United Breweries Q2 FY27 Results Analysis: PAT Surges 190%, EBITDA Margin Expands 480 bps (UBL)

United Breweries Ltd's Q2 FY27 numbers came in strong, with revenue of Rs. 2,535.90 Cr (+23.64% YoY) and PAT growth of +189.52% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Net sales grew 23.64% YoY on +16% volumes with PAT nearly tripling (+189.52%), and EBITDA margin expanded 480 bps to 11.88%, meeting management's double-digit margin guidance while tracking ahead of the 6-7% FY27 volume guidance. Cash conversion was high (H1 CFO/PAT of 2.66x) and net debt fell to Rs.500.35 Cr even as capacity capex (two canning lines, Rs.110 Cr Ellora line) was commissioned. Watch items are the Rs.751.83 Cr CCI contingent liability, rising finance costs from the capex ramp, and the planned Q3 step-up in commercial investment.

Key Investment Insights

Key Positives

• PAT nearly tripled, up 189.52% YoY to Rs.135.93 Cr; normalized PAT grew 131.42% after stripping the Rs.27.28 Cr net refund-interest gain
• EBITDA margin expanded 480 bps YoY to 11.88%; EBIT margin up 441 bps to 8.36%
• Gross margin rose 194 bps YoY and 375 bps QoQ to 44.74% despite inflationary input pressures
• Premium volumes grew 38% (Heineken Silver +67%, Kingfisher Ultra +44%)
• H1 operating cash flow of Rs.805.16 Cr grew 77.64% YoY; FCF of Rs.490.33 Cr covered the Rs.244.40 Cr dividend
• Net debt reduced from Rs.745.27 Cr to Rs.500.35 Cr; short-term borrowings cut by Rs.650.26 Cr
• Bombay HC set aside the Rs.21.92 Cr service tax demand and Rs.100.83 Cr of IT refunds were received

Risk Factors

• Finance costs rose 93.24% YoY to Rs.28.31 Cr and D&A rose 39.37% to Rs.89.17 Cr on the capex ramp funded by Rs.465 Cr of new long-term borrowings
• CCI penalty of Rs.751.83 Cr remains a contingent liability with no provision recorded; Supreme Court stay continues and recoverability is stated as uncertain
• IT penalty orders of Rs.54.83 Cr received in Sep 2026 are under appeal
• Bihar plant PPE of Rs.55.87 Cr carries recoverability risk pending final BIADA amnesty approval and a pending Supreme Court SLP on prohibition
• Management flagged intent to step up commercial investments in Q3, a forward cost headwind