United Spirits Stock Falls After Water Bill Dispute Notice

United Spirits’ Nanded unit received a notice from the Irrigation Department – Nanded (North) demanding ₹345 crore in water bill arrears. The notice threatens to cut water supply if the dues aren't paid within seven days.

Shares of United Spirits Limited saw a nearly 1% decline, trading at ₹1,163 per share during early market activity on May 22. The dip has been followed by the receipt of a notice from the Maharashtra Water Resources Department demanding the payment of water charge arrears amounting to ₹345.45 crore.

The notice pertains to the potential cessation of water supply under Section 49(J) of the Maharashtra Irrigation Act, 1976. The notice issued by the Irrigation Department – ​​Nanded (North) requires United Spirits to resolve the outstanding dues within seven days to avoid cessation of water supply.

United Spirits, a subsidiary of Diageo, has challenged the increased tariff imposed on its Nanded unit by filing a writ petition with the Bombay High Court, which has resulted in the matter being sub judice. The company is currently in the process of responding to the notice and evaluating its options.

Despite receiving the notice, United Spirits has stated that it does not foresee any financial impact beyond what has already been accounted for or disclosed as contingent liabilities in its financial statements. The delay in addressing the notice was due to the company's thorough assessment of the order and its implications.

United Breweries in its latest quarterly results reported an increase in net profit, soaring over five times to ₹80.15 crore for the January-March period of the 2023-24 fiscal year. This marks a substantial rise from the ₹13.05 crore net profit recorded during the same period in the previous fiscal year, 2022-23.

The company's revenue from operations also saw a notable increase, rising by 17% to ₹4,788.68 crore in the last quarter of FY24.