United Spirits 8% away from a 52-week low after December quarter earnings miss

Buy / Sell United Spirits share

TRADE

Shares of United Spirits opened 5 percent lower on Wednesday after the company's earnings for the December quarter missed expectations on most fronts. The stock is now 8 percent away from its 52-week low.

The company's net profit declined 65 percent from the year-ago period to Rs 110.5 crore. In the corresponding quarter last year, the company posted a net profit of Rs 301.8 crore. CNBC-TV18 Polls had predicted a profit of Rs 262 crore for the quarter under review. The company had an exceptional item of Rs 151 crore on account of the supply chain agility program which impacted the drop in net profit.

Total income stood at Rs 2,781.1 crore during the period under review, down 3.5 percent against Rs 2,880 crore in the corresponding period of the preceding fiscal.

At the operating level, EBITDA declined 25.6 percent to Rs 367.8 crore in the third quarter of this fiscal over Rs 491 crore in the corresponding period in the previous fiscal.

EBITDA margin stood at 13.2 percent in the reporting quarter as compared to 17 percent in the corresponding period in the previous fiscal. EBITDA is earnings before interest, tax, depreciation, and amortization. The management expects inflationary headwinds to continue for the short-term.

Hina Nagarajan, Managing Director, and CEO said this is the first quarter post the slump in sale and franchising of the strategically-reviewed popular portfolio. During the quarter, the company completed the merger of Pioneer Distilleries Limited to progress towards a simplified legal entity footprint.

"I am also happy to announce that the board of directors have approved a multi-year supply chain agility programme. The programme is expected to strengthen our end-to-end supply chain thereby making it fit for the future," Nagarajan added.

Shares of United Spirits are trading 4.5 percent lower at Rs 779.70. The stock's 52-week low is at Rs 712.