United Breweries Limited — Q2 FY26 earnings call

I think what we are seeing is because in July this year, the pricing came back on economy brands because there was a taxation where the economy brands cannot be sold below a certain price. Now that was revised in July. We think that we will start cycling that, you know, very soon. And there was another tax revision, which happened in October or September last year, which we'll be cycling on.

Explains the reasons for significant declines in key states and outlines potential recovery drivers, including tax revisions.

Asked by Harit Kapoor

we are accelerating some of our productivity and efficiency measures, which include network optimizations, for instance, like we have announced the closure of our brewery in Mangalore. Also, we will further streamline trade spends and other organizational costs to make sure that we stay on track for the margin trajectory and that we ensure sustainable profit growth going forward.

Details management's concrete actions to address cost pressures and improve profitability through operational efficiencies.

Asked by Harit Kapoor

if you actually think about it, we never look at our business versus one specific player, but our premium business is actually growing 17% and we are growing shares on that premium business. In some of the states, our premium business is up 40%, 60%.

Highlights UBL's strong performance and market share gains in the premium segment, demonstrating resilience against competition.

Asked by Avnish Roy

on Maharashtra, we actually had, I would say, mid-teens growth in the quarter itself. We believe that growth will accelerate not only sustain. We have invested as UBL significant on distributary design, on in-store fundamentals, on coverage, on resources and we kept the foot -- feet on the accelerator.

Provides insight into successful state-level strategies and their potential for sustained growth, particularly in Maharashtra.

Asked by Avnish Roy

I think on Karnataka, look, our data suggests that government is actually losing revenue on beer, and they are not able to make up that full loss through spirits also. So we are, again, through Brewers Association of India, we are consistently representing that Karnataka has been capital -- the beer capital of India that consistent increase in taxation since 2020 -- late 2023 has impacted the beer category significantly.

Explains the negative impact of taxation on category growth and government revenue, indicating ongoing advocacy efforts for policy changes.

Asked by Avnish Roy

I think structurally, we think that the beer category should grow again, there's no reason why it should not grow 5% to 6%. If you look at the last two years CAGR is 5%. I think we had a weather anomaly this time and affordability in certain markets.

Provides management's view on the underlying health and future growth potential of the beer category despite recent weather and affordability challenges.

Asked by Latika Chopra

I think here we also need to make sure that we look at it like-for-like because if we look at our Heineken reporting, we also reported mid single-digit revenue growth. So, we would have to look at that on a like-for-like basis.

Management addresses analyst's concern about competitors' better performance by suggesting differences in reporting and the need for like-for-like comparisons.

Asked by Latika Chopra

I don't think we can share the specific margins, yes Jorn. ... So, we won't take decisions that incrementally impact our margins from the economy segment point of view.

Management did not provide specific margin details for economy brands or a clear numerical path to double-digit EBITDA, indicating sensitivity or strategic discretion.

Asked by Dhiraj Mistry