{"id":130756,"date":"2022-06-23T04:23:45","date_gmt":"2022-06-23T08:23:45","guid":{"rendered":"https:\/\/44.250.171.167\/?p=130756"},"modified":"2022-10-06T04:22:21","modified_gmt":"2022-10-06T08:22:21","slug":"united-spirits-limited-q4-fy22-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/united-spirits-limited-q4-fy22-earnings-conference-call-insights\/","title":{"rendered":"United Spirits Limited Q4 FY22 Earnings Conference Call Insights"},"content":{"rendered":"<p><iframe loading=\"lazy\" title=\"United Spirits Limited Q4 FY22 Earnings Concall\" width=\"500\" height=\"375\" src=\"https:\/\/www.youtube.com\/embed\/Vvcm7ol3-Ew?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<h2><strong>Key highlights from United Spirits Limited (<a href=\"https:\/\/44.250.171.167\/symbol\/MCDOWELL-N\/\">MCDOWELL-N<\/a>) Q4 FY22 Earnings Concall<\/strong><\/h2>\n<p><strong>\u00a0<\/strong><\/p>\n<h3><strong>Management Update:<\/strong><\/h3>\n<ul>\n<li>MCDOWELL-N expects volatility, temporary import supply constraint and inflationary headwinds to remain in short term, putting pressure on its growth and margins.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<h3><strong>Q&amp;A Highlights:<\/strong><\/h3>\n<p><strong>Avi Mehta<\/strong> &#8211; <strong>Macquarie Group &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>EBITDA and working capital impact of the slump sales?<\/li>\n<\/ul>\n<p><strong>Pradeep Jain &#8211; Chief Financial Officer<\/strong><\/p>\n<ul>\n<li>The EBITDA of the perimeter business (32 sold and 11 franchised) is about INR195 crores for FY22.<\/li>\n<li>The margin for perimeter is about 14% of net sales, which is about INR1,330 crores.<\/li>\n<li>Direct and serve model, EBITDA margin is about 11-12%.<\/li>\n<li>Working capital is an integral component of the enterprise value.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Avi Mehta &#8211; Macquarie Group &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>Payment schedule of the 11 brands franchised?<\/li>\n<\/ul>\n<p><strong>Pradeep Jain &#8211; Chief Financial Officer<\/strong><\/p>\n<ul>\n<li>On franchise leg, Inbrew has only one call option.\n<ul>\n<li>If Inbrew was to exercise this call option at the end of 5<sup>th<\/sup> year, the payment of INR1,330 crore will happen from year 6 to year 10.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Avi Mehta &#8211; Macquarie Group &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>Update on ENA (Extra Neutral Alcohol) and glass prices in the near term?<\/li>\n<\/ul>\n<p><strong>Pradeep Jain &#8211; Chief Financial Officer<\/strong><\/p>\n<ul>\n<li>Inflation is mounting.<\/li>\n<li>Glass needs to be given another price increase in Feb., early March.<\/li>\n<li>ENA is going up due to geopolitical tension and Europe conflict as grain is under pressure.<\/li>\n<li>Hope to make progress on pricing over the next 2-3 months.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Jai Doshi &#8211; Kotak Mahindra Bank &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>Breakup of RM basket in terms of contribution between ENA, glass bottle and other key RM?<\/li>\n<\/ul>\n<p><strong>Pradeep Jain &#8211; Chief Financial Officer<\/strong><\/p>\n<ul>\n<li>ENA and glass bottles are about two-thirds of the RMPM (Raw Material Packaging Material) basket.\n<ul>\n<li>Both commodities are under inflationary pressure.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Percy Panthaki &#8211; IIFL &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>The 79 million cases are under franchise agreement or done by MCDOWELLN?<\/li>\n<\/ul>\n<p><strong>Pradeep Jain &#8211; Chief Financial Officer<\/strong><\/p>\n<ul>\n<li>Do not recognize franchise to company volume.\n<ul>\n<li>79 million cases is all direct-and-serve network, which will reduce from 79 million to 56 million.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Prakash Kapadia &#8211; Anived Portfolio &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>What kind of EBITDA margins can be expected from higher contribution from the premium portfolio?<\/li>\n<\/ul>\n<p><strong>Pradeep Jain &#8211; Chief Financial Officer<\/strong><\/p>\n<ul>\n<li>The margins are almost in line with the portfolio margins.\n<ul>\n<li>Will not have significant impact on the portfolio margins.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Prakash Kapadia &#8211; Anived Portfolio &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>Capex for FY23?<\/li>\n<\/ul>\n<p><strong>Pradeep Jain &#8211; Chief Financial Officer<\/strong><\/p>\n<ul>\n<li>Not materially different from the historical run rate.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Shirish Pardeshi &#8211; Centrum &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>Hyperlocalization will be done via the franchise route or M&amp;A route?<\/li>\n<\/ul>\n<p><strong>Hina Nagarajan &#8211; Managing Director <\/strong><\/p>\n<ul>\n<li>Hyperlocalisation comment was in the context of marketing activation.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Shirish Pardeshi \u2013 Centrum &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>If the slump sale and franchise operation will have any positive or negative impact on the distribution?<\/li>\n<\/ul>\n<p><strong>Hina Nagarajan &#8211; Managing Director<\/strong><\/p>\n<ul>\n<li>There is no impact on the company and ongoing business.<\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Shirish Pardeshi \u2013 Centrum &#8211; Analyst<\/strong><\/p>\n<ul>\n<li>Given the slump sale, if it will have an impact on employee count?<\/li>\n<\/ul>\n<p><strong>Pradeep Jain &#8211; Chief Financial Officer<\/strong><\/p>\n<ul>\n<li>There are a set of employees that are in the perimeter as the sale is as an undertaking.<\/li>\n<li>Exact numbers cannot be made public.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from United Spirits Limited (MCDOWELL-N) Q4 FY22 Earnings Concall \u00a0 Management Update: MCDOWELL-N expects volatility, temporary import supply constraint and inflationary headwinds to remain in short term, putting pressure on its growth and margins. \u00a0 Q&amp;A Highlights: Avi Mehta &#8211; Macquarie Group &#8211; Analyst EBITDA and working capital impact of the slump sales? [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":125416,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,12],"tags":[8208],"class_list":["post-130756","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-other-industries","tag-brewers-distillers"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":128927,"url":"https:\/\/alphastreet.com\/india\/newgen-software-technologies-limited-q4-fy22-earnings-conference-call-insights\/","url_meta":{"origin":130756,"position":0},"title":"Newgen Software Technologies Limited Q4 FY22 Earnings Conference Call Insights","author":"Praveen","date":"May 5, 2022","format":false,"excerpt":"https:\/\/youtu.be\/KGCQVEOvYGQ Key highlights from Newgen Software Technologies Limited (NEWGEN) Q4 FY22 Earnings Concall Management Update: NEWGEN said that of the 530-odd customers, 38 customers witnessed billing of over INR5 crores in FY22 compared to 26 customers in FY21. 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