UBL sees positive demand momentum in Q2, invests Rs 110 cr in Maharashtra brewery

New Delhi: United Breweries Ltd (UBL) continues to see positive demand momentum in the first two months of the ongoing second quarter, driven by growth in premium brands, according to its Managing Director and CEO, Vivek Gupta.

UBL has maintained its FY27 outlook of double-digit revenue growth, with the premium brands portfolio expected to grow over 20 per cent, despite an estimated Rs 300-350 crore cost impact from the ongoing war-related disruptions this fiscal, he said on Tuesday.

​When asked about the demand in the first two months of the September quarter, he said, "We just closed the second month. I can say we continue to see positive momentum."


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On the premiumisation front, the company has announced the expansion of Heineken Silver into three new states - Madhya Pradesh, Odisha and Kerala.

The brand is growing at over 40 per cent nationally, Gupta said, adding that the company continues to see strong momentum behind it.

The owner of Heineken and Kingfisher beer brands, which reported a 10 per cent increase in revenue in the June quarter of FY27, has commissioned a new canning line at its Ellora Brewery in Chhatrapati Sambhajinagar of Maharashtra at an investment of Rs 110 crore.

The new facility is expected to start in September. However, the canning line is likely to be fully operational in October, following statutory and regulatory approvals, Gupta told PTI in an interview.

The new line will have a capacity to produce nearly 40,000 cans per hour, giving the company additional flexibility to cater to premium, mainstream and economy beer brands in the state, Gupta said.

Maharashtra is a "very strategic market" for the category, with beer consumption growing upward of 20 per cent over the last two years following policy reforms, he said, adding that the company already operates three breweries in the state.

"This gives us additional capacity and flexibility to do more premium products in Maharashtra, more local capacity... we will have more capacity closer to the consumer," Gupta said, noting that regional brands were also seeing strong growth in the state.

On raw material availability, Gupta said UBL had resolved bottle supply constraints last year by adding suppliers and improving return-bottle ratios, while a tie-up with Crown Cans - which plans to set up a manufacturing unit in India - along with improved inventory management, had addressed can supply issues.

The company's current challenge on packaging materials was more related to cost than availability, he said.

​When asked about the broader industry outlook, Gupta said growth momentum remained strong on the back of policy reforms, particularly Karnataka's move to an ABV (alcohol by volume)-based taxation structure, which he described as a "revolutionary" step for the beer industry.

The category has grown by over 40 per cent in Karnataka following the reform, he said, adding that similar changes were being discussed in Tamil Nadu and other states.

However, cost pressures linked to the ongoing war continue to pose a challenge, with an estimated impact of Rs 300-350 crore for the company this year, Gupta said. UBL has secured pricing action in about 25 states so far and is in advanced discussions with Telangana and Andhra Pradesh, he added.

To mitigate cost pressures, the company has turned margin-negative on premium products in some cases, besides pursuing local production, cost optimisation and productivity programmes, while continuing to engage with state governments for pricing reforms, he said.