United Breweries upgraded to buy at Nirmal Bang; check outlook, target here

Nirmal Bang assigned a target price of ₹2,250 per share for United Breweries, an upside of 25 per cent from Wednesday's closing price

The shares of United Breweries (UBL) were upgraded to a 'buy' rating by analysts at Nirmal Bang Institutional Equities as they see medium-to-longer term benefits from recent investments, favourable state policies and demand turnaround. 

 

The domestic brokerage assigned a target price of ₹2,250 per share, an upside of 25 per cent from Wednesday's closing price. 

 

India's largest beer maker has entered an investment-led growth phase under the leadership of Chief Executive Officer Vivek Gupta, according to brokerage Nirmal Bang. The firm noted that the company has stepped up marketing spends and new product launches, particularly in the premium segment, while also making sizeable investments in brewing capacity.  

 

 

In addition, the company has embarked on ambitious visi-cooler expansion plans aimed at enhancing product quality for end consumers, it noted. "These initiatives are likely to weigh on margins in the near term, but we expect the company to benefit from them over the medium to longer term, given its past under-investment in these areas," Nirmal Bang said.

 

The parent of the Kindfisher brand reported steady improvement in overall volumes, premium segment growth and market share over the last eight quarters, marking a turnaround from its earlier phase of underperformance and declining share, according to the brokerage.

 

On the macro front, UBL is benefiting from a more benign excise regime and stable material costs, Nirmal Bang said in a note. However, the brokerage pointed out that the beer industry has faced weak summer seasons in the past three years, typically accounting for 35-40 per cent of full-year Ebitda, due to unseasonal rains and elections, which weighed on earnings and share price performance.

 

Unusual floods are also expected to dent demand in the second quarter of the financial year 2026, it added. “Looking ahead, with a more normalised environment and the company’s ongoing investments to drive long-term growth, earnings growth can be quite healthy," the brokerage said.

India’s beer industry at inflection point

Nirmal Bang said that India’s beer industry is entering an inflection point, aided by regulatory moderation, evolving consumer preferences and rapid premiumisation. United Breweries, which accounts for nearly half of the country’s beer volumes, is best positioned to capitalise on this multi-year growth cycle, the brokerage noted.

 

With distribution infrastructure expanding, consumer demand shifting towards premium brands and peers struggling to regain momentum, the company's growth trajectory is moving from cyclical recovery to structural compounding, it added.

 

Against this backdrop, the brokerage upgraded the stock, citing five key drivers: favourable state policies, changing generational demand, an aggressive rollout of visi-coolers, sustained outperformance versus peers, and a strengthening premiumisation trend through successful new launches. 

United Breweries share price history

The company's stock rose as much as 1.05 per cent during the day to ₹1,817.7 per share. The stock pared gains to trade 0.9 per cent higher at ₹1,815 apiece, compared to a 0.27 per cent decline in Nifty 50 as of 9:32 AM. 

 

Shares of the company are down over 21 per cent from their life highs. The counter has fallen 11 per cent this year, compared to a 5.8 per cent advance in the benchmark Nifty 50. UBL has a total market capitalisation of ₹48,042.42 crore.