India's United Breweries posts higher Q1 profit on premium growth, lower costs
The Kingfisher beer maker's consolidated profit came in at 1.84 billion rupees ($21.30 million) for the quarter ended June 30, up from 1.74 billion rupees a year earlier.
United Breweries, majority-owned by Dutch brewer Heineken (HEIN.AS), opens new tab, posted a nearly 16% rise in net sales, led by a 11% growth in volumes, higher pricing and premiumisation.
Total expenses fell 7.8%, driven by lower excise duty costs.
Beer makers in India are riding a wave of resilient premium consumption, as upper middle-class and affluent consumers, largely insulated from the rising living costs in metros, continue to spend freely on higher-end goods, including pricier brews.
The shift toward premiums has helped offset broader inflationary pressures and subdued demand at the mass-market level, fuelling earnings growth for players in the alcohol and lifestyle segments.
Spirits-maker Radico Khaitan (RADC.NS), opens new tab, retail chain Shoppers Stop (SHOP.NS), opens new tab and beauty retailer Nykaa (FSNE.NS), opens new tab have capitalised on this trend in recent quarters, reporting strong gains driven by their premium portfolios.
Premium segment grew 46% in the reported quarter, higher than the overall volume growth of 11%.
PEER PERFORMANCE
* The mean of analysts' 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
APRIL TO JUNE STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 86.3650 Indian rupees
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