United Spirits (UNSP) has value market share of ~50% in spirit market, robust portfolio across price points, strong sales network, wide manufacturing footprint and access to parent (Diageo) products in its portfolio.

With Diageo management settled in, UNSP is aggressively working on renovation and purpose led marketing which has resulted in improving market share for premium portfolio (51% of volumes and 67% of sales). In non-premium portfolio company has largely franchised out low profitable volumes to protect its gross profit and reduce its working capital.

Continuous efforts to drive cost efficiencies and productivity – optimizing employee strength and manufacturing footprint, glass bottle and ethanol outsourcing, etc. Targeted market activation strategy for premium portfolio and franchise route for non-premium portfolio will boost operating profits and RoCE on sustainable basis.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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