United Breweries Q1 FY27 Results (NSE: UBL)
Signal: Margin pressure
The read
Q1FY27 was a margin-compression quarter: revenue grew 10% YoY to ₹5,919 Cr but EBITDA margin contracted ~100bps to 5.6% and PAT fell 9.5% YoY to ₹166 Cr — the fourth margin contraction in five quarters — as excise duty (+130bps to 48.2% of revenue) and raw materials (+100bps to 27.7%) absorbed the growth, signalling continued input-cost and tax-led pressure with limited pricing power.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹59.19 Cr | 10.0% | -66.1% |
| EBIT | ₹2.48 Cr | -4.4% | |
| Net profit | ₹1.66 Cr | -9.5% | |
| EPS | ₹6.29 | -9.5% | |
| EBIT margin | 5.6% |
P&L walk
Revenue grew 10% YoY (₹5,919 Cr vs ₹5,381 Cr) but the mix shifted: excise duty (+130bps to 48% of revenue) and raw materials (+100bps to 27.7%) together absorbed the growth, while other expenses (+16% YoY, 60bps higher as % of revenue) kept EBITDA margin down ~100bps to 5.6% — hence PAT fell 9.5% YoY despite the top-line growth.
Key positives
- Revenue grew 10.0% YoY to ₹5,919 Cr (consolidated) — the strongest top-line growth in 6 quarters, albeit partly seasonality and excise-duty passthrough.
- Employee + contract expense as % of revenue fell ~10bps YoY to 3.7% (₹21.6 Cr vs ₹19.9 Cr, +8.4% YoY) — modest operating efficiency in fixed-cost lines.
- EPS of ₹6.29 tracked PAT exactly (both -9.5% YoY) with no dilution — share count stable at 26.44 Cr shares.
Key concerns
- EBITDA margin contracted ~100bps YoY to 5.6% — the fourth margin-compression quarter in five (Q1FY26 6.6%, Q2FY26 6.2%, Q3FY26 6.2%, Q4FY26 6.4% → Q1FY27 5.6%), signalling a structural margin squeeze, not a one-off.
- Excise duty as % of revenue rose +130bps YoY to 48.2% — the single largest margin drag; the company cannot pass this through fully.
- Raw material cost as % of revenue rose +100bps YoY to 27.7% (₹1,68,318 Lakhs vs ₹1,62,338 Lakhs incl. traded goods) — input-cost inflation absorbed, not passed through.
- Other expenses rose 16% YoY (₹76,124 Lakhs vs ₹71,112 Lakhs), +60bps as % of revenue — the second-largest cost overhang after excise.
- Finance costs more than doubled YoY (+106%, ₹2,304 Lakhs vs ₹1,117 Lakhs) — higher interest burden, though the base is small.
Earnings quality: includes non-operating other income
Research and educational content only. Not investment advice.