The decision is attributed to financial losses stemming from TGBCL’s failure to revise the basic price of beer since 2019-20 and significant overdue payments for past supplies
As United Breweries confirmed the suspension of beer supplies to the Telangana Beverages Corporation or TGBCL, the shares of the company dropped four per cent on 8 January. The decision to suspend the beer supply has been attributed to significant overdue payments for past suppliers and the financial losses arising due to the failure of TGBCL to revise the basic price of beer since 2019-20
TGBCL, a government-owned monopoly in alcohol wholesale and retail vending in Telangana, was cited as a major contributor to the losses, United Breweries stated in a stock exchange filing.
Following the announcement, United Breweries’ shares fell to an intraday low of Rs 1,988 apiece, down from the previous close of Rs 2,074. The stock is now trading nearly 10 per cent below its 52-week high of Rs 2,202.
In the second quarter of the current financial year (FY25), the company posted a 23 per cent year-over-year increase in net profit to Rs 132 crore. Its EBITDA rose 21 per cent to Rs 237 crore, while net sales grew 12 per cent to Rs 2,115 crore. Earnings results for the third quarter (October-December) are yet to be released.
