India’s biggest brewer announces a 6% rise in profits for the past quarter, with sales surging from its premiumisation strategy
United Breweries Ltd (UBL), India’s largest beer company and brewers of the popular Kingfisher beer, has delivered a robust performance for the April–June quarter, reporting a 6% rise in consolidated net profit to INR1.84 billion (US$21.31 million), up from approximately INR1.74 billion a year earlier. A strategic combination of premiumisation, volume growth, pricing power, and cost relief driven by favourable excise duty changes, has been attributed by the company for the growth.
Sales have performed particularly strongly. UBL’s net revenue climbed by 16% to INR53.81 billion, with volumes rising 11%. Its premium beer segment also surged by an impressive 46%, underpinned by strong consumer demand for brands like Kingfisher Ultra and Heineken Silver. The figures emphasise that the trend to premiumisation, fuelled by increasing disposable incomes and evolving tastes, continues to reshape the Indian beer market, and that UBL is clearly benefiting from it.
Cost factors also played a pivotal role in the quarter’s results, with lower excise duties on beer helping to reduce overall expenses by approximately 7.8%. The margin enhancement this created lends credence to recent comments from UBL CEO Vivek Gupta when he highlighted the positive impact of reduced state-level regulatory costs.
Nevertheless, regulatory challenges persist, particularly in states like Telangana, which accounts for between 15 to 20% of UBL’s revenues. Higher taxation in regions such as Karnataka, and complexity across state excise regimes, continue to create obstacles to ongoing growth, according to the company.
UBL’s long-term strategy will see a continued premiumisation push, and the brewer is significantly increasing its capital expenditure to expand production capabilities. It will also invest in supply chains and cooling infrastructure in urban markets; and will boost its capacity in states like Andhra Pradesh to meet rising demand for its flagship brands.
