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United Breweries CEO Says Pricing Actions Needed in Core States as Margins Shrink
UBL CEO Vivek Gupta said pricing actions in Telangana, Andhra, and Tamil Nadu are needed to restore margins hit by West Asia conflict costs. Premium grew 17% but remains 20% of the category. State policy reforms in Karnataka and Jharkhand are driving volume growth.
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United Breweries Ltd reported a mixed first quarter. Revenue from operations rose 10% year-on-year to ₹5,919.44 crore, but profit after tax fell 9% to ₹166 crore and EBIT margin contracted 96 basis points to 8.1%. Shares traded at ₹1,400, down 2.32% on Wednesday.
The margin pressure came from higher input costs tied to the West Asia conflict. Bottle and cartel prices rose, and the rupee weakened to 95 against the dollar, costing 300 basis points of gross margin, Managing Director and CEO Vivek Gupta said in an interview with BusinessLine. Pricing actions, mix shifts, and cost initiatives covered half that impact, but the remainder will persist into coming quarters, he said.
Gupta said UBL has raised prices in about 22 states. Three core states remain: Telangana, Andhra Pradesh, and Tamil Nadu. "We have been in touch with the governments and have given representation that, for the viability of the industry, the right pricing is extremely important," he said.
Sell-through volumes rose 13%, the second consecutive quarter of double-digit category growth. Net sales grew 7%, a slower pace, because most pricing actions took effect late in the quarter. "Most of the growth is volume-driven," Gupta said.