Profit before tax fell 11.5% year-on-year to Rs 304.1 crore in Q3 December 2020. Total tax expense fell 12.6% to Rs 74.2 crore in Q3 December 2020 over Q3 December 2019.

Reported net sales declined 3.6%, a sequential improvement from Q2 driven by continued off-trade resilience, gradual on-trade recovery offset by the contraction of owned and franchise business in Andhra Pradesh (AP). Prestige & above segment net sales declined 0.8% partially as a result of lapping a high festive season comparative. Gross margin was 44.6%, up 24 bps versus last year, driven by benign commodities and continued focus on productivity during the quarter. Reported EBITDA was Rs 384 crore, down 9.5%.

Reported EBITDA margin was 15.4%, down 100 bps, primarily driven by lower fixed cost absorption and increase in administrative expenses. Interest costs were Rs 38 crore, down 17% driven by reduced debts and lower interest rates.

Commenting on company's performance, Anand Kripalu, CEO of United Spirits said, The reported revenue decline of 3.6% in the third quarter reflects improving consumer sentiment over previous quarters, notwithstanding on-premise footfalls still being low, the route to market change in Andhra Pradesh and taxation led price hikes post Covid-19. Operational resilience, contextual marketing with focus on in-home occasions and renovation of our core brands supported the top-line recovery. Prestige & Above segment net sales moderately declined 0.8% in Q3, albeit lapping strong normal festive base comparatives. Scotch performance continues to be encouraging. The third quarter witnessed benign commodities which, along with continued productivity, facilitated marginal expansion of gross margin to 44.6%. The company maintained its marketing reinvestment rate for the quarter at a healthy 9.4%. Reported EBITDA margin for the quarter was 15.4% and we delivered a PAT of Rs 230 crore. Despite a quicker rebound than originally expected, in the near term there are still reasons to remain cautious and consequently, the company is not providing quantitative guidance for fiscal 2021. Our business continues to exhibit strong fundamentals and our focus to “Emerge stronger” will hold us in good stead.

United Spirits (USL) manufactures and distributes a variety of alcohols and spirits, including whiskey, brandy and rum. The company also manufactures Indian-made foreign liquor brands.

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