INSUBCONTINENT EXCLUSIVE:
Mumbai/Kolkata: United Spirits' crorepati club has shrunk nearly 10% in a year in which the country's largest spirits maker saw overall
market fall 3% due to regulatory changes.
A total of 51 executives at United Spirits (USL) took home more than Rs 1 crore in salary in the
The average increase in remuneration for all employees also fell to 5.3% during FY17-18 compared to 6.3% a year ago
Since 2014 when British liquor giant Diageo took full control of USL, the maker of Mcdowell's and Antiquity whiskey has been seeing
consistent employee exits every year
Permanent employee base has fallen to 4427 during FY17-18, shrinking by more than a third compared to 6797 people, according to the latest
financial report.
Experts see this as a positive sign as the company consolidated manufacturing and distribution over the past few years to
cut costs.
"The exits must be a healthy mix of voluntary and involuntary separations which is expected and essential when Diageo is trying
to bring in changes in the way USL has been working in the past," said A Ramachandran, senior partner, EMA Partners India
maker of Johnnie Walker Scotch and Smirnoff vodka, bought a controlling stake in USL from Mallya in July 2013 and later raised its holding
The company has been changing its business from having a largely mass market portfolio earlier to premium ones that earn higher margins
For instance, just years ago, the contribution of its 'prestige and above' business were 50% of the net sales which has risen to nearly 63%
With USL's efforts on reducing interest costs and monetising non-core assets, the company posted a 23% increase in profit after tax even
despite a 13% drop in sales volume
Over the past three years, the company's manufacturing footprint has come down to 58 from 88 earlier
"The management indicated that there is not a lot of scope for margin expansion remaining
We believe this guidance could potentially disappoint investors," said a recent Goldman Sachs report.
