Thread by @MlnDollarMinds

Alcobev Virtual Conference hosted 8 companies: listed and unlisted players; Management commentaries highlight positive trends after the extreme phase of Covid-19

#UnitedSpirit #UNSP a stock worth accumulating.

Time for a thread 👇👇👇

@dmuthuk @Kiran24Rajput
(1/n)

United Spirit Management comments on the industry and the company.

Demand has returned to pre-Covid-19 levels. It is also benefiting from some tailwinds – duty-free shifting to duty-paid and shift from beer.
(2/n)

On-premise footfalls are still lower at 25-30%, while on weekends footfalls are a bit better. Wedding impact is still there but not that visible as the rest of the top end is growing well. Overall demand, including off-premise, has improved much better than expectation.
(3/n)

As on-premise normalizes, some tailwinds are expected to recede, but management expects some consumers who have shifted from beer to spirits may stay with spirits. The company believes that overall trend will improve going ahead.
(4/n)

UNSP will continue to innovate to improve market share and innovation may contribute 10-15% going ahead. McDowells No.1 Whisky re-launch is now in 70-80% of market and doing very well. Royal Challenge Whisky has not performed up to expectations and could have done better.
(5/n)

The focus on growth remains high and aspirations for growth remains in line with the company’s previous growth numbers. While most states have returned to the growth path, WB has been a disappointment as the recent consumer price increase is even above 35- 40%.
(6/n)

Management is comfortable with the cash-flow situation. It is about to become a debt-free company soon.
(7/n)

High commodity prices and AP market share losses since H2FY20 impacted margins in the previous quarters. Commodity prices are soft now. Management expects to get back to pre-Covid margins by year-end.
(8/n)

Price increases at the national level are under-indexed this year. UNSP expects to return to the historical price increases levels by next year.
(9/n)

The pipeline stocking typically happens before the festive season every year. Hence, nothing is much different in Q2FY21 in comparison with Q2FY20. So far, the stocking levels for the New Year are also similar to the previous year.
(10/n)

Seven operational states have allowed online sales. Though salience is limited, trends have been encouraging. Although UNSP believes that these trends take some time to get established, it has so far been very positive and augurs well for the industry.
(11/n)

United Spirit will see visibility in profits going forward.

Full benefit of Premiumisation and Interest Benefit yet to get captured.

#PictureAbhiBakiHainMereDost

(12/12)