NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
United Breweries Ltd. delivered revenue growth of 12% YoY (estimate: 10%). Volume growth was at 5% YoY (estimate: 7%), partially impacted by unfavorable weather conditions across several states. The Premium portfolio continued to deliver strong performance, posting a 27% YoY growth (44% in Q1 FY25).
The North, West, and South regions reported 12%, 12%, and 1% volume growth, respectively. However, the East region declined 6% YoY. The volume growth was driven by states such as UP, Rajasthan, Maharashtra, Karnataka, and Telangana. Meanwhile, West Bengal, Delhi, and Tamil Nadu exhibited weak performance.
Gross margin contracted 70bp YoY but expanded 100 bp QoQ to 43.8% (estimate 44.3%), led by product mix and cost initiatives. Cost control, local production initiatives, and product mix led to 100bp YoY expansion in Ebitda margin to 10.7%.
The company remains focused on volume-led growth along with share gain in the premium portfolio. It has introduced Amstel Bier in India to further improve its footprint in the premium segment. The initial launch will be in Maharashtra.
We model 12% revenue CAGR during FY24-27E led by high single-digit volume growth. We model Ebitda margin of 12-13% for FY26/FY27 (16-17% in FY18/FY19).
We value the stock on 55 times Sep’26E EPS to derive a target price of Rs 1,950 (maintain). With limited downside in the stock, we upgrade our rating from Sell to Neutral.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
As a Subscriber you get
Stories
RECOMMENDED FOR YOU
ITC Q2 Results Review - Growth Sustains; Margin Stressed: ICICI Securities
Oct 25, 2024
Birlasoft Q2 Results Review - Long Term Growth Story Remains Intact: IDBI Capital
Oct 24, 2024
Amber Enterprises Q2 Results Review - Strong Growth Momentum To Sustain In H2 And Beyond: Systematix
Oct 23, 2024
Heineken's Premium Beer Volume Rises 4.5% In September Quarter
Oct 23, 2024
POPULAR