United Breweries net profit surged by 80 per cent: beats the expectations

Vijay Mallya-controlled United Breweries Ltd. (UBL) announced its third quarter results on Tuesday. UBL which makes Kingfisher Beer is India's largest brewer. The net profit in the December quarter rose 80.57 per cent to Rs.72.12 crore on account of favourable input costs, beating Street estimates by a wide margin. 

On financial front, the net revenue from operations of UBL reached Rs 1158 crores in Q3FY16 compared to Rs 1000 crores in Q3FY15, an increase of 15.72 per cent year on year (YoY). The EBITDA stands at Rs 183 crores this quarter compared to Rs 122 crores in Q3FY15, an increase of 50.84 per cent YoY. The EBITDA margin of company stands at 15.83 per cent this quarter compared to 12.14 per cent in Q3FY15. The increase in EBITDA is attributed to favourable input costs. The net profit stands at Rs 72 crores in Q3FY16 compared to Rs 40 crores in Q3FY15, an increase of 80.57 per cent YoY. 

The nine month ending net revenue from operations increased by 7.33 per cent and reached  Rs 3790 crores compared to Rs 3531 crores for the same period last year. The net profit for nine month period stood at Rs 243 crores compared to Rs 211 crores for the same period last year, an increase of 15.16 per cent YoY. The industry recorded a 13 per cent growth in the quarter resulting in a 3 per cent growth for the nine months ended December 2015. Tertiary volumes of sales grew in line with the market. 

UBL's volume sales growth was driven by Kerala, Telangana and Karnataka and to a lesser extent also by markets like Delhi, Chandigarh and Madhya Pradesh. The company also informed that its acquired brewery in Rajasthan has commenced operation in this quarter. 

Recently, UBL enters the ready to drink segment with Kingfisher Buzz, which is a beverage with under 5 per cent alcohol. The new offering aims to cater to the carefree, confident and energetic youth in India. Further ICICI Bank, the country’s largest private sector lender, picked up 1.95 million shares of United Breweries amounting to 0.74 per cent stake in UBL through an open market deal from UBHL, a promoter of United Breweries. The transaction was valued at Rs 186.03 crore.

Reacting to the good numbers the stock of UBL closed at Rs 808.10 , up 3.76 per cent from previous close on Tuesday. Today the stock of the company is trading at Rs 800.50, a decrease of 0.94 per cent from previous close.