United Spirits’ Performance Analyzed
United Spirits, the company that makes brands like Johnnie Walker and Royal Salute, recently showed a strong jump in profits – a 24.8% increase compared to last year’s December quarter. They made ₹418 crore in profit, and sales went up by 7.6% to ₹3,694 crore. However, despite this good news, several financial experts cut their predictions for the company’s stock price.
Key Points
- Strong profit growth (24.8% increase).
- Revenue increased by 7.6% to ₹3,694 crore.
- EBITDA margin slightly decreased due to higher advertising costs.
- Experts cut stock price targets, citing higher expenses and taxes.
- Monitoring mass-market liquor and GST changes is crucial.
- Company focusing on premium products and pricing strategies.
The reason for the lower stock predictions comes from several analysts. Motilal Oswal and JM Financial, both respected financial firms, reduced their expectations for how much United Spirits will earn in the future. They believe the company is spending too much on advertising and promotions – around 16.8% of their sales – which is affecting their profits.
These analysts also pointed out that changes in taxes, like the Goods and Services Tax (GST) and increased excise duties, could make things harder for United Spirits. They are watching to see if state governments will change their tax rules too. One important factor is the upcoming UK trade deal, which could be good for the company.
Despite these concerns, United Spirits is taking action. They’re trying to sell more expensive drinks and making them easier to buy with things like pocket packs. The stock price moved up a little during the day, going as high as ₹1,337.7, but it eventually settled at ₹1,336. This is down 7.4% for the year, compared to a 3% drop in the overall stock market.
United Spirits has a large market value – about ₹22,247.43 crore. It’s important to remember that these are just predictions from analysts, and the company’s actual performance could be different.
Ultimately, United Spirits’ future success depends on its ability to manage costs and adapt to changing market conditions.
