☎️ Con-call Highlights  - #UnitedSpirits Ltd 

**United Spirits Limited (USL) Q3 FY25 Earnings Call Key Takeaways**

**Overall Financial Snapshot (Consolidated):**

- **Net Sales Value (NSV):** INR 3,433 Cr, marking a 14.4% rise compared to the previous year.
- **EBITDA:** Reported at INR 568 Cr, showing a 16.9% increase from last year.
- **Profit After Tax:** INR 335 Cr.

**Individual Financial Performance (Standalone):**

- **Net Sales Value (NSV):** Reached INR 3,432 Cr, with a 14.8% year-on-year increase.
- **Prestige & Above NSV:** Totaled INR 3,063 Cr, ahead by 16.1% year-on-year, constituting 89.2% of total NSV.
- **Popular Segment NSV:** INR 334 Cr, up by 9.6% year-on-year.
- **EBITDA:** Soared to INR 588 Cr, surging 19.8% from last year.
- **EBITDA Margin:** Climbed to 17.1%, an increase of 71 bps year-on-year.
- **Profit After Tax:** INR 473 Cr.
- **Exceptional Charge:** INR 65 Cr, attributed to the multi-year supply agility program.

**Operational Highlights:**

- **Demand Environment:** Moderately improving in sequence, bolstered by the festive season and growth in Andhra Pradesh.
- **Andhra Pradesh:** Accounted for 6.1% of NSV growth in Q3 and 2.4% year-to-date, including retail pipeline filling due to market transition.
- **Price/Mix for Prestige & Above:** Registered at 4.9% in Q3. Overall price/mix at 4.6% and 5.2% when excluding Andhra Pradesh.
- **Top-end Market:** Experienced moderation.
- **Cost and Revenue Management:** COGS productivity interventions and revenue growth initiatives in place.
- **New Product Launches and Innovations:** Unveiled X Series (McDowell's), Don Julio Tequila, Smirnoff vodka flavors, and Royal Challenge pocket packs.
- **Marketing Expenditure:** Allocated 11% of net sales in Q3, with a focus on the festive season and new product launches.
- **Supply Agility Program:** Includes restructuring and optimizing manufacturing, closing one unit, and engaging a third-party manufacturing unit.

**Future Expectations:**

- **Short-term:** A cautiously optimistic view on demand.
- **Full-year FY25 Aspiration:** Aims for double-digit NSV growth for Prestige & Above (including Andhra Pradesh). Total portfolio's double-digit growth may not be realized.
- **Mid-to-long term:** Positive on the Indian consumer market story with ongoing investments for long-term competitiveness.
- **Andhra Pradesh:** True quarterly performance to be gauged in upcoming quarters, focusing on scaling operations.

**Additional Notes:**

- **CEO Succession:** Current CEO and MD, Hina Nagarajan, will be succeeded by Praveen in March 2025, with a planned six-week handover.
- **Karnataka Growth:** Driven by previous year comparisons and duty reductions in the popular segment.

**Analyst Concerns Covered:**

- **Weakness in Top-end Portfolio:** Management expects this to be temporary, impacted by inflationary pressures and consumer sentiment, and anticipates improvement in future quarters.
- **Neutral Alcohol Spirit Inflation:** Persistent concern, expected in high single-digits to low double-digits. Management is lobbying for higher pricing with the government.
- **Glass Prices:** Currently deflating and offsetting ENA increases, expected to stabilize.
- **Margin Improvement:** Projected to continue, supported by COGS and growth initiatives, with a portion reinvested into advertising and promotions.

* Machine generated highlights, exercise diligence

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