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United Breweries Q2 Review - Close To The End Of De-Growth Cycle: Dolat Capital

United Breweries Q2 Review - Close To The End Of De-Growth Cycle: Dolat Capital

A barman pours a glass of beer from a tap in a restaurant. (Photographer: Martin Divisek/Bloomberg)
A barman pours a glass of beer from a tap in a restaurant. (Photographer: Martin Divisek/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Dolat Capital Report

United Breweries Ltd.’s Q2 FY22 operating performance was marginally below estimates. Volumes increased by 49% YoY but still down 22% versus pre-Covid-19 levels on account of West and South market.

A modest 60 basis points YoY decline in gross margin is positive in-light of 15% YoY barley inflation.

Post healthy operating performance over FY17-19, United Breweries’ performance had been muted for the last ten quarters. That said, with-

  1. favorable base,

  2. costs rationalisation,

  3. opening of ontrade,

  4. reduction in excise duties in key states (West Bengal, Uttar Pradesh, Rajasthan etc) and

  5. key beer season ahead; United Breweries is well-posed to register a robust volume growth and earnings recovery.

Click on the attachment to read the full report:

Dolat Capital United Breweries Q2FY22 Result Update.pdf

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