USL To Sell 30 Brands To Inbrew Beverages, Deal Estimated To Be Worth Rs.820 Crore

Описание: United Spirits zooms 6% in trade today. Results were broadly in line with estimates. The company has completed a strategic review of popular brands- which was initiated in February last year. The co has entered into a slump sale agreement for Inbrew beverages for 32 brands for Rs 828 cr and additionally also entered into a franchise agreement for 11 other brands for 1331 cr. As a result of the strategic review, Net Sales Value will reduce from 9300 cr to 8000 cr, Total volume will come down to 56M cases (From 79M cases in FY22) and 15 brands are being retained by USL in the popular segment after a strategic review. EBIDTA of these 32+11 brands is about 195 cr for 21-22 and margins stand at 14-15% of net sales (of Rs1350 cr). Royalty income won't offset EBITDA loss on account of slump sales. But the management is confident of recouping this EBIDTA loss from other parts of the business. They, however, don't expect a significant increase in margins from current levels (on account of slump sales & franchise agreements). As far as utilization of sales proceeds is concerned, management said that the proceeds will be used to accelerate journey towards payment of dividend (they have accumulated losses to wipe off before the dividend is paid). Dividend distribution is their top priority.
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