French firm Pernod Ricard said it grew sales by 1% in India during nine-months ended March on a high comparable base but the country’s lockdown softened its growth during the quarter.
“India has solid mid-single digit growth until February but nation wide lockdown imposed on 24th of March led to softening of third quarter performance,” Pernod Ricard’s finance head Helene de Tissot said at an investor call.
The maker of Absolut vodka and Chivas Regal Scotch had grown 19% for the nine months which ended last year in March. India, US, China and global travel retail are the four “must-win” markets for the Paris-headquartered company. In India, it gets a significant chunk from premium and semi-premium brands, mainly Royal Stag and Imperial Blue.
“We continued very strong growth of strategic international brands and good resilience of Seagram’s whiskey portfolio and Jacob’s Creek and strong pricing of.
“For March quarter for United Spirits, we expect 4% volume decline and 2.5% revenue dip and there is likely to be downward risk to our numbers seeing Pernod’s numbers,” said Abneesh Roy, senior vice president at Edelweiss Securities.
Pernod Ricard is also facing pressure on its margin, linked to adverse product mix and a negative growth in terms of cost of goods sold, especially in grain neutral spirits. However, it has seen positive impacts of tax reform in India, it said.