United Breweries (532478) Q3 25/26 earnings summary

Executive summary

• Delivered resilient performance in Q3 and Q4 FY2025/FY26 with improved margins and continued premium growth, despite industry headwinds from weather and affordability challenges.

• Achieved highest gross margin in three years, supported by operational efficiencies, favorable state mix, and premium localization.

• Launched Kingfisher Smooth in January 2026 and expanded presence in the strong beer segment, with accelerated rollout in Rajasthan and Karnataka.

• Continued investments in brand building and innovation, with brand power at a three-year high.

• Strategic productivity and cost efficiency programs launched to drive margin expansion and enable reinvestment for future growth.

Financial highlights

• Net sales grew 4% year-over-year in Q3 and Q4, driven by price increases, premiumisation, and favorable state mix; YTD net sales growth at 6%.

• Gross margin reached 45.3% in Q3 and Q4, up over 220 basis points from the previous year; YTD gross margin at 43.4%.

• EBIT grew 86% sequentially and year-over-year in Q3 and Q4, reflecting recovery and margin expansion.

• Profit after tax in Q3 FY26 surged 111% to Rs 81 Cr, but YTD profit after tax declined 9% year-over-year.

• Realization growth of nearly 5% this quarter, split evenly between price and mix.

Outlook and guidance

• Continued focus on premiumization, brand portfolio strengthening, and advocacy for equitable beer taxation.

• Management targets long-term industry volume growth of 6%-7% per year, though short-term headwinds persist.

• Productivity and cost effectiveness programs to deliver 3%-6% gross savings over FY2026–2028, with significant reinvestment into growth and innovation.

• Optimism for long-term beer category growth, supported by rising disposable income, favorable demographics, and premiumization.