SM | How Entrepreneurs became Millionaire (Mln)
22 Dec,
11 tweets, 4 min read
United Spirits (UNSP) - A perfect SIP candidate with a 3-5 year investment horizon. Time for a thread πππ
@dmuthuk courtesy : #SparkCapital
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@dmuthuk courtesy : #SparkCapital
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UNSP Strategy of focusing on Prestige & Above (P&A) segment and franchising popular segment higher revenue growth & gross margins over the last 5 years
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Leaner & efficient manufacturing footprint and rightsizing labour force has led to significant EBITDA margin expansion
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From 28 owned manufacturing plants across 15 states in FY16, UNSP has reduced its own manufacturing footprint to 15 plants in only 8 states
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Though UNSP has 7 of its brands in the Top 16 Indian whisky league table, its share of P&A brands have remained largely stable over the last 5 years vs. consistent share gain for Pernod Richard
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UNSP has its task cut out to increase its market share in Mid & Upper-Prestige segments where itβs a distant 2/3 player while continue to maintain its leadership position in lower-prestige segment
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Arresting the loss of market share and driving premiumization could lead to UNSP bridging its operational margin gap with Pernod
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Near-term headwinds for ENA price , key RM prices for USNP likely to impact its gross margin
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Expect continued debt reduction over the next 3 years would provide non-linear delta for earning growth over FY20-23E
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Comparing financials of UNSP & Pernod Ricard
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UNSP - Crystal Ball Gazing
β’ β’ β’
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