United Spirits - Modest Recovery In Q3; Long Way To Go: Dolat Capital 

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Dolat Capital Report

United Spirits Ltd.’s Q3 FY21 was ahead of our subdued expectations. Revenue trends in Q2 FY21 (down 3.4% YoY) and Q3 FY21 (down 3.6% YoY) were similar – a key disappointment.

The company’s revenue/Ebitda/adjusted profit after tax declined by down 3.6/down 9.5/down 11.2%.

In nine-months FY21, the company’s revenue/Ebitda/APAT were down 18.2/down 46.5/down 59.7% YoY versus Radico Khaitan Ltd. down 6.4/up 6.3/up 11.1% YoY.

Despite benign raw material prices, modest gross margin expansion of 24 basis points YoY (230 basis points for Radico) was another area of regret.

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