United Breweries Ltd (UBL) reported on Tuesday a decline in its consolidated net profit by 9.64 percent, amounting to 166.28 crore rupees for the June quarter of the fiscal year 2027. This decrease was attributed to increased expenses and the impact of the Middle East conflict on the company's margins.
According to regulatory filings, the company, which is under the control of the Dutch multinational brewing corporation Heineken NV, earned a net profit of 184.03 crore rupees in the same quarter last year (April-June).
Nevertheless, UBL's operating revenue in the June quarter of FY27 increased by 10 percent, reaching 5,919.44 crore rupees compared to 5,380.78 crore rupees the previous year. UBL noted that the growth was driven by the beer category, which continued to show double-digit growth.
In its earnings report, UBL indicated that the company's sales volumes grew by 9%, and realization volumes grew by 13% in the first quarter of FY27. Furthermore, a targeted measure to reduce inventory levels by 20% was taken to improve cash flow.
The company's net sales grew by more than 7 percent due to increased volumes and higher prices, as well as favorable geographical distribution, although this was partially offset by changes in the procurement structure.
The company reported that premium volumes increased by 17 percent, excluding two states where conscious steps were taken to mitigate the effects of the war. Overall, premium volumes across India grew by 7%, with Heineken Silver increasing by 28% and Kingfisher Ultra by 11%.
Thanks to efforts made over the past two years to localize production and improve execution, the premium segment margin became profitable for the first time, despite a 300 basis point decline in gross profit margin due to the Middle East war.
UBL's total expenses reached 5,745.66 crore rupees in the June quarter of FY27, representing an increase of 11.7 percent. The company's total income, including other receipts, also rose by 10.7 percent in the June quarter, reaching 5,970.15 crore rupees.
Regarding prospects, CEO and Managing Director Vivek Gupta stated: 'We expect inflationary pressure on our cost base to persist in the coming quarters amid an uncertain macroeconomic environment.' He added that the company maintains a focus on disciplined pricing, careful cost management, and productivity enhancement to protect margins while continuing to invest in long-term business growth.
