In This Article:
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Volume Growth: 8% overall volume growth, with a 33% increase in trading volumes, driven by the Ultra portfolio.
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Net Sales: Increased by 10% for the quarter and year-to-date, supported by price increases and premiumization.
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EBIT: INR90 crore, significantly lower than the previous year due to continued investments and exceptional costs.
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Exceptional Costs: INR26 crore incurred in Q3 related to a productivity program.
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Investment in Uttar Pradesh: Announced a major investment in a greenfield brewery to meet future capacity requirements.
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Price Increase in Telangana: 15% price increase to improve profitability, though consumer impact is high.
Release Date: February 14, 2025
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 an 8% overall volume growth in Q3, driven by broad-based growth across EMEA and positive policy changes in states like Andhra Pradesh.
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The company gained market share overall and in the premium segment, with trading volumes growing 33%, particularly in the Kingfisher Ultra and Kingfisher Ultra Max portfolios.
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United Breweries Ltd (BOM:532478) launched Amstel Grande and Kingfisher flavors, receiving promising consumer responses, indicating potential for future growth.
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The company announced a major investment in a greenfield brewery in Uttar Pradesh, aiming to meet future capacity requirements and capitalize on category growth.
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A productivity program was implemented in Q3, expected to deliver annual growth savings of around INR50 crore by 2025, enhancing efficiency and competitiveness.
Negative Points
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EBIT for the quarter was INR90 crore, significantly lower than the previous year, due to continued investments in the organization and supply chain.
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The company incurred a one-time exceptional cost of INR26 crore in Q3 related to the productivity program.
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Despite a 15% price increase in Telangana, operations remain EBIT negative, highlighting ongoing profitability challenges in the state.
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Karnataka faced a 30-35% category decline due to excise duty changes and label approval delays, impacting sales.
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The company experienced disruptions in January due to policy changes and supply halts in states like Telangana and Odisha, affecting overall performance.
Q & A Highlights
Q: Even after a 15% price increase, will your Telangana operations remain EBIT negative? A: Yes, at an operating level, we are slightly okay without overhead costs. We expect further improvements in the near future as we continue discussions with the government for additional pricing adjustments. - Vivek Gupta, CEO