Image: Shailesh Andrade/Reuters Anand Kripalu, MD and CEO of USL
India’s largest liquor manufacturer United Spirits Limited (USL) posted a loss of Rs 104 crore in the just concluded fourth quarter of fiscal 2017.
The loss was on account of an “exceptional charge” of Rs 291 crore towards a customer claim arising out “legacy commercial terms”, said USL in a release to the bourses, on Tuesday. The company did not disclose who the customer was. In the same period a year ago, USL had posted a profit of Rs 1.4 crore.
The company said that its profit before tax before exceptional items in the January to March period of FY17 stood at Rs 153 crore. Total income from operations in the period under review stood at Rs 6,485.2 crore as compared with Rs 5,937.3 crore in the same year ago period, a growth of 9.22 percent.
For the financial year 2017, USL posted a 4 percent sales growth and a profit of Rs 170 crore, (including the exceptional charge), registering a 39 percent growth over the previous year.
“We have delivered a strong set of results with a 4 percent net sales growth, despite a subdued economic environment due to de-monetization as well as the run up to the highway ban,” said Anand Kripalu, CEO, USL.
“We have faced changes in the regulatory environment in certain states. Tax and excise levies in Maharashtra and West Bengal have led to sharp consumer price increases and the route to market in Punjab continues to impact performance,” added Kripalu.
While the long term consumer opportunity remains strong for the liquor industry, Kripalu said that there would be a “short term impact” arising out of the highway ban on alcohol. Meanwhile, he said that while alcohol for human consumption has been excluded from GST, “the additional tax on input materials and services will result in stranded taxes, and impact margins.”