United Spirits enjoys strong Q3

India’s United Spirits, which produces Smirnoff vodka, has reported an increase in its third-quarter profit due to demand for premium brands.

Diageo is the majority shareholder of United Spirits, whose portfolio includes the Johnnie Walker and Black & White whisky brands.

In the three months that ended on 31 December 2023, United Spirits saw its total income reach 69.95 billion rupees (US$841.42 million), up from 66.35bn (US$798.12m) rupees during the same period in 2022.

The company’s third-quarter 2023 profit before exceptional items reached 4.59bn rupees (US$55.21m), up from 3.03bn rupees (US$36.45m) the year prior – a 51% increase.

Hina Nagarajan, CEO and managing director, said: “We have delivered a resilient quarter in a challenging macro environment. While the sequential demand momentum was relatively muted, reassuringly, the premiumisation trend continues.

“Our consumer engagement remained high with a slew of festivals, the Cricket World Cup and peak wedding season. The focus on continuous improvement and value chain productivity is reflected in the performance.

“Looking ahead, we remain cautiously optimistic on growth on the back of the sustained investments in our brands, belief in our innovation and renovation pipeline, and the long-term India consumer potential.”

United Spirits’ standalone net sales value grew by 7.5% during the third quarter, with the prestige-and-above segment increasing by 10.0%.

However, net sales for the company’s ‘popular’ segment declined by 12.4% as demand decreased and higher duty costs in important states adversely affected demand.

In 2022, the Indian company agreed to sell 32 brands to Inbrew Beverages for approximately 8.2bn rupees (US$105.7m). United Spirits started a strategic review of around 15 brands in February 2021, as part of its strategy to improve profitability.