United Spirits (USL) on Sunday announced that the company's profit for the first quarter ended June 30 rose 43.6 percent even as revenues fell 0.5 percent, aiding Supreme Court's decision to ban alcohol sales near highways.
USL's profit rose to Rs 62.9 crore for the quarter ended June from Rs 43.8 crore for the same quarter a year ago. On the flip side, the company's revenue fell to Rs 5,847.7 crore from Rs 5,877.2 crore, corresponding quarter last year, the firm said in a filing to BSE on Sunday evening.
"Performance in the first quarter, as expected, was impacted by the highway ban which has led to lower consumption due to a reduction in the number of retail outlets. We have also seen destocking by customers during the first quarter," chief executive officer Anand Kripalu said in a statement.
Net sales from USL's popular segment, which includes brands such as Bagpiper, Director's Special and Haywards whiskies, declined 20 percent due to its decision to take the franchisee route for this segment in a few states, the company said in its statement.
Sales of higher end brands in the prestige and higher segments also declined in the latest quarter as the industry was hit by the apex court's decision to ban alcohol near state and national highways. Sales from this segment fell 8 percent during the period, the statement further said.
EBITDA stood at Rs 157 crore, declining 26 percent for the quarter ended June. EBITDA margins were at 8.8 percent, downs 162 basis points, primarily driven by a decline in net sales.
"Looking forward, we expect the impact of the highway ban to continue into the second and third quarter in fiscal 2018, however, to a lesser extent. Following the recent Supreme Court ruling allowing states to denotify particular stretches of highways within city limits, we are starting to see early signs of outlets opening again, which is encouraging," Kripalu added.