Cans of Kingfisher Beer, made by United Breweries Ltd., are stacked in a liquor store in New Delhi, India. (Photographer: Adam Ferguson/Bloomberg News)

Q1 Results: Why United Breweries Is Wary Of The Upcoming Election Season

Liquor giant United Breweries Ltd. expects to face challenges ahead due to the upcoming series of state elections followed by the general election next year.

“The rules in terms of dispatch, hours we are allowed to operate, outlet closures in account of voting day and counting days, all those are a huge challenge for our business,” company’s Managing Director Shekhar Ramamurthy told BloombergQuint in a post-earnings interaction.

This stands in contrast with the market expectation that alcohol sales rise before elections. “This will call for a whole lot of meticulous planning,” he said.

Assembly elections are due in states such as Mizoram, Rajasthan, Chattisgarh, Madhya Pradesh starting October, followed by the Union election in the first quarter of financial year 2019-20.

Key Q1 earnings (standalone, YoY) highlights:

  • Net sales up 11.1 percent at Rs 1,865 crore against Rs 1,678 crore; Bloomberg consensus estimates stood at Rs 1,934 crore.
  • Earnings before interest, tax, depreciation and amortisation up 25.7 percent at Rs 400 crore versus Rs 318 crore (Bloomberg estimate: Rs 392 crore).
  • Ebitda margins at 21.4 percent versus 19 percent (Bloomberg estimate: 23.2 percent).
  • Net profit up 37.7 percent at Rs 223 crore versus Rs 162 crore (Bloomberg estimate: Rs 208 crore).

Watch the full interview here: