UBL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.5

Let’s take a look at United Breweries Ltd. (UBL) — India’s iconic beer manufacturer, best known for Kingfisher. This is a story of brand strength and consistent demand, wrapped in a richly valued stock that may need earnings catch-up.

🍻 Core Financial Highlights

Return Metrics

ROE: 10.8%, ROCE: 13.9% — solid, but not outstanding relative to its lofty valuation

EPS: ₹17.1 — modest for a stock priced above ₹1,900

Profitability & Growth

PAT Qtr: ₹184 Cr vs ₹97.6 Cr — healthy Q-o-Q growth (~6% annualized), but not explosive

Quarterly Profit Variance: 5.95% — tepid momentum

Debt & Liquidity

Debt-to-Equity: 0.14 — very conservative, great for long-term resilience

Dividend Yield: 0.51% — barely meaningful, not a yield play

📈 Valuation Metrics

Metric Value Interpretation

P/E Ratio 112 Extremely overvalued — more than 3x industry average of 32.9

P/B Ratio ~11.97 Price far exceeds net assets; acceptable only for high-growth, brand-driven firms

PEG Ratio 14.1 Unfavorable — implies weak earnings growth relative to valuation

🏭 Business Model & Competitive Advantage

Product Focus: Primarily beer — Kingfisher and Heineken, with dominant market share

Strengths

Premium branding and strong urban consumption trends

Distribution network spanning India and robust logistical reach

Backing from global major Heineken increases credibility and innovation

Risks

Highly regulated industry with state-level tax complexities

Seasonality in consumption

Input cost sensitivity — barley, glass, packaging

📉 Technical Indicators

RSI: 44.8 — consolidating; not oversold, suggesting sideways movement

MACD: 3.87 — mildly bullish, but lacks conviction

Price vs DMA

Current price slightly below both 50-DMA and 200-DMA — neutral to weak momentum

🎯 Suggested Entry & Investment Outlook

Entry Zone: ₹1,875–₹1,920 — wait for dips closer to long-term DMA

Target Range (12–15 months): ₹2,200–₹2,300, assuming demand recovery and input cost normalization

Investor Fit

Brand-focused investors who appreciate quality and pricing power

Not ideal for value-seekers or growth chasers due to valuation excess

If you’re interested in exploring how UBL compares with Radico Khaitan or AB InBev’s India operations, I can help weigh relative margins and scaling potential. Or we can run a consumer sentiment and urban alcohol spend tracker to forecast demand. What’s your next sip of insight? 🍺

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