• FY net profits fall 9.7% to INR3.43bn ((US$609.8m)
  • Net sales up 18.4% to INR75.42bn
  • Operating profits rise 5.3% to INR10.66bn
  • Company eyes four new markets in Africa and Asia 

 

Duties and tax rises hit the firm in the second half of the fiscal year

Duties and tax rises hit the firm in the second half of the fiscal year

United Spirits has reported a slight drop in full-year profits as the performance of two key markets “dampened” its results. 

Net profits fell 9.7% to INR3.43bn (US$609.8m) in the year from April 2011 to March 2012. Net sales however rose in the same period by 18.4% to INR75.42bn, the company said today (30 May). Operating profits were up 5.3% to INR10.66bn. 

The Bangalore-based company said the performance of two of its key markets – West Bengal and Tamil Nadu – hit its figures.

“Exorbitant” rises in tax and duties in West Bengal between August and September last year led to a 35% drop in “off-take” in the second half of the fiscal year.

Meanwhile, in Tamil Nadu, the company said a government-owned buying agency “targeted USL's national brands to favour local offerings”. This affected sales of United Spirits brands by 2m cases in the second half of the year, the company said.

But, it said its increase in operating profits was due to price increases and the “premiumisation drive” of the company. 

In its final quarter, to the end of March, United Spirits saw net profits plunge 83% to INR100.1m, due to higher finance costs and foreign-exchange losses.

Looking ahead, the company said it is seeking to open up four new markets in the African and Asian continents. “The company’s Emerging Markets Division is spearheading the foray into these markets with brands from both the Indian and the Whyte & Mackay stables, initially on an export basis from India and Scotland while progressively developing local manufacturing capability for the volume portfolio,” it said.

Shares of the company were down 6.07% on the Bombay Stock Exchange today