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United Spirits sees big jump in profits

28 May 2024 By Ron Emler

Diageo’s Indian subsidiary, United Spirits, increased its fourth quarter profit by 136% to Rs 241 crore, (£240 million), up 136.3% compared with the same period in 2023.

Sales were Rs 6511 crore (£650 million), up 12.4%. This was driven by the growth in its core drinks business plus income from the Indian Premier League cricket tournament in which the company owns the Royal Challengers Bangalore franchise.

India is one of Diageo’s key target markets for growth and investors are likely to be encouraged by the progress in a growing market, but where expansion is moderating following the post-pandemic boom.

Hina Nagarajan, the chief executive and managing director, said: “We have ended fiscal year 2023-24 delivering our double-digit growth guidance and returned to mid teen margins amidst a challenging external environment.

“The year witnessed sequentially moderating demand on the back of sustained consumer inflation and post-pandemic consumption normalisation.

“We have continued our premiumisation intent through innovation and renovation to secure future growth.

“Our most iconic trademark is being renovated and stretched upwards under the new “House of McDowell’s” umbrella that will see it reach new consumers in different sub segments and formats.”

The Prestige & Above (premium) brands accounted for 86.6% of net sales, down 0.3% compared with last year but net sales within the category increased by 6.6% during the fourth quarter.

Meanwhile, Popular (commodity) brands made up 11.6% of net sales during the quarter, down 3.4%, but grew net sales by 3.3%.

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