🥃United Spirits🥃
Detail 🧵 on "Diageo India" & "Liquor Industry"
Disc:
'Invested & approximately 15% PF allocation'
Disc:
The intent of thread is to share the info only not any kind of recommendation to 'Buy'
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Detail 🧵 on "Diageo India" & "Liquor Industry"
Disc:
'Invested & approximately 15% PF allocation'
Disc:
The intent of thread is to share the info only not any kind of recommendation to 'Buy'
1/
2/
Definition of Liquor or Spirit:
Wiki says its an alcoholic drink produced by distillation of grains, fruits, or vegetables that have already gone through alcoholic fermentation.
So where is Sin or Unethical?
Definition of Liquor or Spirit:
Wiki says its an alcoholic drink produced by distillation of grains, fruits, or vegetables that have already gone through alcoholic fermentation.
So where is Sin or Unethical?
3/
Even though alcohol as wine or fermented juice is consumed for medical purposes in Ayurveda, its consumption is controversial, often a politically sensitive topic.
Being a land of many religions is another reason for complicating further, especially from a legal aspect
Even though alcohol as wine or fermented juice is consumed for medical purposes in Ayurveda, its consumption is controversial, often a politically sensitive topic.
Being a land of many religions is another reason for complicating further, especially from a legal aspect
4/ Once ex CEO of United Spirits Anand Kripalu said - Its fashionable to talk bad things about alcohol industry
"These are the people talk ill about the industry in the day will come home & have a drink in the evening"
Must watch Kripalu's interview👇👇
"These are the people talk ill about the industry in the day will come home & have a drink in the evening"
Must watch Kripalu's interview👇👇
5/ Liquor industry does spend 4-5 times more on CSR initiatives than other industries.
United Spirts alone pay Rs 20,000 crores taxes to Govt..
Why cant govt spend 10-20% of tax collected from this industry towards educating people on responsible consumption of alcohol?
👇
United Spirts alone pay Rs 20,000 crores taxes to Govt..
Why cant govt spend 10-20% of tax collected from this industry towards educating people on responsible consumption of alcohol?
👇
6/ Liquor Industry in India
①Growing at 8.8% CAGR - organized
❷3rd largest liquor market globally - 34Billion USD
③600 million people in India are over the legal drinking age in India
❹India being the largest consumer of Whiskey in the world
... .
①Growing at 8.8% CAGR - organized
❷3rd largest liquor market globally - 34Billion USD
③600 million people in India are over the legal drinking age in India
❹India being the largest consumer of Whiskey in the world
... .
7/
⑤Vodka's demand growing at 22.8%
❻With growing middle class population, the consumption of alcohol in India will reach 16.8 billion liters by the year 2022
⑦The share of alcohol imported into India is 0.08% of the Indian market
👇
⑤Vodka's demand growing at 22.8%
❻With growing middle class population, the consumption of alcohol in India will reach 16.8 billion liters by the year 2022
⑦The share of alcohol imported into India is 0.08% of the Indian market
👇
8/ The above points, education & development are the key drivers for the industry to grow.
This industry does has a strong moat -highly regulated & complex policies.
Few large players continue to enjoy the premium & growth.
Detail Statistics:
statista.com/topics/5041/al…
This industry does has a strong moat -highly regulated & complex policies.
Few large players continue to enjoy the premium & growth.
Detail Statistics:
statista.com/topics/5041/al…
9/ Few changing dynamics due to COVID:
1. Alcohol to behave like a semi essential category
2. Scotch poised to grow faster
3. Whisky to grow at the expense of beer
4. Accelerated in Home Consumption
How is United Spirits responding to Covid👇
1. Alcohol to behave like a semi essential category
2. Scotch poised to grow faster
3. Whisky to grow at the expense of beer
4. Accelerated in Home Consumption
How is United Spirits responding to Covid👇
10/ United Spirits 5 Strategic Priorities
1. Strengthen & accelerate co brands
2. Evolve route to consumer
3. Drive productivity to invest in growth
4. Corporate Citizenship
5. Winning Organization
1. Strengthen & accelerate co brands
2. Evolve route to consumer
3. Drive productivity to invest in growth
4. Corporate Citizenship
5. Winning Organization
11/
Strengthen & accelerate co brands
United Spirits Brand Portfolio
1. Progress
2. Food
3. Unwind & Relax
4. Cricket &
5. Music
Strengthen & accelerate co brands
United Spirits Brand Portfolio
1. Progress
2. Food
3. Unwind & Relax
4. Cricket &
5. Music
12/
Evolve Route to Consumer: Optimally serving the 3 Indias:
1. Affluent India
2. Middle India
3. Aspiring India
Evolve Route to Consumer: Optimally serving the 3 Indias:
1. Affluent India
2. Middle India
3. Aspiring India
13/
Drive Productivity
NRM -price mix & effective spent
Supply Optimization -transformation & performance
Marketing -visibility & vol rebate
Overheads -office consolidation & re-nego
Cash -debt reduction of 1,517 cr LY, likely in couple of quarters it should be a debt free
Drive Productivity
NRM -price mix & effective spent
Supply Optimization -transformation & performance
Marketing -visibility & vol rebate
Overheads -office consolidation & re-nego
Cash -debt reduction of 1,517 cr LY, likely in couple of quarters it should be a debt free
14/
Corporate Citizenship
Corporate Citizenship
15/
Winning Organization:
1. Talent
2. Culture
3. Simplification &
4. Engage & Energize
Winning Organization:
1. Talent
2. Culture
3. Simplification &
4. Engage & Energize
16/
Financial Ratios & 12 yrs performance
The sales should go back to those glorified years - 2013 & 2014 (sales only not profits 🙂)
Financial Ratios & 12 yrs performance
The sales should go back to those glorified years - 2013 & 2014 (sales only not profits 🙂)
17/ Triggers for stock to move up:
1. Debt free
2. Increase in Consumption
3. Brand
etc
BTW RCB franchisee is a profitable investment.
Risk: Obviously, alcohol ban from state govts, duties & regulations
1. Debt free
2. Increase in Consumption
3. Brand
etc
BTW RCB franchisee is a profitable investment.
Risk: Obviously, alcohol ban from state govts, duties & regulations
18/ Read below few tweets - who are bullish on United Spirits & shared some interesting facts👇
1. Emkay raises target to 680:
1. Emkay raises target to 680:
https://twitter.com/darshanvmehta1/status/1396349985935925249?s=20
19/
2. United Spirits parent - Diageo PLC market cap at $111B. United Spirits mkt cap - apprx $6B
2. United Spirits parent - Diageo PLC market cap at $111B. United Spirits mkt cap - apprx $6B
https://twitter.com/WithRitesh/status/1396425895817072643?s=20
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3. How Diageo transformed United Spirits:
3. How Diageo transformed United Spirits:
https://twitter.com/money_theory/status/1396069062422061056?s=20
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4. This is quite crazy aspiration, United Spirits at 5,500 in 7 yrs😱🙀🙊
4. This is quite crazy aspiration, United Spirits at 5,500 in 7 yrs😱🙀🙊
https://twitter.com/kuttrapali26/status/1396689749037895685?s=20
24/
7. From horse's mouth - 3 (termed as one of his multibagger PF stock)
7. From horse's mouth - 3 (termed as one of his multibagger PF stock)
https://twitter.com/dmuthuk/status/1395539227920650242?s=20
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