Shares of United Spirits, a subsidiary of Diageo, surged over 6% to hit a life-time high on Wednesday, in an otherwise weak broader market, after the alcoholic beverages company reported better than expected first quarter earnings despite inflation headwinds. The sentiment was further lifted after the world's second-largest spirits company by volume announced the acquisition of stake in two companies - V9 Beverages and Indie Brews and Spirits.
Boosted by the development, United Spirits shares gained as much as 6.5% to attain a new all-time high of ₹1,416.85 in intraday trade on the BSE today. The market capitalisation of the company crossed ₹1 lakh crore for the first time to ₹1.02 lakh crore. The liquor stock has risen 45% against its 52-week low of ₹974.25 touched on July 25, 2023.
Early today, shares of United Spirits opened higher for the third straight session at ₹1,356.05 against the previous closing price of ₹1,330.25 on the BSE. The counter has surged more than 9% in three sessions, despite weakness in the broader market. In the last one year, United Spirits has delivered a return of 7.5% to its shareholders, while it added nearly 7% in six months. In the last one month, the largecap stock has risen over 8%.
United Spirits released its June quarter results post-market hours on July 23, posting marginal growth in its top and bottom line, but it was still above Street estimates. The consolidated net profit grew 1.7% year-on-year (YoY) to ₹484 crore in Q1 FY25 compared to ₹476 crore in the year-ago period. The consolidated revenue from operations grew 7.4% to ₹6,238 crore in the first quarter of the current fiscal as against ₹5,808 crore a year earlier. The consolidated EBITDA was at ₹713 crore almost flat from prior year.
On the standalone basis, net sales stood at ₹2,352 crore, up 8.3% YoY, driven by improved footprint as well as revenue growth management interventions. Segment wise, Prestige & Above (P&A) volume and sales grew 5.1% and 10.1% YoY, respectively, and accounted for 87.8% of sales. On the other hand, Popular volumes and sales dropped 4.6% and 2.4% YoY, respectively, as inflation continues to impact the price sensitive consumer of this segment and accounted 9.4% of sales.
“We have commenced fiscal 2025 with a steady performance in the first quarter. Our renovation and innovation offerings are rolling out progressively with an encouraging response,” says Hina Nagarajan, CEO & Managing Director.
The company also informed the exchanges about acquisition of 15% stake in V9 Beverages and 25% shares in Indie Brews and Spirits for ₹2.29 crore and ₹5 crore, respectively.
Incorporated in November 2020, V9 Beverages Private Limited (Sober) is a zero-proof alcohol beverage brand. Its products are Sober Gin, Sober Rum & Sober Whiskey (Distilled non -alcoholic drinks).
Indie Brews and Spirits Private Limited (Quaffine) is an alcohol beverage company, engaged in the business of development, marketing and selling specialty cold brew coffee liqueur. It is a mid-proof alcohol in the premium craft segment. It uses Indian coffee beans and has the potential to cater to a wider drinking occasion, where casual-moderate drinking is on the rise.
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