United Breweries Q3 Results: Revenue Jumps 10% on Premium Beer Demand

Introduction to Q3 Performance

United Breweries Limited (UBL) announced its financial results for the third quarter of fiscal year 2025, ending December 31, 2024. The company reported a robust 10% year-on-year increase in total revenue, reaching ₹4,436.69 crore. This growth was primarily fueled by strong performance in its premium beer segment and favorable price-mix dynamics. However, strategic investments in supply chain enhancements and organizational capabilities led to a decline in net profit for the quarter.

Detailed Financial Breakdown

In Q3 FY25, UBL's total revenue from operations grew to ₹4,436.69 crore from ₹4,179.75 crore in the corresponding quarter of the previous year. Despite the healthy top-line growth, profitability faced headwinds. Profit After Tax (PAT) stood at ₹38.52 crore, a significant decrease from ₹85.80 crore reported in Q3 FY24. Similarly, Earnings Before Interest and Tax (EBIT) for the quarter was ₹90 crore, down from ₹118 crore in the same period last year. The decline in profitability is attributed to planned investments aimed at strengthening the company's operational backbone ahead of the peak season.

Premium Segment Leads the Charge

The standout performer for United Breweries this quarter was its premium portfolio. The segment witnessed a remarkable 33% surge in volume, bringing the year-to-date growth to 35%. This performance underscores the ongoing trend of premiumization within the Indian beverage market. Key brands driving this growth included Kingfisher Ultra, Kingfisher Ultra Max, and Heineken® Silver. The company also launched a new product, Amstel Grande, which has received a positive initial response from the market, further solidifying UBL's position in the premium space.

Regional Performance and Market Dynamics

A closer look at the geographical performance reveals a mixed but overall positive picture. The company's volume growth was flat when accounting for a one-time retail pipeline fill in Andhra Pradesh during the prior year's base period. However, excluding the impact from both Andhra Pradesh and Maharashtra, where volume was adversely affected, the rest of India demonstrated healthy growth. The Prestige & Above (P&A) segment volume in the rest of India grew by 6%, while Net Sales Value (NSV) for the same segment grew by 14%. This indicates strong underlying momentum in core markets.

Strategic Investments for Future Growth

United Breweries is actively investing in its future. The company announced a major capital expenditure plan of ₹750 crore to establish a new greenfield brewery in Uttar Pradesh. This facility is expected to have a production capacity between 1.0 to 2.0 million hectolitres and is scheduled to become operational by the fourth quarter of fiscal year 2026-27. This investment is aimed at meeting the growing demand in the region and strengthening the company's market leadership. During the quarter, UBL also invested ₹47 crore in various commercial and supply chain initiatives.

Operational Efficiency and Outlook

To enhance operational efficiency and competitiveness, United Breweries has implemented a new productivity program. This initiative is expected to deliver annual gross savings of approximately ₹50 crore. Management remains optimistic about the future, citing increasing disposable incomes, favorable demographics, and the sustained premiumization trend as key drivers for the beer category. The company's strategy focuses on leveraging its strong brand portfolio and expanding its production capacity to capitalize on these growth opportunities.

Financial Summary Table

Conclusion

United Breweries' Q3 FY25 performance highlights a company in transition, balancing strong top-line growth with strategic long-term investments. The impressive 33% volume growth in the premium segment confirms that its premiumization strategy is paying off. While short-term profitability has been impacted by necessary investments in capacity and efficiency, the planned brewery in Uttar Pradesh and the ongoing productivity program position the company well for sustained growth in the Indian beer market.