United Breweries (532478) Q4 25/26 earnings summary

Executive summary

• Q4 FY26 saw the beer category in India return to double-digit growth (+10%), with premium segment volumes up 16% and most markets contributing positively; premiumization outpaced the rest of the portfolio.

• FY26 overall showed volume growth (up 3%) and premiumization (premium volumes up 21%), but profitability was pressured by higher costs, increased brand investments, and external disruptions.

• Gross margin improved by 330–332 basis points year-over-year in Q4, supported by premiumization, operational efficiency, and localized production.

• Deliberate investments in brand building, premiumization, and supply chain resilience were prioritized, impacting EBIT due to higher commercial intensity and cost pressures.

• Board proposed a dividend of Rs 10 per share for FY26, unchanged from the previous year.

Financial highlights

• Q4 FY26: Volume up 4%–4.1%, premium volume up 16%, net sales down 3%, gross margin at 45.4% (+332 bps YoY), EBIT down 48%, profit after tax up 4%.

• FY26: Volume up 3%, net sales up 4%, EBIT down 10%, premium volume up 21%, gross margin at 43.9% (+92 bps YoY), profit after tax down 6%.

• Q4 standalone: Net sales ₹2,248 Cr (-3% YoY), EBITDA ₹147 Cr (-24% YoY), EBIT ₹71 Cr (-48% YoY), profit after tax ₹102 Cr (+4% YoY).

• FY26 consolidated revenue from operations: Rs 17,46,349 Lakhs; net profit: Rs 41,339 Lakhs; EPS: Rs 15.63.

• Capex investments for the year: Rs 432 Cr, focused on commercial and supply chain initiatives.

Outlook and guidance

• FY 2027 is expected to deliver 6%-7% volume growth and double-digit revenue growth, assuming normal seasonality and no major supply disruptions.

• Cost pressures from energy, fuel, and packaging materials (notably aluminum and glass) are expected to persist, with an estimated INR 400-500 crore impact over the next 2-3 quarters.

• At least half of the anticipated cost impact has firm mitigation plans, including productivity drives, selective pricing, and reduced trade spend in low-profit markets.

• Further pricing actions and cost management are planned, but not all cost increases can be passed on due to regulatory constraints.

• Long-term outlook remains optimistic, driven by premiumization, favorable demographics, and continued investment in productivity and cost efficiency.