United Breweries posted a strong set of first-quarter earnings. The company clocked in a strong beat on revenue, EBITDA as well as PAT. The management commentary too was quite positive. They said they were optimistic about the long-term growth drivers for the industry.

Speaking to CNBC-TV18 about consumption and overall volumes, Rishi Pardal, MD & CEO, United Breweries, said, “From our perspective, it depends on how normal the situation is. Towards the end of February and upto the third week of April, we saw pretty much normal sales, wherein every state other than one state, we saw consumption at pre-pandemic levels. This gives us confidence that it is really a consumer access issue and nothing else. To that extent, as the situation improves, bars open up, as markets open up, as the incidence of COVID reduces, we believe we will get back to normalcy faster and faster.”

“We did see normalcy in April and towards the end of June and as a result of that, our index of recovery is about 66-70 percent. However, the most important part is consumer acceptance and return wherever access is available. That is really the big news of the last three-four months,” he added.

He further said, “The second wave caught us in the middle of peak season and so we are not where we would like to be in terms of recovery but the confidence stems from the fact that whenever we have seen markets allowing that degree of access, we have seen normalcy in terms of consumption.”

On margins, he said, “There was some amount of inflation on back of strong oil, aluminium futures being much higher, barley prices etc., but there have also been mitigating factors wherein they have been able to take position on commodities, do reengineering on packaging material. So, whatever inflation projections we have, we are able to defray in terms of cost mitigation actions we have in place,” he added.

“The pre-pandemic margins we had in the full year of operations was 12.5 percent EBITDA and best in class historically was 14 percent. So those are levels we would first like to go to and then build from there,” said Pardal.

For the full interview, watch the accompanying video

(Edited by : Dipika Ghosh)