United Breweries up nearly 2% as JPMorgan sees volume recovery, margin expansion

United Breweries up nearly 2% as JPMorgan sees volume recovery, margin expansion

Shares of United Breweries rose nearly 2% on September 16 after global brokerage JPMorgan reiterated its 'Overweight' call and target price of Rs 2,050 per share, which implies up to 12% upside from current market price.

On September 16, United Breweries shares closed 1.8% higher at Rs 1,830 apiece after rising as much 2.8% intraday.

JPMorgan cites sustained premiumisation, category development, distribution enhancement and supply chain initiatives to support earnings of the Kingfisher beer-maker in a challenging period.

"Above-average monsoon rains doused sales of summer products such as beer this quarter, but volumes should recover in the second half of fiscal 2026," said JPMorgan.

Price hikes in several states, better bottle return and recycled glass use, and stable barley costs bode well for margin expansion, the brokerage added.

However, the brokerage has cut United Breweries' Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) estimates by 8% for financial year 2026-2027, to factor in the volume witness for this ongoing September quarter.

JPMorgan expects United Breweries' volume growth to be between 6% and 7% over financial year 2026-2027 estimates, as there would be a recovery in the second half of the year.

United Breweries shares corrected 10% over the past two months, offering a good entry opportunity, said JPMorgan. United Breweries shares are down 12% in 2025 so far, lagging the 0.5% drop in FMCG index.