United Spirits - Recovery Evident In Q3, Albeit Slower Than Expected: Motilal Oswal
Bottles of Royal Challenge whiskey produced by United Spirits Ltd. sit on display at a roadside liquor store in Gurgaon, Haryana, India. (Photographer: Udit Kulshrestha/Bloomberg)  

United Spirits - Recovery Evident In Q3, Albeit Slower Than Expected: Motilal Oswal

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

In Q3 FY21, United Spirits Ltd. reported further sequential improvement in all parameters on the path to recovery to normalcy.

While on-trade sales would take a few quarters to normalise, in-home consumption remains buoyant.

Recovery in Q3 FY21 was, nevertheless, slower than our expectation – leading to approximately 15% cut in FY21 earning per share.

However, the reduction in FY22 and FY23 EPS forecasts is much lower at ~3% each.

1. Gradual demand recovery, 2. benign commodity costs, 3. the resumption of premiumisation, 4. stagnant working capital (quashing earlier fears), and 5. continued debt repayments augur well for continued healthy earnings growth beyond FY21.

Click on the attachment to read the full report:

Motilal Oswal United Spirits Q3FY21 Result Update.pdf

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