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How will United Breweries shares fare going forward? Find out

As far as annual interest is concerned, United Breweries has reduced 34% finance cost, thereby it will pay less. For example, if the company was paying Rs 100 as interest, now it will pay merely Rs 66.  

How will United Breweries shares fare going forward? Find out
As far as numbers are concerned, the company has functioned very efficiently and due to that it has been able to save Rs 430 crore from working capital and invested the same in its business. Representational Image, source: Reuters
By ZeeBiz WebTeam
Updated: Tue, May 21, 2019
08:43 pm
New Delhi, ZeeBiz WebDesk
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United Breweries today witnessed a surge today and Zee Business delved deep to ascertain the reason why. Shares of United Breweries have to be seen in two parts; if we look at the numbers, they are not impressive; but if we look at futuristic growth, it i another matter. One is volume growth, that has witnessed double digit growth, barring West Bengal. 

Citing company's statement, especially four points related to volume growth, Zee Business report said that Kerala has more or less a uniform weather and therefore it saw a good growth in South India, barring Karnataka. The sale data of elections are not given and that would be available during next quarter.    

As far as annual interest is concerned, the firm has reduced 34% finance cost, thereby it will pay less. For example, if the company was paying Rs 100 as interest, now it will pay merely Rs 66.  

In coming quarters, the company has also decided to launch two new products, of these, one is non-alcoholic drinks, which has less in volume in its product range. Second product is a beer already being sold in south India that the company wants to launch in north India to further boost volume growth, the report added.

As far as numbers are concerned, the company has functioned very efficiently and due to that it has been able to save Rs 430 crore from working capital and invested the same in its business.

Notably, United Breweries Ltd (UBL) on Tuesday reported 25.26 per cent fall in its standalone net profit of Rs 67.92 crore for the fourth quarter ended March 2019, however, it had posted a net profit of Rs 90.88 crore in the January-March period a year-ago, according to the company's regulatory filing with BSE.

UBL's total Q4 income was up 5.84 per cent to Rs 3,469.3 crore as against Rs 3,277.85 crore in the corresponding quarter of the previous fiscal, it said, adding that the company's volume grew in all markets except West Bengal, Uttar Pradesh and Maharashtra.

The company said, "UBL's growth continues to lead the industry, strengthening its market position. Good performance generated healthy operating cash flows, which along with better working capital management helped internal funding of Rs 430 crore investments in the business." 

Meanwhile, the company's board of directors has proposed dividend of Rs 2.50 per equity share for the financial year ended March 31, 2019. The company's share price ended at Rs 1,430.00, up by 55.75 points (4.06%).