India's top beer seller United Breweries posts fall in profit as consumers tighten spending

United Breweries

13/02/2025 15:36

Feb 13 (Reuters) - United Breweries  UBBW.NS , the largest beer seller in India, reported a 25% fall in
its profit for the third quarter on Thursday, as inflation-wary consumers cut back on spending on its cheaper
brands.
    The Kingfisher beer-maker's standalone profit before exceptional items and tax fell to 867.3 million rupees
($9.99 million) in the quarter ended December, compared to 1.16 billion rupees a year ago.
    During the quarter, the company incurred a one-time payment of 257.6 million rupees on account of severance
pay to certain employees.
    The company, majority-owned by Netherlands-based Heineken  HEIN.AS , reported a near 7% rise in revenue to
4.42 billion rupees. This was slower than the 13% growth recorded in the previous three months and 12% in the
corresponding quarter last year.
        
KEY CONTEXT
    Persistently high inflation has forced urban consumers with relatively low disposable incomes to rein in
their discretionary spending, although the more affluent consumers continue to splurge.
    To cash in on the trend, United Breweries launched a new higher-priced beer, Amstel Grande, in this
financial year, which helped drive sales in the reported quarter. It was also aimed at fending off competition
from  Anheuser-Busch InBev's  ABI.BR  Budweiser Magnum and Carlsberg  CARLb.CO  Elephant.
    Last month, United Breweries was also at odds with Telangana, briefly halting its supply to one of India's
top beer-consuming state due to delayed payments and a lack of government approval for price increases since
2019/20.
    
PEER COMPARISON
    
                          Valuation (next 12     Estimates (next 12            Analysts' sentiment          
                                months)               months)                                             
                  RIC        PE      EV/EBITD    Revenue      profit      Mean      # of      Stock to     Div
                                        A      growth (%)   growth (%)   rating   analysts  price target  yield
                                                                                                           (%)
 United         UBBW.NS     65.22     42.47       13.10       44.46       HOLD       12         1.00      0.49
 Breweries                                                                                                
 United         UNSP.NS     59.54     40.01       10.93       17.41       BUY        13         0.88      0.65
 Spirits                                                                                                  
 Radico         RADC.NS     62.16     37.64       12.98       41.04       BUY        6          0.88      0.14
 Khaitan                                                                                                  
 Tilaknagar     TILK.NS     26.15     17.77       -0.81       -7.58      STRONG      1          0.54      0.18
 Industries                                                               BUY                             
 
* The mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT
    
    
OCTOBER TO DECEMBER STOCK PERFORMANCE
    
    
    
 -- All data from LSEG
 -- $1 = 86.8230 Indian rupees

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UNITED BREWERIES STOCK PERFORMANCE OCT-DEC    https://tmsnrt.rs/4jVmcIQ
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 (Reporting by Praveen Paramasivam in Chennai and Ashna Teresa Britto in Bengaluru; Editing by Leroy Leo)
 ((Praveen.Paramasivam@thomsonreuters.com; +91 867-525-3569;))