United Breweries Share Price in Focus Ahead of Its Earnings

United Breweries Limited (UBL) is a leading player in the Indian beer market, manufacturing and marketing popular brands like Kingfisher Premium, Bullet, Heineken Silver, and Kingfisher Ultra. With a strong domestic presence, the company also exports to over 50 countries, including Hong Kong, Singapore, and Australia. UBL operates 19 breweries across India and has 12 contract brewing arrangements.

However, the company recently found itself in the spotlight due to a pricing dispute with Telangana Beverages Corporation Ltd. (TGBCL), leading to a temporary halt in beer supplies and affecting its stock performance.

United Breweries Share Price Movement

As of 10:44 AM on February 11, 2025, UBL’s share price was down 0.67%. The stock has witnessed a decline of nearly 5% in February so far, reflecting investor concerns over recent developments, particularly the dispute with TGBCL.

Temporary Suspension of Beer Supply to Telangana

On January 8, 2025, UBL announced its decision to suspend beer supplies to TGBCL with immediate effect. The primary reasons cited were:

• Unchanged Pricing Since 2019-20: TGBCL had not revised the basic price of UBL’s beer for several years, despite rising input costs.
• Unpaid Dues: The company had outstanding receivables of ₹900-950 crore from TGBCL, leading to increased working capital requirements.
• Impact on Profitability: Given the significant volume of sales attributed to TGBCL, UBL’s margins were under pressure.

UBL had been negotiating for a price revision since 2020-21, but no agreement had been reached, prompting the company to take this drastic step.

Resumption of Supplies to TGBCL

After a series of discussions, UBL announced that it would resume supply to TGBCL with immediate effect. The decision was based on constructive talks, during which TGBCL assured UBL of addressing pricing concerns and clearing outstanding payments in a time-bound manner.

UBL stated in an exchange filing: “This is an interim decision in the interest of consumers, workers, and stakeholders. We will continue to engage with TGBCL to find a sustainable resolution.”

While this move brings temporary relief, investors and market participants will closely monitor whether TGBCL follows through on its commitments.

On January 12, the CM of Telangana ordered the finance department to clear pending bills through the excise department to liquor manufacturers.

As per a news report on February 11, 2025, the state government has increased beer prices by 15% after allowing Telangana Beverages Corporation Limited (TGBCL) to implement the recommendations of the Price-Fixing Committee (PFC).

Upcoming Financial Results Announcement

Apart from the TGBCL issue, UBL’s Board of Directors is set to meet on February 13, 2025, to approve the unaudited standalone and consolidated financial results for the quarter and year-to-date ending December 31, 2024. 

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