United Breweries Q2 Results: Profit Rises 23%, Beats Estimates
The total volume increased 5%, with a remarkable 27% growth in the premium segment, driven by popular brands like Kingfisher Ultra and Heineken Silver.
(United Breweries is the maker of the popular Kingfisher brand of beer. Image Source: company website)
United Breweries Ltd.'s consolidated net profit jumped 23% in the second quarter of this financial year, beating analysts' estimates.
The beer maker recorded a profit of Rs 132.3 crore for the quarter ended September, compared to Rs 107.2 crore in the same quarter of the previous fiscal, according to an exchange filing on Thursday. This was above the Rs 125-crore estimate by analysts tracked by Bloomberg.
The company, controlled by Dutch multinational brewing company Heineken NV, saw a 13% increase in revenue for the three months ended September, reaching Rs 2,116.7 crore. Analysts had projected revenue of Rs 2,068 crore.
Operating income, or earnings before interest, taxes, depreciation, and amortisation, rose 23% to Rs 227.2 crore. The Ebitda margin expanded to 10.7% from 9.8% in the same period the previous year. Analyst estimates for Ebitda and Ebitda margin tracked by Bloomberg were Rs 222 crore and 10.70% respectively.
Total volume increased 5% in the second quarter with an overall volume growth of 27% in the premium segment, led by strong growth from Kingfisher Ultra, Kingfisher Ultra Max, and Heineken Silver, the company said in the exchange filing. This comes despite unfavourable weather in the quarter and was driven by the North and West regions.
"We remain optimistic about the industry's long-term growth potential, driven by increasing disposable income, favourable demographics and premiumisation," the company said in its earnings statement.
New Additional Director
The board of directors of United Breweries also approved the appointment of Rajan Ramdas Pai as an additional director, designated as a non-executive independent director. The appointment will come into effect from Oct. 24. Pai will hold the position for a period of five years.
Shares of United Breweries closed 0.62% lower at Rs 1,978.45 apiece on the NSE, compared to a 0.28% decline in the benchmark Nifty 50. It has risen 24.10% in the last 12 months and 10.36% on a year-to-date basis.
Out of the 16 analysts tracking the company, seven have a 'buy' rating on the stock, three recommend 'hold' and six suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies a potential upside of 5.5%.
