India's United Breweries posts slump in Q4 profit on higher input costs

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BENGALURU (Reuters) - India's United Breweries Ltd reported a 94.03% slide in fourth-quarter profit on Thursday, hurt by higher raw material costs.

The liquor maker, partly owned by the Dutch brewer Heineken, said its standalone profit fell to 97.3 million rupees ($1.19 million) in the three months ended March 31, from 1.63 billion rupees a year earlier.

Total expenses rose nearly 18% following a 32% spike in raw material costs.

"Gross margin during the quarter was lower as compared to previous year due to continued inflationary pressures on our cost base, particularly on prices of barley and packaging materials," said the brewer in a statement.

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India's alcohol and beverage industry has been battling high raw material inflation, with prices of everything from glass to extra neutral alcohol (ENA) or rectified spirit, a primary raw material for making alcoholic beverages, inching up every quarter.

United Breweries, which sells beer under labels like Kingfisher and Cannon 10000, saw its revenue growth slow from about 96% in the first quarter, when sales jump in the summer months, to 5.4% in the third quarter, which includes the onset of winter.

The slowing revenue growth and rising expenses pushed the company to its first loss in 10 quarters in the October-December period.


Valuation Estimates (next 12 Analysts'

(next 12 months) sentiment


RIC PE EV/E Revenue profit Mean # of Stock to

BITD growth growth rating analyst price

A s target

United 46. 32.3 12.17 57.96 Buy 14 0.88

Breweries 59 0


United 50. 31.0 5.07 12.75 Buy 14 0.91

Spirits Ltd 38 6

Radico 43. 25.3 15.27 43.40 Hold 7 0.97

Khaitan Ltd 20 9

* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT


GRAPHIC: United_breweries_results

-- All data from Refinitiv

-- $1 = 81.7870 rupees

($1 = 81.7500 Indian rupees)

(Reporting by Yagnoseni Das in Bengaluru; Editing by Sohini Goswami)