United Breweries Ltd. Declares Q1 FY26 Results
United Breweries Ltd. has declared its Q1 FY26 results, with the company posting a largely in-line set of numbers. The volume growth trend continues to be healthy, with market share gains both at an overall basis and in the premium segment.
The company’s Q1 FY26 results show 11% volume growth on top of 5% volume growth in the base quarter, which in turn is on a base of 12% volume decline in Q1 FY24. This means that there has been marginal growth in summer season volumes over a three-year period.
Key Highlights
- Largely in-line Q1 FY26 results
- Healthy volume growth trend continues
- Market share gains in the premium segment
- Weak profitability in a crucial quarter may impact full-year profitability in FY26
Nirmal Bang has reduced its FY26 Ebitda forecasts while remaining optimistic about healthy improvement in FY27 on a weak base of the preceding years.
Structural Investment Case
Nirmal Bang likes the structural investment case for United Breweries not only for its immense opportunity for growth but also for the management’s investments in adding brewing capacity for premium brands in key states, adding significant capacities overall, investment in visi-coolers, and spending more on marketing.
The company’s better disclosures in the latest annual report on volumes and brand-wise premium volume growth are heartening, as are its investments in supply chain, digital transformation, and leadership development. The improvement in the operating environment/reforms in several states is also noteworthy from a structural perspective.
Valuation
Valuations on FY27 numbers are fair for now at ~39x FY27E EV/Ebitda, which does not leave significant room for upside. Nirmal Bang maintains the target multiple at 40x on Jun-27E Ebitda with an unchanged target price of Rs2,195, thereby maintaining its Hold rating on the stock.
Click on the attachment to read the full report.
