Company Update : United Breweries Ltd By Motilal Oswal Financial Services Ltd
In-line revenue; cost efficiencies drive beat on operating profit
* UBBL’s standalone net sales grew 9% YoY to INR23.2b (est. INR23.4b).
* Volume growth was 5% YoY (est. 8%), with premium segment volume surging 24% YoY.
* North, West, East and South region reported 3%, 11%, 0% and 5% volume growth, respectively.
* Gross margin was up 40bp YoY at 42.1% (est. 41.7%, 43.1% in 3QFY25).
* Employee expenses grew 9% YoY and other expenses rose 5% YoY.
* EBITDA margin expanded 140bp YoY to 8% (est. 6.2%, 7.1% in 3QFY25).
* EBITDA increased by 31% YoY to INR1.9b (est. INR1.4b).
* APAT rose 21% YoY to INR974m (est. INR855m).
* In FY25, net sales, EBITDA and APAT grew by 10%, 21% and 14%, respectively.
Other key highlights
* Net sales were driven by volume growth, price increase and positive mix.
* Volume growth was mainly driven by Andhra Pradesh, Uttar Pradesh, Maharashtra and Assam, partially offset by Telangana and Karnataka.
* Positive price mix was driven by price increases in Telangana, Orissa and Rajasthan, coupled with a favorable mix mainly from premiumization.
* The company remains focused on revenue management and cost optimization initiatives to support margin improvement, while continuing to invest in brand building and capability enhancement—despite nearterm margin pressures ahead of capacity expansion completion.
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