United Spirits Q4 Review - Better-Than-Expected Results; Lockdown Leads To Sharp EPS Cut: Motilal Oswal

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Motilal Oswal Report

United Spirits Ltd. reported in-line sales and significantly better-than expected Ebitda and profit after tax in Q4 FY21.

The key highlight of the result was the net debt declining to Rs 5.6 billion at end-FY21 (from Rs 20.7 billion at end-FY20) – the net debt has halved even over September 2020 levels.

While deleveraging has historically been a key success area for the company, it was particularly laudable in FY21 given the weak operating environment.

Therefore, return on capital employed dipped just 50 basis point to 16.8% despite a ~42% earnings per share reduction in FY21.

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