Please Share:: 
Change in guard to bolster growth……
• Net revenue for Q4FY14 stood at | 1943.3 crore, posting growth of
~4% YoY against | 1871.4 crore in Q4FY13. Volume for FY14 stood
at 120.7 million cases vs. 123.7 million cases in FY13. Sales for the
company’s Prestige & above segment grew 15% YoY to 33 million
cases vs. 28.7 million cases in FY13
• EBITDA for the quarter stood at | 116.6 crore registering de-growth
of 46% YoY. The decline in EBITDA was on account of a contraction
in the EBITDA margin by ~548 bps YoY to 6.1%
• United Spirits (USL) reported a net loss of | 5380.1 crore in Q4FY14
vs. profit of | 56 crore in Q4FY13. The loss of ~| 4321.6 crore was
due to discontinuing of operations of Whyte & Mackay along with
provisions for doubtful debts/advances to the tune of | 1012.8 crore
Clean-up of balance sheet major step by Diageo
Diageo accounted for provisions to the tune of | 1123.2 crore to
encompass doubtful receivables and advances made to the holding
company UBHL. Further, with the sale of W&M, Diageo accounted for
impairment in goodwill to the extent of | 3235.7 crore resulting into loss
on account of discontinued operations to the tune of | 3047.8 crore.
Premiumisation to take centre stage with Diageo in firm seat
Diageo through its indirect wholly-owned subsidiary Relay BV acquired
14,532,775 equity shares of | 10 each at a price of | 1440 by way of
preferential allotment on November 9, 2012. Further, it acquired 58,668
shares through an open offer (phase 1) and 21,767,749 shares from UBHL,
Kingfisher Finvest, SWEW, Palmer group and UB Sports Management
taking the total number of shares to 36,359,192 or 25.02% as on July 4,
2013. Next, Relay BV acquired nearly 3.76% by way of market purchases
on November 28, 2013 and finally acquired 37,785,214 shares constituting
26% through the second round of open offer to take the total share to
54.78%. Diageo, now with a firm grip over USL can drive the
premiumisation programme and churn USL’s product portfolio towards
value by culling unprofitable products. Further, we believe there will be a
higher adherence to international laws and better corporate governance
on part of USL.
Gearing up to drive into next growth phase; opportune time to join
With Diageo at the helm, we believe USL will go through a significant
transformation and shift from volume to value growth at a more rapid
pace. Also, its strategy of premiumisation and de-leveraging of the
balance sheet remains firmly in place. Consequently, we have segregated
DCF into three phases to capture the transformation and subsequent
accrued benefits of transition. We arrive at a fair price of | 2950 for USL
and maintain BUY recommendation on the stock.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
-->
Change in guard to bolster growth……
• Net revenue for Q4FY14 stood at | 1943.3 crore, posting growth of
~4% YoY against | 1871.4 crore in Q4FY13. Volume for FY14 stood
at 120.7 million cases vs. 123.7 million cases in FY13. Sales for the
company’s Prestige & above segment grew 15% YoY to 33 million
cases vs. 28.7 million cases in FY13
• EBITDA for the quarter stood at | 116.6 crore registering de-growth
of 46% YoY. The decline in EBITDA was on account of a contraction
in the EBITDA margin by ~548 bps YoY to 6.1%
• United Spirits (USL) reported a net loss of | 5380.1 crore in Q4FY14
vs. profit of | 56 crore in Q4FY13. The loss of ~| 4321.6 crore was
due to discontinuing of operations of Whyte & Mackay along with
provisions for doubtful debts/advances to the tune of | 1012.8 crore
Clean-up of balance sheet major step by Diageo
Diageo accounted for provisions to the tune of | 1123.2 crore to
encompass doubtful receivables and advances made to the holding
company UBHL. Further, with the sale of W&M, Diageo accounted for
impairment in goodwill to the extent of | 3235.7 crore resulting into loss
on account of discontinued operations to the tune of | 3047.8 crore.
Premiumisation to take centre stage with Diageo in firm seat
Diageo through its indirect wholly-owned subsidiary Relay BV acquired
14,532,775 equity shares of | 10 each at a price of | 1440 by way of
preferential allotment on November 9, 2012. Further, it acquired 58,668
shares through an open offer (phase 1) and 21,767,749 shares from UBHL,
Kingfisher Finvest, SWEW, Palmer group and UB Sports Management
taking the total number of shares to 36,359,192 or 25.02% as on July 4,
2013. Next, Relay BV acquired nearly 3.76% by way of market purchases
on November 28, 2013 and finally acquired 37,785,214 shares constituting
26% through the second round of open offer to take the total share to
54.78%. Diageo, now with a firm grip over USL can drive the
premiumisation programme and churn USL’s product portfolio towards
value by culling unprofitable products. Further, we believe there will be a
higher adherence to international laws and better corporate governance
on part of USL.
Gearing up to drive into next growth phase; opportune time to join
With Diageo at the helm, we believe USL will go through a significant
transformation and shift from volume to value growth at a more rapid
pace. Also, its strategy of premiumisation and de-leveraging of the
balance sheet remains firmly in place. Consequently, we have segregated
DCF into three phases to capture the transformation and subsequent
accrued benefits of transition. We arrive at a fair price of | 2950 for USL
and maintain BUY recommendation on the stock.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://content.icicidirect.com/mailimages/IDirect_UnitedSpirits_Q4FY14.pdf
No comments:
Post a Comment