Q4FY21 Result Update - United Breweries - ICICI Direct

United Breweries' (UBL) net revenues showed a sharp recovery and grew 8% YoY to Rs. 1544 crore. Volumes grew 9% YoY, due to good growth in all key markets except Telangana, Delhi and Odisha. Gross margins grew 110 bps YoY to 52% due to a better state mix and price hikes, which along with control on operational costs led to EBITDA margin of 16.9% (up 760 bps YoY). Subsequently, absolute EBITDA was at Rs. 261 crore (up 98% YoY). The company reported exceptional expense of Rs. 62 crore due to recognition of impairment loss of Rs. 44.5 crore at Bihar plant and impairment loss of Rs. 17.8 crore on investment in subsidiary company. Subsequently, PAT came in at Rs. 97 crore (unadjusted), as the operational performance was negated by exceptional expense.

Valuation & Outlook

Facing multiple headwinds in FY21, Q4 results reflected the inherent strength in the UBL brand portfolio and beer sector, in general, to spring back to growth (capture lost market share from liquor), when situation normalises. It stays an underpenetrated segment (12% market share in alcohol consumed), a preferred choice of ready to drink product for the youth and, thus, has long term growth potential (in a landscape historically dominated by liquor). We maintain BUY rating on the stock with a revised target price of Rs. 1450 (earlier Rs. 1490).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_UnitedBreweries_Q4FY21.pdf

Shares of UNITED BREWERIES LTD. was last trading in BSE at Rs.1214 as compared to the previous close of Rs. 1196.3. The total number of shares traded during the day was 20219 in over 1047 trades.

The stock hit an intraday high of Rs. 1230.75 and intraday low of 1180.1. The net turnover during the day was Rs. 24641313.

Source : Equity Bulls

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