United Breweries (532478) Q1 25/26 earnings summary

Executive summary

• Net sales grew 16% year-over-year in Q1 FY26, driven by 11% volume growth and strong premiumization, with premium segment volumes up 46% led by Kingfisher Ultra, Amstel/Anglo Grande, and Heineken Silver.

• EBIT increased 10% year-over-year, with margin at 9%, and profit after tax rose 6%.

• Continued investments in brand, supply chain, cold storage, and commercial assets, with capex at Rs. 136 Cr in Q1 FY26.

• Faced operational challenges including supply chain bottlenecks, can shortages, and state-level regulatory headwinds.

• Strategic closure of the Mangalore unit and investments in the Mysore brewery aimed at optimizing supply chain and capacity.

Financial highlights

• Net sales reached Rs 2,862 Cr, up from Rs 2,473 Cr in Q1 FY25, with gross profit at Rs 1,218 Cr and gross margin at 42.5% (down 50 bps year-over-year).

• EBITDA was Rs 321 Cr (11.2% margin), EBIT Rs 259 Cr (9.0% margin), and profit after tax Rs 184 Cr (6.4% margin).

• Standalone net profit for Q1 FY26 was Rs. 18,371 Lakhs, with EPS at Rs. 6.95.

• Finance costs increased significantly, up 603% year-over-year.

• Premium business contributed significantly to growth, but margin expansion remains a long-term objective.

Outlook and guidance

• Management remains optimistic about long-term growth, citing favorable demographics, rising disposable income, and premiumization.

• High single-digit volume growth expected for the rest of the year, contingent on policy and can supply improvements.

• Price/mix growth of 4-5% anticipated, with premiumization continuing to drive performance.

• Medium-term target remains double-digit EBITDA margin, with sequential improvements expected.

• Continued investments in brands and capabilities, with margin accretion targeted through revenue management and cost initiatives.