On Wednesday, United Spirits, the producer of Smirnoff vodka, announced a 14.2% increase in second-quarter profits. This surge was driven by robust demand for its high-end alcohol brands.
In the quarter ending on September 30, the Diageo PLC-owned company witnessed a growth in profit before exceptional items and tax, reaching 4.17 billion rupees ($50.08 million), compared to 3.65 billion rupees the previous year.
The ‘Prestige and Above’ segment, encompassing renowned brands like Johnnie Walker, Signature, and Antiquity and contributing to 88% of net sales, experienced a 12.8% increase, reaching 25.20 billion rupees in sales.
Despite a decline of 18.6% in the company’s revenue from operations, totaling 67.34 billion rupees, this decrease can be attributed to subdued demand in its ‘Popular’ segment, housing brands like McDowell’s No.1, Vat 69, and Royal Challenger liquors.
“Net sales in the popular segment were weighed by inflation impacting the target consumer,” the alcoholic beverage maker said in a statement.
Analysts noted that liquor firms faced a setback in the sales of non-premium products due to a delayed festive season in September. However, they anticipate a boost in sales growth during the third quarter.
Earlier this week, Radico Khaitan, the maker of Magic Moments vodka, achieved a remarkable 19.4% increase in second-quarter profit, driven by a surge in demand for its premium brands.
Separately, United Spirits approved an interim dividend of 4 rupees per share.
Shares of the company settled 1.6% higher ahead of the results and were up 10.4% in the September quarter.