel continued to remain shut for the entire quarter. This resulted in a y-o-y (year-on-year) sales decline of 51 percent on underlying basis," Diageo India MD & CEO Anand Kripalu said.

According to USL, its gross margin was 41.7 percent, down 567 bps on a reported basis, primarily driven by "lower franchise income, COGS (cost of goods sold) inflation, one-off obsolete inventory write-off during the quarter".

USL's total expenses declined 41.61 percent to Rs 4,042 crore in Q1 FY 2020-21 as against Rs 6,923.1 crore.

Its Prestige and Above segment was disproportionately impacted by the closure of the on-premise channel and the drying up of social occasions.

Over the outlook, Kripalu said there is sequential improvement month-on-month basis but it is too early to arrive at any conclusions as intermittent lockdowns at the local level is having an impact on both - supply chain as well as retail outlets in July.

"Looking ahead, we will have to navigate several unknowns over the course of this year, including state-level lockdowns that are being re-imposed as well as the real impact of recent tax-related price increases on-demand," he said.

Shares of United Spirits Ltd on Monday settled at Rs 590.90 apiece on the BSE, down 1.36 percent from the previous close.