Revise United Breweries truthful worth to Rs 1,365


Distinctive loss stood at Rs 6.2 bn for Rs 4.5 bn impairment loss on Bihar brewery, and Rs 1.8 bn loss on funding in subsidiary.

UBBL reported good sequential restoration in volumes with EBITDA margin at 16.9% aided by a decent leash on working prices. OCF era in FY2021 was sturdy regardless of a pointy decline in working revenue. Covid-led externalities and rising enter prices (barley) drove a pointy minimize in FY2022E estimates. We cut back FY2022-23E EPS estimates by 44%/5%; revise FV to Rs 1,365 (Rs 1,375 earlier).

UBBL reported 8% yoy development in revenues to Rs 15.4 bn (3% above estimate) and 9% development in volumes. On a 2-yr CAGR foundation, volumes declined 7% (versus 11% decline in 3Q), and revenues declined 3% (versus 6% decline in 3Q). Administration highlighted that almost all markets witnessed good quantity development besides Telangana, Odisha and Delhi, North (+13% yoy): Rajasthan, Punjab, Haryana and Himachal Pradesh noticed development whereas UP was flat, West (+3% yoy): wholesome double-digit development in all markets besides Chhattisgarh, South (+3% yoy): broad-based double-digit development besides Telangana (Covid-cess led) and Pondicherry, East (+26% yoy): all markets besides Odisha reported double-digit development with West Bengal seeing 100%+ development (barely beneficial taxation relative to spirits).

GM stood at 52% (KIE: 53.3%) increasing 110 bps yoy and down 190 bps qoq. EBITDA stood at Rs2.6 bn (KIE: 2.4 bn). EBITDA margin stood at 16.9% (KIE 15.7%) up 765 bps yoy. EBITDA margin beat was largely on account of lower-than anticipated different bills. Employees prices/different expense had been down 1%/5% yoy and elevated 13%/24% qoq.

Depreciation expense was decrease than our expectation (linked to manufacturing volumes). PBT and PAT got here in at Rs 2.1 bn and Rs 0.97 bn, respectively. Distinctive loss stood at Rs 6.2 bn for Rs 4.5 bn impairment loss on Bihar brewery, and Rs 1.8 bn loss on funding in subsidiary.

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