United Breweries (532478) Q1 26/27 earnings summary

Executive summary

• Industry growth reached 13% year-over-year, with sell-in volumes up 9% and sell-out volumes up 13%, driven by premiumization, regulatory reforms, and deliberate 20% inventory reduction to strengthen cash flow.

• Net sales increased by 7% year-over-year, despite significant cost shocks from the Middle East conflict impacting packaging, logistics, and FX.

• Premium portfolio margins became accretive for the first time, with premium volumes up 17% (excluding targeted interventions), led by Kingfisher Ultra and Heineken Silver (+28%).

• Brand power reached a 24-month high, supported by ongoing investments in innovation and network optimization.

• Structural improvements included closure of the Punjab brewery, commissioning of a new can line in Telangana, and partnership transitions.

Financial highlights

• Gross margin was 41%, down 155 bps year-over-year, with an estimated 300 bps impact from the Middle East conflict.

• EBITDA margin reached 10.9% (down 35 bps YoY), improving from 6.5% in the previous quarter.

• Net profit attributable to equity shareholders was ₹16,633 lakhs, down from ₹18,387 lakhs year-over-year; PAT margin at 5.4%.

• Free operating cash flow improved by 38% to ₹548 crore, supported by disciplined working capital management.

• Recovery program delivered over INR 50 crore through pricing, procurement, and productivity measures.

Outlook and guidance

• Double-digit revenue growth ambition for FY2027, led by high single-digit volume growth and premiumization.

• Management expects inflationary pressures to persist and will focus on disciplined pricing, cost management, and productivity to protect margins.

• Structural policy shifts in key states expected to materially impact pricing, access, and profitability.

• Margins expected to expand over time, with ongoing focus on pricing, cost management, and productivity.

• The company remains committed to innovation, portfolio strengthening, and advocating for supportive industry policies.