Notes from recent meet with the management of United Spirits: (Source MOFSL) 🧵
Market cap: 61,300 crores
Revenues: 8821 crores
P/E: 88.4
P/S: 6.82
P/B: 14.2
ROE: 9.49%
ROCE: 13.3%
@dmuthuk
1/n
📈Demand recovery on track:
👉Around 70% of outlets were operational till mid- Aug’21.
👉While the recovery in on-trade channels has been good, night/weekend curfews and restricted timings are affecting sales, with last orders being accepted at 8-9pm in select geographies.
2/n
👉Muted global travel has acted as a tailwind rather than a headwind as it led to duty-free demand converting to duty paid. The management is focusing on the modern off-trade channel to cater to this demand. It activated 2,000 outlets for Scotch over the last one year.
3/n
📈Focus on the margin accretive Scotch portfolio:
👉Black Dog is now available in 3-5 markets.
👉The relaunched Signature, which was present only in West Bengal, Haryana, and Telangana, will be present in 70% of the country over the next 2-3 months.
4/n
👉The Scotch portfolio is hugely gross profit accretive. The cash conversion cycle is also better at 75-90 days v/s 120-130 days for the overall portfolio.
👉RoCE is highly accretive for bottled in origin (BIO) Scotch.
5/n