United Spirits Q4 profit drops 40% to Rs 126 crore

United Spirits on Wednesday reported net profit decline of 40% at Rs126 crore for the quarter ended March, mainly due to higher operational cost and impact of excise duty. A year ago, the company had posted net profit of Rs211 crore during the same quarter.

The maker of McDowell's whiskey said underlying net sales declined 1%. The country's largest liquor firm, which is controlled by Diageo Plc, reported an 4% year on year increase in revenues for the fourth quarter at Rs7215 crore.

"Our business was impacted in the current quarter by excise policy changes in a couple of our key states. During the year, our prestige and above portfolio performed well, growing 15%, albeit on a low base" said Anand Kripalu, CEO at USL. "Popular segment on the other hand remains challenged, growing 1% for the full year, after a decline of 4% last year, adjusted for the operating model changes."

During the quarter, EBITDA increased 3%, but margins dipped 8 basis points to 12.6% which the company said was due to gross margin erosion versus last year, partly offset by phasing effect of marketing investment and operating leverage.

The company's 'prestige and above' business were 66% of the net sales during the year, from nearly 63% a year ago.