Premium portfolio drives growth, but weak realisations, rising costs and Middle East disruptions weigh on earnings and stock sentiment
United Breweries reported a mixed performance for the March quarter (Q4FY26), with volumes rising 4.1 per cent year-on-year to about 54 million cases, supported by steady demand in key markets and continued momentum in its premium offerings.
The premium segment remained a bright spot, with volumes increasing around 16 per cent year-on-year, driven by strong traction for brands such as Kingfisher Ultra, Kingfisher Ultra Max and Heineken Silver.
Despite the volume growth, net sales declined nearly 3 per cent year-on-year to Rs 2,247.8 crore, weighed down by lower realisations owing to an unfavourable sourcing mix.
Operating performance remained under pressure, with Ebitda falling close to 25 per cent year-on-year to Rs 139 crore. Margins also narrowed sharply by 183 basis points to 6.2 per cent, as elevated operating costs offset the benefits of premiumisation and price increases.
Net profit for the quarter was largely unchanged at Rs 97.2 crore compared to Rs 96.6 crore in the year-ago period, although it improved sequentially from Rs 81.4 crore.
The management attributed the pressure on margins to higher spending on advertising and promotions, increased bottle and packaging costs, and elevated freight expenses. Additionally, operating leverage weakened during the quarter, further dragging earnings, it said.
The management said the geopolitical disruptions in the Middle East have pushed up input, packaging, and logistics costs, while also impacting export realisations.
Shares of United Breweries fell sharply, dropping 5 per cent on the BSE on Wednesday to hit a 52-week low of Rs 1,383 apiece. The decline came after the company warned of continued pressure on profitability in the coming quarters due to the ongoing Iran war, which is expected to keep input and logistics costs elevated in the near term.
At 11.20 am, the stock was trading 3.5 per cent lower on the BSE, underperforming the benchmark BSE Sensex, which was up 0.2 per cent, as investors reacted to margin concerns and cautious management commentary on the outlook.
