United Spirits Q1 profit falls 14% as marketing costs offset premium liquor sales growth
Despite a rise in premium liquor sales, United Spirits recorded lower quarterly profits due to increased marketing and tax expenses.
INDIA – United Spirits Ltd (USL), the Indian subsidiary of global drinks giant Diageo, has posted a 14% year-on-year decline in consolidated net profit for the June quarter, falling to Rs 2.58 billion (US$29.5 million).
The drop came as higher marketing expenditures and a one-off indirect tax impact offset robust demand for premium liquor among affluent consumers.
Revenue from operations for the quarter reached Rs 6,295 crore (US$718.2M), a 0.9% increase from Rs 6,238 crore (US$711.7M) in the same period last year.
The company’s premium segment, which includes international brands such as Johnnie Walker whisky and Tanqueray gin, saw a 9% year-on-year rise in net sales value. This segment’s growth contributed to an 8.4% increase in overall sales value.
USL reported total expenses of Rs 5,776 crore (US$659M) during the quarter, up 2.79% from last year. Earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at Rs 644 crore (US$73.4M), down 9.7%, largely due to higher advertising and promotion spending in the standalone business and the tax-related charge.
The beverage alcohol segment generated revenue of Rs 2,549 crore (US$290.8M), an 8.37% rise from the previous year.
Meanwhile, the company’s sports business, Royal Challengers Sports Private Ltd (RCSPL), which owns the Royal Challengers Bangalore (RCB) teams in both the Indian Premier League (IPL) and Women’s Premier League (WPL), recorded a 15.73% revenue increase to Rs 478 crore (US$54.5M).
USL’s consolidated net sales value for the quarter reached Rs 3,021 crore (US$344.7M), marking a 9.4% year-on-year rise. The growth was driven by the 8.4% expansion in the standalone business and the strong performance of the sports division.
The Prestige & Above category accounted for 88.3% of net sales in the first quarter, while the Popular segment contributed 9.8%. The Popular segment’s net sales grew by 13.6% year-on-year.
USL’s total income for the quarter was Rs 6,367 crore (US$726.4M), a 1.5% increase. The quarter also marked the completion of the company’s acquisition of Nao Spirits.
Managing Director and CEO Praveen Someshwar said the company remains focused on portfolio enhancement, tailored consumer engagement, and revenue growth management to drive future expansion.
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