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Mint
23-05-2025
- Business
- Mint
Diageo India expects price drop for some spirits after free trade pact with UK
New Delhi: Diageo India, a subsidiary of British liquor giant Diageo Plc, anticipates that the recently-announced India-UK free trade agreement (FTA) will help lower prices for imported spirits, with some categories seeing a high single-digit reduction, potentially lifting demand for its alcoholic beverages. "The India-UK free trade agreement, which has halved the duty on scotch from 150% to 75%, is landmark. It shall enhance accessibility of scotch in the world's largest whiskey market. As a category captain, for USL, it presents a valuable opportunity to drive deeper penetration and introduce new premium offerings that cater to India's evolving repertoire of consumers," Praveen Someshwar, chief executive officer and managing director, said during the company's earnings call on Friday. USL, or United Spirits Ltd, is an Indian beverages company and a subsidiary of Diageo. Earlier this month, India and the UK finalized the FTA, agreeing to reduce the 150% import duty on scotch whisky and gin to 75% initially, with a further decrease to 40% over the subsequent decade. Diageo India manufactures, sells, and distributes brands such as Johnnie Walker, Ketel One, Tanqueray, Captain Morgan and McDowell's No1, with a portion of its portfolio made locally and another part imported. The company's chief financial officer, Pradeep Jain, said that the duty reduction from 150% to 75% may result in approximately a high-single digit decrease in consumer prices. This will also help lift volumes for the company, he added. "Not just we, my sense is that the government will also insist that we pass on the pricing benefit to the consumer. We are absolutely of the same view that we would want to pass on this benefit completely to the consumer. And therefore, keeping the consumer spend constant, it is reasonable to assume that in this part of the portfolio, a high single digit additional volume growth should occur—that's on the bottled in origin (BIO) portfolio," he said. For spirits bottled in India, or BII, the price reduction could be in the range of 4-5%. To be sure, BII refers to spirits that are shipped to India in bulk and bottled within the country, including both international brands and locally blended spirits. These products dominate the ₹ 1,000–2,000 price segment. This includes brands such as 100 Pipers and Teacher's scotch. BIO refers to spirits that are entirely produced and bottled outside of India before being imported for sale—for instance products made and packaged in the UK like scotch whisky. 'There will be a benefit that accrues into the raw material prices also, but again, we will take a call on that as and when that happens. There is still some amount of work to happen before this actually becomes legislation. So, probably the benefit will start coming only in the financial year 2026-2027,' Jain said. Commenting on potential increase in competition due to duty reduction, Someshwar said, "Any play by a competitor will expand the pie—to me, that is an exciting space to be in." Diageo is a large player in the Indian liquor market, competing with companies like Pernod Ricard and Allied Blenders and Distillers Ltd. For the full year ended March 2025, the company reported gross revenues of ₹ 26,780 crore, a 5.4% year-on-year increase. In the March quarter, the company saw a 10.5% rise in reported net sales to ₹ 2,946 crore, attributed to portfolio resilience and the resumption of business in Andhra Pradesh. Profit after tax for the quarter was ₹ 451 crore, up 17.4%, and gross profit increased by 13.4%, leading to a gross margin of 44.5%.
Time of India
23-05-2025
- Business
- Time of India
UK-India FTA will lead to a high single-digit reduction in prices, volume growth: Diageo
United Spirits Ltd, part of British multinational alcoholic beverage company Diageo, expects a reduction in "high single digit" in consumer prices of imported liquor in India along with additional volume growth after implementation of the India-UK free trade agreement, said its top management in an investors' call on Friday. Diageo India will pass on the benefit of the duty reduction from the free trade agreement between the India and UK governments to the consumers, said its Managing Director Praveen Someshwar and CFO Pradeep Jain. "Reduction of duties from 150 per cent to 75 per cent will typically lead to about a high single-digit reduction in consumer prices," said Someshwar while responding to a question. He further said: "My sense is that the government will also insist that we pass on the pricing benefit to the consumer, and we are absolutely of the same view that we would want to pass on this benefit completely to the consumer, and therefore keeping the consumer spend constant." Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Girls Show Their Perfect Figure In These Sport Photos Take At Perfect Time True Edition Undo Diageo, which owns brands as Johnnie Walker, Black & White, Smirnoff, Tanqueray etc., said it is "reasonable to assume" that in this part of the portfolio, a "high single digit additional volume growth" should happen. Under the trade pact, announced earlier this month, India will reduce duties on UK whisky and gin from 150 per cent to 75 per cent, and further to 40 per cent by the tenth year. Live Events This FTA "also opens up the opportunity of exploring our global portfolio as we see a reduction in duties, there will be some opportunities, and that will be very exciting from a consumer front also," they added. Diageo India expects these reductions mainly to happen on the Bottle-in-Origin (BIO) portfolio, which is distilled and packed in the UK and imported to India. However, over the Bottled-in-India (BII) category, they said the reduction in the prices would be less, because it will have a lesser component of benefit. "So the price reduction might be slightly less than high single digit, my sense is it will be a little bit in the range of 4 to 5 per cent," he said. Most of the IMFL (Indian Made Foreign Liquor) products, which are produced and bottled in India, come under the BII category. However, despite the benefits from the import of raw materials, Diageo India said it will take a call on that as and when that happens. "So, probably the benefit will start coming only in financial year FY26 and FY'27. At that point in time... I don't want to comment right now," they said. Earlier this week, global spirits major Diageo Plc, during its global earnings call, had said it is set to reduce the prices of its Scotch whisky brands in India following the India-UK FTA implementation.
Business Standard
21-05-2025
- Business
- Business Standard
United Spirits Q4 PAT rises 17% YoY; recommends final dividend of Rs 8/sh
The spirits maker's standalone net profit jumped 17.44% to Rs 451 crore in Q4 FY25 as against Rs 384 crore posted in Q4 FY24. Revenue from operations (excluding excise duty) stood at Rs 2,946 crore in Q4 FY25, up 10.50% YoY, the growth was driven by continued resilience of its portfolio in a challenging consumer environment as well as due to a favourable base as business commenced in the state of Andhra Pradesh in Sep-24 after a gap of 5 years. Within the above, Prestige & Above segment grew 13.2%. The Prestige & Above segment accounted for 87.7% of net underlying sales during the fourth quarter of fiscal 2025. The Popular segment accounted for 10.5% of net sales during the fourth quarter of fiscal 2025. The Popular segment net sales registered a growth of 1.1% during the fourth quarter. Profit before tax jumped 27.17% to Rs 585 crore in Q4 FY25, compared to Rs 460 crore recorded in Q4 FY24. EBITDA stood at Rs 505 crore in Q4 FY25, marking a 39.5% YoY increase, driven by strong gross profit growth and sustained discipline and productivity across the value chain. The EBITDA margin improved to 17.1%, reflecting an expansion of 358 basis points compared to the same quarter of the previous year. Gross profit grew 13.4% and reported gross margin was at 44.5%, an expansion of 115 bps YoY. The expansion is led by headline pricing realisation flow-through, ongoing revenue growth management and cogs productivity initiatives, stable commodity basket partially offset by ENA inflation. A&P re-investment rate was 10.8% of net sales, reflecting consistent investment behind the trademarks. Interest cost stood at Rs 22 crore, down 24.1%, primarily on account of customary non-debt-related items. Praveen Someshwar, CEO & managing director, commenting on the FY25 performance, said, The challenging demand environment notwithstanding, we have delivered 13.2% NSV growth for P&A in Q4FY25 and 9.9% P&A growth for FY25, and a leveraged EBITDA growth that takes us to our medium-term guidance. The board of directors has recommended a final dividend of Rs 8 per share for the fiscal year 2024-25, subject to shareholder approval. Looking ahead, we remain focused on delivering sustained growth while creating long-term value for all our stakeholders in line with our ambition to be the best performing, most trusted and respected CPG company in India. United Spirits is the largest Indian spirits company that manufactures, sells, and distributes beverage alcohol, producing and selling around 60 million cases of Scotch whisky, IMFL whisky, brandy, rum, vodka, gin, and wine. Its portfolio of over 15 brands includes McDowell's No. 1, Royal Challenge, Signature, and Antiquity, as well as Diageos iconic brands such as Johnnie Walker, VAT 69, Black & White, Smirnoff, and Ciroc. Shares of United Spirits shed 0.53% to Rs 1,549.15 on the BSE.
Time of India
21-05-2025
- Business
- Time of India
United Spirits Q4 Results: Profit rises 17% on Andhra boost, premium growth
United Spirits Ltd , the country's largest listed liquor company, reported a 17.4% increase in net profit at Rs451 crore, for the quarter ending March. Net sales value grew 8.9% at Rs 3,031 crore for the quarter, on a year-on-year basis. The profit growth was attributed to commencement of operations in Andhra Pradesh after five years, and the premium category which grew at 13.2% on a quarterly basis. Profit rose to Rs 1,558 crore in FY25, from Rs 1,312 crore a year earlier, USL, controlled by Diageo Plc, said in a statement on Tuesday. Revenue from operations for the year increased to Rs 26,780 crore while volume of cases sold grew by 4%. The company that sells brands including Johnnie Walker and McDowell's, said premium volumes grew 9% during the last quarter of FY25, and accounted for 81% to its overall volume sales, while sales of popular or mass-priced products declined by 2% during the same period. 'The challenging demand environment notwithstanding, we have delivered 13.2% NSV (net sales value) growth for P&A (prestige and above) in Q4FY25 and 9.9% P&A growth for FY25, and a leveraged EBITDA growth that takes us to our medium-term guidance," said Praveen Someshwar, chief executive officer at USL. "Looking ahead, we remain focused on delivering sustained growth while creating long-term value for all our stakeholders." Gross profit for the company grew by 13.4% and gross margin was at 44.5%, which had an expansion of 115bps on a year-on-year basis.
Economic Times
21-05-2025
- Business
- Economic Times
United Spirits shares in focus after Q4 profit jumps 75% YoY to Rs 421 crore
Headquartered in Bengaluru, Diageo India has one of the largest manufacturing footprints in alcobev with 35 facilities across India. United Spirits reported a 75% YoY rise in Q4 net profit to Rs 421 crore, driven by steady revenue growth and strong EBITDA performance. The board recommended a final dividend of Rs 8 per share. Despite a challenging demand environment, the company delivered robust NSV growth, maintaining confidence in sustained medium-term growth and value creation. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads United Spirits share price target Shares of United Spirits are likely to be in focus on Wednesday after the company reported a 75% year-on-year jump in net profit to Rs 421 crore for the fourth quarter of FY25, up from Rs 241 crore in the same period last year. Revenue from operations rose 2% to Rs 6,634 crore, compared to Rs 6,511 crore a year PAT rose 26% from Rs 335 crore in Q3FY25, though revenue declined 14% from Rs 7,732 company's board of directors have recommended a final dividend of Rs 8 per share for the fiscal year 2024-25, subject to shareholders' in Bengaluru, Diageo India has one of the largest manufacturing footprints in alcobev with 35 facilities across India. The company is known for brands like Johnnie Walker, Black Dog, Black & White, VAT 69, Antiquity, Smirnoff and Signature, among other Spirits reported a Q4FY25 Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) at Rs 460 crore, which jumped 38% YoY while rising by 12% for the full financial year at Rs 2,243 crore.Q4FY25 reported net sales value (NSV) stood at Rs 3,031 crore, rising by 9% YoY, while FY25's NSV was reported at Rs 12,069 crore, registering a 7% Q4FY25 underlying NSV was reported at Rs 3,068 crore, witnessing a 10% growth while for FY25, it was at Rs 12,106 crore, a 7% on company's earnings CEO & Managing Director Praveen Someshwar said that notwithstanding the challenging demand environment, the company has delivered 13.2% NSV growth for P&A in Q4FY25 and 9.9% P&A growth for FY25, and a leveraged EBITDA growth that takes it to the medium-term guidance."Looking ahead, we remain focused on delivering sustained growth while creating long-term value for all our stakeholders in line with our ambition to be the best performing, most trusted and respected CPG company in India,' he to Trendlyne, the average target price for United Spirits is Rs 1,577, indicating an upside of 1% from current levels. The stock holds a 'Buy' rating based on recommendations from 21 analysts.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
