Higher volumes, prices lift United Breweries net 23%

United Breweries Limited (UBL), India's largest brewing company and part of the Vijay Mallya-led UB Group, on Wednesday reported a strong 23 per cent growth in net profit to Rs 120 crore for the first quarter of FY14, against the corresponding previous period.

Total income grew by a good 13 per cent to Rs 1,359 crore and operational profit was up 24 per cent.

The maker of Kingfisher beer said the volumes grew marginally by 1.5 per cent and it took price increases in select markets, which helped in offsetting input price increases in an inflationary economy.

"We posted volume growth in key markets, resulting in revenue growing ahead of volume. The double-digit volume growth in Delhi, Punjab, Rajasthan, Odisha and Uttar Pradesh resulted in market share gain," Kalyan Ganguly, managing director, UBL said.

Tamil Nadu problem
UBL, in which Dutch brewer Heineken has a 37.5 per cent stake and also sells the globally renowned iconic beer, added it also witnessed good growth in the Andhra Pradesh and Karnataka markets, which constitute a large share of the industry.

The company, which controls as much as 50 per cent of the Indian beer market, has once again said its volumes in Tamil Nadu continue to be affected by the unfavourable ordering pattern of The Tamil Nadu State Marketing Corporation, resulting in a national volume growth of 1.5 per cent against an industry growth of three per cent.

Cost pressure
The performance during the quarter in markets excluding Tamil Nadu resulted in volume growth of seven per cent and a market share gain of 80 basis points.

Ganguly added the cost pressures were expected to continue over the balance period of the financial year, with modest industry growth.