There is a presentation on the industry analysis of united spirits Ltd.

1. INDUSTRY ANALYSIS
UNITIED SPIRITS LTD
Prepared By:-
• Naina Shrivastava
• Mehul Ajmani
• Lucky Kotecha

2. TABLE CONTENT
• Overview of the Industry.
• The Main Products of the Industry and the major companies in the
industry with their market share.
• Growth Rate of the Industry and its contribution to the GDP.
• PEST Analysis .
• Porter`s analysis of the Industry.
• Future prospects of the Industry.

3. OVERVIEW OF THE INDUSTRY.
United Spirits Limited is a spirits company engaged in the business of
manufacture, purchase and sale of alcoholic beverages. The Company
operates through two segments: India and Outside India. The India
segment is engaged in the business of manufacture, purchase and sale of
Beverage Alcohol (Spirits and Wines), including through Tie-up units/brand
franchisees within India. The Outside India segment is engaged in the
business of manufacture, purchase and sale of Beverage Alcohol (Spirits
and Wines), including through Tie-up units/brand franchisees outside India.

4. MAIN PRODUCTS AND COMPANIES
Our 21 market model affords each market the flexibility to select the right
portfolio of brands to capture the unique consumer opportunities that exist
in that market and place resources directly against our biggest growth
opportunities.
BRANDS
o Antiquity
o Bagpiper
o McDowell's No.1
o Royal Challenge
o Signature
o Pinky
o Romanov
o White Mischief
o Blue Riband
o Wine Four Seasons
COMPANIES
o United Spirits limited
o United breweries
o Radico Khaitan
o Som Distilleries and Breweries Ltd
o Tilaknagar Industries
o Khoday India
o Jagatjit Industries Limited
o Globus Spirits
o Amrut Distilleries
o Amber Distilleries Ltd

5. GROWTH RATE OF THE INDUSTRY
20%
9%
13%
24%
34%
NET SALES BY REGION (Million)*
1123
522
716
1361
1867
o Diageo is a global leader in beverage
alcohol with an outstanding collection
of brands including Johnnie Walker,
Crown Royal, J&B, Buchanan’s and
Windsor whiskies, Smirnoff, Ketel One
and Cîroc vodkas, Captain Morgan,
Baileys, Don Julio, Tanqueray and
Guinness.
o Diageo is listed on both the London
Stock Exchange (DGE) and the New
York Stock Exchange (DEO), and our
products are sold in more than 180
countries around the world.
o Diageo employs approximately
33,000talented people worldwide with
offices in around 80 countries. We take
this to mean every day, everywhere,
people celebrate with our brands

6. MARKET SHARE
• Date 01/10/2017
• Date 02/10/2017

7. LAST 5 YEAR REVENUE
Year 2013 2014 2015 2016 2017
Revenue from
operations
21616.85 23609.86 22230.38 22679.21 25682.70
Year 2013 2014 2015 2016 2017
Net Income 10597.99 10500.92 9159.39 9240.06 8743.40
Year 2013 2014 2015 2016 2017
Profit After Tax -105.04 -4487.20 -1683.88 986.94 93
----------In Rs.Cr.-----------
----------In Rs.Cr.-----------

8. PEST ANALYSIS
• Ban on direct advertising
• Excise regulations and Licenses
• ‘Regulated’ industry - movement,
prices of intermediate goods
(molasses, ethanol) tightly controlled
- state governments exert
considerable influence.
• Subject to licensing under
Industrial (Development and
Regulation) Act, 1956
• Cap on licensed capacity; special
license for expansion
• Plethora of duties and taxes from
bottling to sales stage; varying from
state to state.
• It is a well-developed - Rs 8,200-
8500 Crores industry in India
• Past growth 12 % CAGR per annum
• Brown spirits - particularly whisky,
rum & brandy account for over 75 %
of this market
• South and North share 60% of
market
• Market size – 20 million cases in 1999
to 84 million cases in 2011
POLITICAL ECONOMICAL

9. PEST ANALYSIS
• Increase in disposable income
• Changing lifestyles of middle class
• Western culture influence
• Changing Trends – Youngsters,
Parties and Celebrations
• Minimum age
• Beer - from 18 to 21
• Hard liquor - from 21 to 25
• In India 40-50 % of all males and 1%
of all females consumed alcohol last
yr.
• 62% drinkers classified as light, 29%
as moderate drinkers and 9% as hard
drinker
SOCIAL

10. PORTER`S ANALYSIS OF THE INDUSTRY
 There are huge complexities and high
regulations to get entry in this
industry.
 The new players need to satisfy the
licensing and need to get approvals
by the states and central
government.
 For international players, the key is
find the right partners and links who
understand the Indian market and
legislations.
 Today with the advancements and up
gradation in the standard of living,
people are becoming more health
conscious and a large chunk of the
population has become aware of the
fact that Liquor is harmful for health.
 For this a lot of people have shifted
their demand from Liquor to juices &
other health drinks.
Major substitutes for Liquor are:
 Soft Drinks
 Non-alcoholic drinks
 Coke
 Pepsi
 Other Health drinks
THREAT OF NEW ENTRANTS THREAT OF SUBSTITUTES

11. PORTER`S ANALYSIS OF THE INDUSTRY
 The Liquor industry has witnessed the
consumers always at a weaker end.
 There is not much bargaining power in the
hands of the consumers in Indian liquor
industry as the prices are set by the forces
of demand & supply and the demand for
liquor here is high as compared to the
supply.
 Hence, the producers are at a beneficiary
end and charge higher prices.
 In India, a liquor brand is identified and is
appreciated only on the basis of it’s higher
price.
 It is an interesting fact that Companies use
“High Price” as one of it’s promotional
strategy to attract the consumers.
 The key raw material for IMFL players
is Molasses which is a by product of
sugar. Molasses is distilled &
processed to form rectified spirit
called Ethanol.
 The players which have primary
distillation facilities in their Plants
directly consume molasses, rest all
have to purchase Ethanol.
 As molasses demand arises only from
ethanol demand, the demand supply
scenario for ethanol determines the
raw material prices for the IMFL
Players
BARGAINING POWER OF CUSTOMERS BARGAINING POWER OF SUPPLIERS

12.  Major players create competition on
the basis of:
• Looks of the liquor bottle
• Pricing the product much higher
• Innovative promotional campaign
 Future plans for the industry depicts
strong growth for the Indian beer
market as the major players like
kingfisher have been quoted saying
that they have significant expansion
plans for the next few years.
 The industry is looking forward for
merger of United Breweries and
SABMiller’s possible future
acquisitions
EXISTING RIVALRY
PORTER`S ANALYSIS OF THE INDUSTRY

13. FUTURE PROSPECTS OF THE INDUSTRY
 The good part is this decline has been because
of losses and doubtful debts and provisioning
made by the company, and none due to
operational issues, a fact already known to the
Street. Analysts thus see this as a tactical
move and, though watchful, they don't see any
meaningful impact on USL's prospects. The
company, too, said that the provisioning is due
to exceptional factors and does not reflect on
its long-term prospects.
 The stock though has lost 4.7 per cent over two
sessions to Rs 2,920. Street sentiments on
USL have been weak for a while, looking at
proposed liquor bans in various states, which
experts believe is not necessary. What also
provides confidence is USL's performance.
After reporting losses in FY15, its performance
has improved in first half of FY16.