United Spirits Ltd Q2 2022 Earnings and Strategy Refresh Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Avi Mehta - Macquarie Research - Analyst : I actually had 2 specific points. One, just following up on what Abneesh said. Could you give us a sense on what levels of ad spend to sales would you target on a steady-state basis? Is there a number that you have in mind? And 2, I mean, if I go through your -- what you highlighted, as we look to break out growth in the prestige segment, I see a lot -- clear focus on accelerating the luxury and upper prestige as you rightly called out. Does that entail a higher dependence or higher partnership with Diageo brands? Is that understanding correct?

Question: Avi Mehta - Macquarie Research - Analyst : That -- if there is a dependence on -- if we are going to enhance that relationship, could you share whether the commercials which we have with Diageo, does that change? Or is that -- what is the -- because I -- when we had initially done the agreement, there was some talk of margins, what level of margins they would be. How is that going to -- is there a number that is available? Or can we kind of have some clarity on how the commercials are? That's all for my side.

Question: Avi Mehta - Macquarie Research - Analyst : Okay. So sorry, it's -- the understanding is that gross margin may not be the right way. It's the EBITDA margin that kind of flows through because of the high realization that comes through. And that is the way I should look at it, correct?