Volume growth healthy; GM recovery below expectation

Company
11 Mar 2024
5 Min read 
  • United Breweries (UBBL) reported healthy volume growth in 3QFY24, driven by a strong performance in the premium portfolio.
  •  However, the company's gross margin and EBITDA margin were below expectations due to slower returns on glass bottles and lower-than-expected recovery in gross margin.
  •  UBBL posted a 1% volume dip in 9MFY24, but the premium portfolio continued to grow strongly.
  •  The company expects margin recovery in FY25/FY26, but there is still uncertainty surrounding earnings and the stock.
  •  The stock is rated as a Sell with a target price of INR1,500.
  •  UBBL's financials and valuations show a decline in EPS for FY24, but an increase in FY25 and FY26.
  •  The company's ratios and cash flow statement indicate a positive outlook for the future.
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