BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
While United Breweries Ltd.’s Q1 FY23 sales came in better than our expectation, the 410 basis points YoY and 440 bp QoQ contraction in gross margin led to a miss of 9%/16% on forecasted Ebitda/adjusted profit after tax.
When compared to pre-Covid levels, United Breweries' volumes are up by only 8% from Q1 FY19 levels (14% when adjusted for the change in the Andhra Pradesh state government’s excise policy).
As indicated in our February 2022 note, rising commodity cost pressures for alcoBev companies, given the lack of free pricing in a majority of states, is likely to negatively affect the pace of earnings growth, even in a strong demand environment.
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