United Breweries net profit more than triples in Q2 on volume growth

BENGALURU: Net profit at United Breweries Ltd, India’s largest beer maker, more than tripled in July-September as the company recorded volume growth in most large markets during the period.

The maker of Kingfisher beer saw second quarter net profit zoom 246.91% to ₹93.84 crore versus ₹27.05 crore in the same period last year. Revenue was up 24.49% at ₹2,739.24 crore.

UB’s sales volumes grew 11% during the quarter, faster than the alcoholic beverage industry’s 5% growth rate, the firm said in a filing with the BSE on Wednesday. In the north, the company recorded significant volume growth in Delhi, Uttar Pradesh and Rajasthan. The south performed well as a whole, driven by Andhra Pradesh, Telangana, Tamil Nadu and Karnataka, UB said. Growth in the east was driven by Odisha.

But some significant markets still haven’t recovered from the Supreme Court’s decision to ban all alcohol sales near state and national highways.

Volume sales in Mumbai and Goa grew during the July-September quarter but the rest of Maharashtra is yet to recover from the impact of the highway ban, UB said. Kerala also continues to be affected by the ban. The industry was down almost 15% in Maharashtra, excluding Mumbai, and nearly 20% in Kerala during the quarter, it added.

The roll-out of the goods and services tax (GST) on July 1 was expected to throw another spanner in the works for liquor firms.

“Whilst the company has been able to mitigate part of the negative effects of GST, cost pressure on input materials and services is still incurred,” UB said in a statement on Wednesday.

UB has received permission from the Centre to manufacture non-alcoholic beverages at its manufacturing facility in Bihar and has initiated the process to do so, it said on Wednesday.