United Breweries net up 7% as sector revives

Revenues were up six per cent at Rs 1,278 cr as the beer industry started showing the first signs of a regain in growth in June

United Breweries, India's largest brewer of beer controlled by Dutch brewer Heineken, has reported a seven per cent increase in net profit at Rs 128 crore for the first quarter of FY15, compared to the corresponding quarter of FY14. Revenues were up six per cent at Rs 1,278 crore as the beer industry started showing the first signs of a regain in growth in June. The company, best known for Kingfisher beer, said it witnessed a sluggish start in April and May on account of higher excise duties and taxes, which resulted in higher consumer prices, and the restriction during the election period affecting sales.

United Breweries, which has a stranglehold on the Indian beer market with 50 per cent market share, said it posted good volume growth in selective markets such as Karnataka, Rajasthan, West Bengal, Delhi and Goa. “Growth was negatively affected by an even more strict interpretation of the quota system by TASMAC (Tamil Nadu State Marketing Corporation) in Tamil Nadu. We maintained the first quarter market share in the region of 50 per cent despite the growth across markets having been not uniform,” it said in a statement.

The company added that the revenues increased as a result of volume and price increases that have been realised in some of the major states. Gross profit increased further on account of containing the variable cost during the period, compared to the corresponding period of the previous year.

United Breweries’ stock lost 1.5 per cent to close at Rs 707.45 a share on the NSE.