United Breweries Q2 profit drops 64% on stronger monsoon, soft beer market; misses estimates

Leading beer maker United Breweries Ltd on Wednesday (October 29) reported a 64% year-on-year decline in net profit at ₹46.95 crore for the quarter ended September 30, 2025, compared to ₹132.2 crore in the same quarter last year. The figure also came in below the CNBC-TV18 poll estimate of ₹110 crore.

Revenue for the quarter stood at ₹2,051 crore, up 3% from ₹2,115 crore in Q2FY25, but slightly lower than the poll estimate of ₹2,156 crore.

EBITDA for the quarter came in at ₹130.4 crore, reflecting a 42.4% decline from ₹227 crore in the year-ago period, compared to the poll estimate of ₹205 crore. EBITDA margin stood at 6.4%, down from 10.7% in Q2FY25 and below the CNBC-TV18 poll estimate of 9.5%.

United Breweries faced challenges in Q2 FY26 due to a stronger-than-usual monsoon and a muted beer market, yet the company managed to gain market share on a sell-out basis. Overall, sell-in volume declined by 3%, while the premium segment grew 17%, continuing its growth trajectory ahead of the market.

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Net sales in Q2 were down 3%, with the decline in volume and a mid-single-digit price-mix increase being offset by negative state- and source-mix, bringing year-to-date net sales growth to 7%.

The company’s gross profit margin for the quarter stood at 42.8%, down 104 basis points versus the same period last year, though an improvement from Q1. This was impacted by negative mix, while year-to-date GP margin was 42.6% (down 76 bps vs LY).

United Breweries continued to invest in brands, increasing spend by 22% in line with its commercial strategy. These investments, coupled with operating deleverage from the volume decline, led to a 55% decline in EBIT.

Total volume declined 3.4% in Q2, with growth in Maharashtra, Andhra Pradesh, and Assam more than offset by adverse weather across the footprint and stock-building in Q2 FY25 following the peak season affected by national elections.

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Premium volume grew 17% during the quarter, bringing HY growth to 33%. Key growth products included Kingfisher Ultra, Kingfisher Ultra Max, and Heineken® Silver. Gross profit grew 5% year-to-date compared to last year, while EBIT declined 18%, primarily due to negative operating leverage in Q2 and continued brand investments.

Investments in capex during the quarter totalled ₹293 crore, an increase of ₹242 crore compared to last year, mainly linked to a new greenfield project in Uttar Pradesh and commercial capex aimed at driving future qualitative growth.

As part of its network optimisation and productivity program, the Mangalore unit was closed earlier this year, with further initiatives being implemented to improve operational excellence and cost efficiency across the organisation.

United Breweries remains optimistic about the long-term growth potential of the beer industry, driven by increasing disposable income, favourable demographics, and continued premiumisation. Shares of United Breweries Ltd ended at ₹1,839.75, up by ₹6.05, or 0.33%, on the BSE.

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