United Breweries Q1FY26 Results: Premium Push Lifts Profit by 6%, ₹10 Dividend Announced

Mumbai, 23 July 2025: United Breweries Ltd (UBL) has reported a 6% year-on-year rise in standalone net profit for Q1FY26, reaching ₹18.37 crore from ₹17.33 crore in the same quarter last year. The growth came despite a revenue dip, thanks to rising demand in the premium beer segment. The company has proposed a final dividend of ₹10 per share for FY25, amounting to ₹264.41 crore, subject to shareholder approval.

Stock Performance

Following the Q1FY26 earnings announcement, United Breweries Ltd’s share price rose by 1.62% to ₹2,068.80 as of 9:26 AM IST on 23 July 2025, reflecting positive investor sentiment. The stock opened at ₹2,089.90 and touched an intraday high of ₹2,110.00 before settling lower. The rise in profit and strong premium segment performance likely contributed to the uptick. The company’s Q1 earnings call is scheduled for 3:00 PM IST later today.

Premium Beer Volumes Surge, Driving Profit Growth

UBL recorded 11% growth in overall sales volumes in Q1FY26, with premium offerings such as Kingfisher Ultra, Heineken® Silver, and Amstel Grande leading the charge. Premium beer volumes alone jumped 46%, significantly aiding profitability. Despite a 7.4% year-on-year decline in revenue from operations to ₹5,37,888 lakh, the company managed to deliver strong bottom-line performance.

EBITDA stood at ₹31,030 lakh, a 6.9% year-on-year increase, while net profit grew 6.0%. This was supported by improved operating margins, higher realisations, and cost discipline. On a quarter-on-quarter basis, net profit surged 88.7%, reflecting favourable seasonality and better execution.

Profit Margins Steady Despite Gross Margin Contraction

Although gross profit margin narrowed by 50 basis points to 42.5%, EBIT margin rose to 9.0%, supported by strategic pricing and improved product mix. The company’s earnings per share (EPS) improved to ₹6.95 in Q1FY26 from ₹6.55 in Q1FY25, indicating healthy returns for shareholders.

Segment Performance Reflects Strategic Shift

Beer continues to dominate UBL’s revenue profile. However, despite the segment declining 7.4% year-on-year in value terms, the company gained market share due to higher premium sales. The non-alcoholic beverages segment remained marginal but posted a 15.4% growth, showing potential in niche categories.

Expansion and Consolidation Signal Long-Term Play

UBL invested ₹136 crore in Q1FY26 to strengthen its supply chain and commercial capabilities-an increase of ₹89 crore compared to the same quarter last year. The company also consolidated operations by closing its Mangalore unit and expanding capacity at its Mysore brewery. This is expected to boost efficiency and lower costs in the coming quarters.

Amstel Grande’s strong performance in Maharashtra, West Bengal, and Uttar Pradesh led to its rollout in Karnataka during the quarter.

Final Dividend of ₹10 Reflects Financial Stability

The company has proposed a final dividend of ₹10 per equity share for FY25, amounting to a total payout of ₹26,441 lakh. This reflects management’s confidence in the company’s consistent cash flows and long-term financial health.

Consolidated Performance Indicates Steady Momentum

On a consolidated basis, revenue dropped 7.4% to ₹5,38,078 lakh, while profit after tax rose 5.9% to ₹18,403 lakh. Consolidated EBITDA improved 6.7% to ₹31,081 lakh. The consolidated EPS stood at ₹6.95, marginally higher than ₹6.56 in the previous year, underscoring stable performance across operations.

Legal Disputes May Impact Future Liabilities

UBL continues to contest a ₹75,183 lakh penalty imposed by the Competition Commission of India. ₹17,707 lakh has been deposited under protest. The Supreme Court has currently stayed the recovery process pending final judgment.

Separately, the company is involved in a legal dispute over land at its Bihar facility. The land, valued at ₹6,144 lakh, is under litigation regarding lease cancellation by BIADA. However, its fair valuation remains upheld.

Key Financial Metrics Show Premium Strength but Below-Par Efficiency

United Breweries’ market capitalisation stands at ₹54,864.1 crore. Its PE ratio of 121.4 and price-to-book ratio of 13 are well above industry averages, reflecting strong investor interest but stretched valuations, as seen in its high PEG ratio of 117. Institutional holdings rose slightly to 24.26%.

Revenue grew 15.7% year-on-year this quarter, though trailing 12-month growth was slower at 11.8%. Net profit growth was modest-5.9% for the quarter and 1% for the TTM. Quarterly operating profit margin stood at 10.9%, dipping to 9.3% over TTM-both below industry standards.

With a Piotroski Score of 5, the company shows average financial health. ROE and RoA stood at 10.1% and 5.4% respectively. The stock underperformed the Nifty50 by 10.7% and its sector by 8% over the past quarter.

Management Outlook Focused on Long-Term Growth

Vivek Gupta, Managing Director of United Breweries Ltd, highlighted the company’s continued focus on premiumisation, supply chain strengthening, and regional product expansion. He said that with robust capital investments and strategic consolidation, UBL is well-placed for sustainable long-term growth in an increasingly competitive market.

United Breweries is India’s leading beer manufacturer with popular brands like Kingfisher and Heineken. Listed on both NSE and BSE, the company maintains a wide manufacturing and distribution presence across the country. UBL continues to focus on expanding its premium portfolio while enhancing operational efficiencies.

REF:https://www.bseindia.com/xml-data/corpfiling/AttachLive/64ca447c-67c2-4cd5-891a-f08ea41bae1d.pdf

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations