United Breweries Company analysis

Ticker : 532478/UBL

ISIN : INE686F01025

Industry analysis : Drinking of alcohol is not new for India. From ancient times, Ayurveda, Ancient Indian way of treatment, use aasva and aarishta which are basically alcohols.

Even though alcohol drinking is extremely regulated and accept something like taboo, indian Alcoholic beverages market is growing with the rate 10% from 2007. Total beverages industry in India is valued around US$12 Billion. Alcoholic beverage market is part of it with milk base and non alcoholic soft drinks. Indian alcohol market is dominated by Whiskey however the wine market is expected to grow with high CAGR.

As the income levels are increasing, it is expected that that expenditure towards alcohol will also increase. As big part of Indian population is young, it also expected that the demand will not decline very Soon. All because of this, many Global companies are coming in India and acquiring Indian based companies. In 2014 Diageo Invest $ 3 billion and now holding 54.78% Stake in United Spirit. Inshort, Global number 1 Now holding controlling stake in number 2.

Company analysis : The company is India’s largest manufacturer of Beer. The company sold it’s brand across in India and 52 countries. The The company’s product portfolio is big and include many big brands.

  • Kingfisher strong
  • Kingfisher premium
  • Kingfisher draught : Beer in Can 500 ml package. Specially Manufacturing for the people who love ‘Beer on tap’
  • Kingfisher ULTRA – Super premium Beer for newly emerging markets ,
  • Kingfisher blue – Specially Targeted for Young people and taking care for Sporty culture,
  • Kingfisher Red,
  • Kingfisher strong Fresh,
  • Kingfisher Bohemia,
  • Zingaro (Strong bear),
  • London pilsner,
  • UB Export and UB Export strong femous in Karnataka. Thanks to Karnataka excise department, it is beer for classes as the extra tax make it out of the  reach for masses
  • Kalyani Black label and Kalyani Black label strong,
  • Bullet – Fevorite in Rajasthan from launch Because of its rustic and son of the soil image with attractive price
  • Charger, Marco Polo, Kingfisher Ice etc

The company manufactures all of them in plnts including

  • Srikakulam, Andhra Pradesh
  • Kuthambakkam and Aranvoyal, Tamil nadu
  • Ludhiana, Punjab
  • Kalyani, West Bengal
  • Ponda, Goa
  • Mallepally and Kothlapur, Telangana
  • Chopanki and Shahjahanpur, Rajasthan
  • Naubatpur, Bihar
  • Dharuhera, Haryana
  • Nelmangala and Mysore, Karnataka
  • Khurda, Odisha

SHAREHOLDING 

Financial Performance and Ratio 

 2011-122012-132013-142014-152015-16
ROE/RONW9.7911.9813.8214.0313.97
ROCE6.907.389.7310.6612.40
ROA3.844.605.796.687.13
Net Profit Margin3.484.415.325.535.79
Dividend/Share ₹0.70.70.911.15
Asset Turnover110.17104.39108.71120.91123.03
EPS4.686.418.439.7111.14

Future Prospects : As now Heineken is holding big chunk amd Around 99% Stake from Vijay mallaya is Pledge with banks, there is no issue that Heineken is Real owner of the company.

The Future of The company is not under big pressure as the debt issue is not here. The brand Kingfisher is big identity itself. The new promoter is known world wide. In India also it is not big issue to sell bear. Financial Performance of the company is great.

It is stock to keep in portfolio as hardly there is any extra cost for company. It’s Good buy for Long Run which may make wealth with Dividend also.

Invest only if your religion is permitting.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter