In This Article:
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Overall Volume Growth: 5% increase despite unfavorable weather conditions.
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Premium Volume Growth: 27% increase, driven by Kingfisher Ultra and Kingfisher Ultramax.
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Net Sales: 12% increase in the quarter, 10% year-to-date.
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Gross Margin: 44% in Q2, slightly declining year-over-year but improving from the previous quarter.
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Operational Discipline: Resulting in improved bottom line performance.
Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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United Breweries Ltd (BOM:532478) reported a 5% overall volume growth despite unfavorable weather conditions impacting consumer demand.
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The company saw a significant 27% growth in premium volumes, driven by strong performance from Kingfisher Ultra and Kingfisher Ultramax.
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Net sales increased by 12% in the quarter, supported by both volume growth and a positive price mix impact.
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The company launched a new premium product, 'a grande', designed specifically for the Indian market, which is expected to enhance their premium segment offerings.
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United Breweries Ltd (BOM:532478) maintained strong operational discipline, contributing to bottom-line improvements and achieving double-digit revenue growth for the fifth consecutive quarter.
Negative Points
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The gross margin for Q2 was 44%, slightly declining compared to the previous year, indicating some pressure on profitability.
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The company faced challenges in West Bengal due to recent tax increases, impacting beer prices and potentially affecting growth in the region.
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Weather-related disruptions, such as heavy rains and floods, significantly impacted transportation and availability in key markets like Andhra Pradesh and Kerala.
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Operational issues in certain states, such as regulatory delays and portal malfunctions, affected the company's ability to supply products efficiently.
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The company acknowledged that the premium growth might put pressure on margins in the short term as they invest in expanding their premium offerings and local production capabilities.
Q & A Highlights
Q: How do you view the impact of recent tax increases in West Bengal on beer prices and growth? A: Vivek Gupta, CEO: The steep increase in beer duty has raised consumer prices significantly, impacting growth. We are working with the Beer Association of India to share data with the government, hoping to mitigate these effects. Additionally, we are accelerating our premium efforts in West Bengal, where our premium market share is currently low.