United Breweries surges 10% on hopes of healthy revenue in March quarter

Heineken N.V., the promoter group, said that India net revenues grew by 20 per cent organically in the January to March quarter

Shares of United Breweries hit a new high of Rs 2,045.6, surging 9.7 per cent on the BSE in Wednesday's intraday trade, after Heineken N.V., the promoter group, said that India net revenues (before exceptional items and amortisation of acquisition; beia) grew by 20 per cent organically in the January to March quarter, driven by volume and positive price mix.

Beer volume grew in the low-teens, ahead of the market estimate, cycling route-to-market changes from last year, Heineken N.V. said in a statement provided for the January-March 2024 quarter trading update.

The premium portfolio grew in volume in low twenties, led by Kingfisher Ultra and Heineken Silver, it added.

 

United Breweries (UBL), part of the Heineken group, is the largest beer manufacturer in India. The company produces and markets packaged drinking water and soda, internationally recognised beer, and non-alcoholic beverages.

Its diverse product portfolio comprises brands such as Kingfisher Strong, Kingfisher Premium, Kingfisher Ultra, Kingfisher Ultra Max, Kingfisher Ultra Witbier, Kingfisher Storm, Heineken, Heineken Silver, Amstel, and Heineken 0.0., Kingfisher Premium Water and Kingfisher Soda.

Meanwhile, the board of directors of UBL is scheduled to meet on May 7, 2024 to consider financial results for the quarter and year ended March 31, 2024.

The management, while announcing December quarter results on February 8, had said that they remain optimistic about the long-term growth potential of the industries, driven by increasing disposable income, favorable demographics and premiumisation.

Analysts at Elara Capital said UBL's volume may increase 9 per cent year-on-year (Y-o-Y) in the March quarter as the company has likely gained market share in certain states in North India.

Profitability-wise, the brokerage expects gross margin to be stable quarter-on-quarter (Q-o-Q) due to steady barley and glass prices, whereas Ebitda margin may improve 100bps Q-o-Q to 9 per cent, much below pre-Covid levels (13.4 per cent in FY20), as the company continues to invest in supply chain initiatives and higher end portfolio to drive better volume growth in the premium portfolio, the brokerage firm said in their quarterly review report.