United Breweries net profit falls 10% in Q1FY27 on war headwinds
United Breweries' Q1FY27 results show a 10% drop in net profit to ₹166.39 crore despite 10% revenue growth, driven by geopolitical cost pressures. Premium segments showed robust volume growth, while free operating cash flow surged 38%.
*this image is generated using AI for illustrative purposes only.
united breweries reported a standalone net profit of ₹166.39 crore for the quarter ended June 30, 2026, marking a 9.96% decline from ₹183.71 crore in the corresponding period of FY25. The profit contraction occurred despite a 10.01% year-on-year increase in revenue from operations to ₹5,917.45 crore, driven by strong volume growth and a favourable geographic mix. The Board of Directors approved the unaudited standalone and consolidated financial results on August 04, 2026, pursuant to Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The company’s gross profit margin stood at 41.0%, down 155 basis points year-on-year, primarily due to a 300 basis point impact from Middle East war headwinds. EBITDA margin improved to 10.9% from 6.5% in the previous quarter, though it declined by 35 basis points compared to the same period last year. Free operating cash flow (FOCF) rose 38% to ₹548 crore, aided by disciplined working capital management and a deliberate 20% reduction in inventory levels. Statutory auditors B S R & Co. LLP issued an unqualified review report on the financial statements.
Financial Performance Highlights
| Metric | Q1FY27 (₹ in Lakhs) | Q1FY26 (₹ in Lakhs) | Change |
|---|---|---|---|
| Revenue from Operations | 5,91,745 | 5,37,888 | +10.01% |
| Total Income | 5,96,809 | 5,38,983 | +10.73% |
| Total Expenses | 5,74,348 | 5,14,237 | +11.69% |
| Profit Before Tax | 22,461 | 24,746 | -9.23% |
| Net Profit | 16,639 | 18,371 | -9.96% |
| EPS (Basic) | ₹6.29 | ₹6.95 | -9.49% |
Sell-out volumes increased by 13% in Q1FY27, while sell-in volumes grew by 9%. Premium volumes expanded by 17%, excluding two states where the company mitigated war-related impacts. Heineken Silver volumes surged 28%, and Kingfisher Ultra grew 11%. Premium margins turned accretive for the first time, reflecting successful localisation efforts over the past two years. Total premium volumes all-India grew by 7%.
What the Numbers Show
The divergence between top-line growth and bottom-line contraction highlights the pressure on margins from external geopolitical factors. While revenue grew 10%, total expenses rose 11.69%, indicating that cost increases outpaced pricing power in this quarter. The significant improvement in EBITDA margin sequentially (from 6.5% to 10.9%) suggests operational efficiencies are being realised, but the year-on-year comparison reveals the persistent drag from higher input costs and war-related disruptions. The 38% jump in free operating cash flow demonstrates effective liquidity management despite the profit dip.
Key Operational Updates
- Capacity Expansion: A new canning line was commissioned in Telangana. Capital investments in Maharashtra and Uttar Pradesh are progressing as planned.
- Strategic Partnerships: United Breweries announced a partnership with ABB in Punjab and completed the closure of the Ludhiana brewery as part of its North Grid optimisation programme.
- Legal Matters: The appeal against the Competition Commission of India’s penalty order remains sub judice before the Supreme Court. The company has deposited ₹18,762 lakh as fixed deposits with the NCLAT Registrar. No provision has been recorded as the final obligation is uncertain.
- Bihar Plant: The company applied under the BIADA Amnesty Policy 2025 to restart operations. It received in-principle approval on January 13, 2026, and submitted a detailed project report on March 31, 2026. The carrying value of property, plant, and equipment in Bihar is ₹5,694 lakh.
- Dividend: The Board proposed a dividend of ₹10 per equity share for the year ended March 31, 2026, amounting to ₹26,441 lakh, subject to shareholder approval at the annual general meeting.
Historical Stock Returns for United Breweries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.30% | +0.38% | +6.62% | -4.99% | -26.05% | -1.50% |
How might the ongoing Middle East geopolitical tensions continue to impact United Breweries' gross margins and supply chain stability in Q2FY27?
What is the expected timeline and financial impact of the Bihar plant restart following its in-principle approval under the BIADA Amnesty Policy 2025?
Will the successful localisation efforts driving premium volume growth sustain margin accretion, or will input cost inflation erode these gains in subsequent quarters?
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