United Spirits reports 21% profit rise in Q3

India’s largest drinks group United Spirits has reported a 21.4% rise in its third quarter profits, as an investigation into the Diageo-controlled firm’s accounts continues.

United Spirits, the largest drinks group in India, saw a significant increase in its Q3 profits

The group, in which UK drinks giant Diageo owns a controlling stake, reported a net profit of Rs 78.81 crore in the quarter to 31 December 2014, with a 2.3% rise in net sales.

United Spirits in part attributed this profit increase to sales of its prestige and above brands, which grew 4.7% by volume and 9% by value.

However, the company said operating profits had been hit by an increase in the prices of its raw materials, predominantly extra neutral alcohol (ENA).

Overall volumes also declined 1.8% to 30.9m cases in Q3, despite announcing in its half year results that it had experienced its fastest growing volumes in more than two years.

It was revealed in September last year that Diageo had ordered an inquiry into loans paid out by United Spirits after its was revealed the group had suffered a massive net loss of £445m in 2013/14.

The group’s full-year financial results for 2013/14 was published after extensive delays due to questions surrounding loans of around £140m issued to its previous parent company UB Holdings, owned by Indian liquor baron Vijay Mallya, believed to be for his beleaguered Kingfisher Airlines.

United Spirits produces the world’s second-largest whisky brand McDowell’s No.1, as well as the Bagpiper and Hayward’s Fine Indian whisky brands.

Minority shareholders in the group recently approved proposals for USL to make and distributed key brands owned by its parent company Diageo in India, weeks after the plans were initially rejected.