Jul 29, 2009

United Spirits posts positive results | Net up 51%

Liquor major United Spirits has declared its first quarter results. The company's first-quarter net profit was up 51% at Rs 177 crore versus Rs 117 crore year-on-year (YoY) while its net sales were up 22.60% at Rs 1,242 crore versus Rs 1,013 crore YoY.

Mallya said the company saw good sales growth of 17% despite there being 11 dry days due to the general elections. “We focused on cost control given the spiraling raw material costs and we have achieved 18.3% EBDITA margin to net sales as compared to 16% in the previous financial year,” he said.

United Spirits had earlier initiated the sale of treasury stock via which it repaid USD 186 million of debt, Mallya said, adding that the company was considering to raise another USD 300 million — which may be via the qualified institutional placement (QIP) route — to reduce debt further. “There are two world-class private equity investors who are extremely keen and we are working with them. So, going forward, in the next 60-90 days, you will probably see the second tranche of fund raising to pay down the debt even further,” he said.

Prices of molasses, Mallya added, had softened and may reduce further ahead.

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