Yes, thank you very much. Good afternoon, everyone.

Thank you for joining the call for our update on the previous quarter ending December 31, 2025. Vivek and I are happy to give you an overview of the performance, as well as answer some of the questions that you may have.

As a few introductory remarks, this quarter, United Breweries, we delivered resilience and agility with improved margins, and we continued our premium growth, while in the industry we still need to navigate some headwinds related to both weather as well as challenges in affordability, and I think we'll speak some more about that later as well. For the quarter, we did see net sales grow at 4%, largely driven by price increases in key states like, for instance, earlier in the year Telangana, Rajasthan, as well as Uttar Pradesh, as well as the impact from localization of premium supplies, a source mix, and a favorable state mix where we saw some more profitable states ahead in terms of volume development.

All of this, together with operational efficiencies that we've been able to materialize, allowed us to achieve a margin of 45.3%, which marks more than 220 basis points improvement over the previous year. You can imagine, this is quite a nice green shoot as it's the highest gross margin performance that we've delivered over the past three years.

That also supported the in-the-quarter EBIT growth of 86% in Q3, which is also a pretty good recovery from the quarters before. Now, earlier this year we launched our productivity and cost effectiveness programs, which include strategic initiatives around reorganizing our key business functions, optimizing our brewery presence, localizing and further simplifying our portfolio, as well as driving other cost efficiencies.

In the margin expansion, we see some of the early benefits of these initiatives translate into the P&L and the margin expansion. Now, for the longer term, we still believe that sustained investments in brands are essential to building the brand equity and shaping the category in India, we will continue to invest in our brands.

A testament to this is that the UBL portfolio brand power has been the highest in three years' time on the numbers reported over the last quarter. Also, we want to accelerate innovation, and our newest offering Kingfisher Smooth launched in January 2026 and is really set up to support category growth and expand our presence in the strong beer segment.

We've currently launched it in Rajasthan and Karnataka, and excited about the prospects that we see in the first few weeks of this innovation. With these investments, innovations, as well as our commitment to invest some of the savings and efficiencies into our brands, into our portfolio, we are very much committed to continue our journey as the beer category maker in India.

On the regulatory front, linked to that, it remains a very mixed landscape while we see some positive developments in Maharashtra as well as in Meghalaya, which support beer affordability, changes in pricing and duty structures in other states continue to have their own challenges. That remains a mixed bag.

Now if we look ahead, we will as always remain focused on building and shaping the category, we continue to drive premiumization as we've done in 2025, and looking forward to strengthening our brand portfolio as well as advocating for equitable taxation of beer. With the programs underway, we continue to manage our costs proactively, including optimization of our network, and we also, as we've been repeatedly mentioning here as well, continue to invest in capabilities to make sure that UBL is positioned for sustainable long-term growth.

I'm sure there's a few questions before we move to the Q&A part, and I'd like to hand over to Vivek for some introductory remarks from his side.

Hello. Thanks, Jorn, and thank you, everyone, for joining.

As Jorn said, it was a very resilient and agile quarter. I think for me, the most important is the direction in the numbers more than the quantum of the numbers, because this is a reflection of all the hard work which is happening over the last few quarters and the structural interventions we were making on the business and which are all nicely coming together.

We talked in the past about we are localizing our premium business, and if you remember I mentioned that by September, we would be done in almost eight more breweries of localization. That impact has started coming nicely on the margins.

We have also looked at better return bottles, the operational work which we did on that. There is a lot of work happening on organization design, on productivity, on sourcing, on making sure our network design priorities are coming together.

We were caught bit in the middle of last quarter, specially with the rains, specially August end and all, and we have already made investments which we didn't want to pull, which in the hindsight was the right call, because our brand power is the highest in the last three years. We did took some strategic calls in the last quarter knowing where the category is getting impacted and affordability issues are not going away, to repurpose our investments in both the state mix and all.

Our number one priority remains to drive category growth. I'm very proud of the organization because we accelerated many things.

We accelerated our, I would say, the blockbuster innovation of Kingfisher Strong Smooth, which is an innovation on the mainstream, and first major innovation on the mainstream which will drive the category growth, which is at a better margin versus Kingfisher Strong for us, both in terms of pricing and overall value. We think it will not only improve our structure profitability, but also drive straight up and get new users designed for the young consumers who are looking for less bitter.

We accelerated that innovation to two states with a very, very complete effort. The product is winner versus the competitions and also has a very high trial power.

The other thing what we have done is we have done a lot of organization capability work to streamline things like, for example, customer service, logistics, making sure we significantly improve consistency of beer, we improve the storage, we're investing in the season on the preparation of supplies, despite having can shortages, we worked very actively. The category has two challenges.

I think number one challenge continues to be the affordability. I think beer in the key states, like in Karnataka, the category declined 17%, in Rajasthan declined 5%, in Telangana declined double digits, West Bengal declined, and I think we're continuously working through Brewers Association of India and with the regulators to show them the data.

We are seeing some green shoots with couple of state governments coming with the policy and not taking taxation on beer, but there's a lot more to be done there. The second challenge, of course, is weather, and we're hoping that the summers will be around, and we'll see how those impact happen.

We are going through an inflationary environment as well, specially on aluminum prices, which will impact cans, and barley prices will also be there. We are also very conscious that cost of sales will increase.

Our productivity program could not have come at a right time, and it's not one-time activity. It is a routine excellence what we are trying to do in our sourcing, in our processes, in inefficiencies, in our wastage.

I think we were very glad as a management team, as a company, to see some of those efforts coming in the financials we see. I don't want you guys to get too excited by the absolute numbers and the extent of the change, but what we are saying is directionally we're in the right direction, which is we'll grow the category, improve the margins, and we will fund the growth and we'll be very aggressive.

Many of you would have seen our execution in Women's Premier League, where for the first time we've become marquee sponsor, and the Kingfisher brand's being played, and at the same time, our premium portfolio, Heineken, Heineken Silver, Amstel Grande, Ultra, Ultra Max continue to have the momentum and the strong plans what we need. Happy to answer any questions at this point of time.

Thanks. My first question is on the margin surprise, and congrats for that, and you have also done non-core asset monetization of land also.

I wanted to understand what will be the competitive intensity given Bira kind of player, clearly, in terms of presence has gone down significantly? Do you see that as a cost advantage in terms of advertising spend?

Oh, actually we are seeing the competitive intensity quite high, because when the category is not growing volume, it's a tough time. Everyone wants a pie on a high fixed cost business.

I think, as I said that many times that our focus is on category growth. Actually we feel that more spend in the category will actually help to drive category growth, because the number one thing we need is to get back to growth of our volumes in the category.

We are seeing a lot of competitive intensity from the local players, some global competitors, in some cases, we're seeing some spend from the competitors which are basically buying volumes at a savings, but we don't want to get into that trap. Having said that, I think it is very competitive, but we really hope that this drives into category growth.

I don't mind us losing shares if the category is going up, but it's not a healthy sign if the category is declining, and I think the category must bounce back from this quarter, and that is why I think the intensity is there. On Bira, if you actually see, the Bira share is only 0.1, and it has never been a significant share.

It was big in couple of states, but we don't see much impact because of Bira intensity coming down.

I had a question on state specific take. For Maharashtra, you have done quite well this quarter.

My question is, now that Maharashtra made liquor is ramping up, and that's more affordable to customer, do you see that beer growth rate [unclear] in Maharashtra? The laggard states like Karnataka and Bengal, soon we will see the favorable base lapping up.

Would you expect a strong FY 2027 assuming season is normal? Because no one can predict season.

Just because of these two states, how do you see?

No, I think we want to continue to see the momentum in Maharashtra, because as I said the category growth opportunity is huge in Maharashtra, while MML impact we have to still see because it has come in and it's very early days, but we see a lot of opportunity in Maharashtra. We'll be fighting that.

I think Karnataka, as you said, has been the capital of beer or the capital state of beer, it has to bounce back in Karnataka, and that's why we are also confident and betting on our biggest innovation with Kingfisher Strong Smooth. We accelerated in Karnataka to help drive category growth.

We also have Heineken Silver, Amstel Grande. We have a full portfolio in Karnataka.

At least in January, the operational issues which were there last year on label registrations and all were not there, those are the positive signs in Karnataka. At the same time, we're working with a lot of other governments.

I think West Bengal policy was positive in December where there was a relative taxation of beer got better, we're hoping better. We're hoping that Telangana, Orissa, Rajasthan, some of the other states also address the affordability issues or the relative pricing.

I think there will be ups and downs. Jharkhand has been not positive based on their policy on privatization.

Which we have to see, but yes, as I said, we are positive, but we have to see how much it bounced back because affordability is still a real issue. Relatively it will improve, but if the prices remain where it is, we have to just see that.

You're right, there're going to be plus and minus on this. There are green shoots on category growth in January.

We are already seeing category coming back to 4-5% level in January, so that's a positive sign.

Last quick question. You spoke about the aluminum can inflation, but gross profit still is up versus the overall sales, there is a gross margin expansion.

What has helped here, and do you see this turning a bit more under pressure given the aluminum inflation? Second is other expenses down 4%.

Anything sustainable in that line item?

Sorry Avneesh, the second question your voice was breaking.

Other expenses down 4%.

Other expense?

Sorry, the voice was breaking, but let me answer the first question, Abneesh. I think aluminum cans is a watch-out, but if you see for United Breweries, our strength is bottles.

A significant amount of work we are doing for return bottles, and that has really helped us on the gross margin expansion. The other thing is the state mix and where we produce and what we do on that.

We are building the can pricing and the imports you have to do into our plans, but these will be the headwinds which may not lead to this level of margin expansion. In our own estimate, we got 220 basis points of gross margin expansion, we think 50% of it could be structural and we should continue to build on that, and many of these will have working on it.

We've also taken pricing on cans in the selective market wherever we can take, because pricing is a lot of it's government driven, there's a plan we're working on it.

Hi. Good afternoon.

The first question was on the revenue bit. You've seen almost a 5% realization improvement this quarter.

How much of this is the pricing that you spoke about where you've been able to get some incremental pricing, and how much of it is mix led because markets like West India, specifically Maharashtra did well? Just give us a sense of what proportion this is mix or proportion this is price.

I'm sorry, Harit, could you please repeat the question?

My question's on realization growth, which is almost 5% this quarter. How much of this was price, and how much of this was mix?

Just some sense will help there. Thank you.

That's my first question.

Yeah. Harit, thanks for the question.

It's approximately 50/50 between price and mix, where we see in pricing we see in some of the big volume states like Telangana and Rajasthan we have pricing from earlier in the year. On the state mix, we see that Maharashtra and Karnataka mainly were ahead of the pack in terms of volume growth.

It's a combination which pans out in approximately 50/50 split.

The earlier participant asked about gross margins, I understand that part of it again is mix led given that markets in the West have done well and Telangana, Rajasthan not so much. How much of this would you really attribute again to state mix, this sharp improvement of 220 basis points, because once some of these other markets start to lap the decline and start to grow, we should see a more normalized gross margin, I just was coming from that angle.

It's a combination of things. Look, I think like Vivek mentioned, we're very happy with the direction this has grown, because we see in the margin expansion that we recorded in the quarter, we see that part of it is also showing the green shoots of the initiatives that we did and a good performance as well on, for instance, the bottle returns.

Sorry, are you still there? Can you hear us?

Yes. Okay.

I can hear. On that if you look at the total of 220 basis points, we think that roughly 50% is underlying performance improvement, which is a combination of better return bottles, the local sourcing that we have in Andhra Pradesh, and as well the favorable state mix.

In that mix, I do think you could say that there's a part also driven by the favorable state mix. Obviously, we also try to drive that in terms of how do we push for our business to, of course, accelerate in the regions where it's more profitable versus others.

That remains a bit of a volatile thing.

Of course. The returnable bottle kind of mix, maybe if you could give a sense of say YTD what that number is versus what it was last year, any kind of direction which you have.

Just wanted to map your improvement, how it is kind of panned out.

Year-to-date, we are at 36.7 new bottle infusion, and it's been a continuous growth story. This is top of my head, I would say the sixth or seventh quarter in a row that we're improving on bottle returns, lowering the impact of new bottle infusion despite the fact that we also continue to grow, especially on the premium side.

We've mentioned that before on these calls that with premium growth accelerating, we also need to get to significant share of premium in order to see the bottle returns also helping for premium to become value accretive. In some selective pockets in the markets, we start seeing some of these improvements coming through to the P&L.

I think that's something that adds to what Vivek was saying on direction. We were very happy with how this is going, because it means that structurally we're improving the business.

However, this is still very selective, but overall on bottle returns, I think we've done really good work and we continue to see the improvement, and that also, of course, reflects in our ability to have return bottles on the premium segment.

Great. Just the last bit was as the earlier participant asked, Karnataka comes into the base from January, that data is now visible.

Even Rajasthan, Telangana, the impacts were started to play out in quarter one, quarter two, you're lapping some of those kind of lowish bases as well. Vivek, do you believe that this 6-7% industry volume growth trajectory is a reasonable ask going into FY 2027 after a fairly challenging year?

I think on the longer term, yes, we still very much believe that that's where the industry is heading, and we do expect some acceleration post cycling some of these items that you mentioned, as well as last year where we see the benefits of pricing in Telangana and Rajasthan, but it has an impact on industry volume in these particular states, as well as across other states. That continues to be a bit of a damper, but in a longer term, we still see that number.

Short term, we still see headwinds cycling that pricing, so that will take a few months, as well as preparing for the season. We did well last year, on the shorter term, yeah, we see green shoots.

We're not there yet from a category point of view in the mid-single-digit sort of area of growth, but for longer term, we still believe that's where we need to be.

Hi. My first question is regarding visi-coolers.

What are the discernable benefits that you have witnessed so far in the areas where you rolled this?

I think, good question. I think, as you said, we are consistently increasing our investment in the visi-coolers.

I would say versus 2014, we have actually almost 2.5 times more visi-cooler in the market. We are seeing almost not only a category growth in those stores, but also share growth for us in those stores.

I think there is a lot of opportunity because the beer is sold cold, and we have to continuously drive it, but we are absolutely seeing a positive momentum on the category and our shares in the stores where we're doing visi-coolers. We're measuring it.

Of course, there is an impact of weather and affordability and so we'll have to see the data over a longer period of time, but directionally, we are investing more this year versus last year based on the positivity we are seeing on this.

Thanks, Vivek. How many stores do you have visi-coolers now in terms of number at the end of December?

In more than 35,000 stores we have visi-coolers.

Okay. My second question is regarding barley inflation.

In the last quarter, you had mentioned that you were expecting high-single-digit inflation. What is the latest view that you have here?

No real change on the barley. I think barley remains one of the input materials where we see some higher inflation.

On the other input materials, actually, we see pretty good developments. We feel good about the bottles.

Like Vivek mentioned, we need to watch out for aluminum. I think over the past couple of weeks the global price for aluminum had quite a bit of an increase, so that's something that we watch.

I think we're covered for the first couple of months, and specifically maybe on both cans as well on barley, part of our focus is on localizing supply. For cans, we still are looking at some imports for the year, which we can hopefully cover with the help of partners in years after.

For barley, we've managed to completely localize the supply to India versus previous years where we also had to do imports, which of course come at a price.

What's the issue here on barley? From what I gathered, the barley sowing so far has been ahead of last year's levels, what is causing this inflation?

It's an MSP increase, because as you know the minimum support price in the key markets have gone up to do that, and to encourage farmers, we usually pay slightly higher based on that, I think it's MSP and the inflationary increase virtually.

Thanks a lot.

Hi, thanks for taking my question. Wanted to understand more on the market share trend, how it's been shaping up, especially for us and in the key states like Maharashtra, Madhya Pradesh, or some of the other major states, if you can just throw some light on that.

I think for the full 2025, we actually grew almost 90 basis points of national market share. Not only that, we also grew I think around 180 to 200 basis points of premium market share.

Our market share trends for the full year basis are there. There are going to be some fluctuations quarter-by-quarter because of the state mix where we are highly developed, but overall, I think we are in the ballpark range of 48% to 49% market share as a company.

As I said, our biggest priority is to drive category growth. Again, we are actually not talking market share among us as much.

The key priority, as Jorn said, we need to get to long-term 6-7% growth. The last year was tough because of the affordability as weather.

We need to see how the weather holds up and how much impacts, I think that's where we are.

Understood. A second question was on the Telangana.

What is the status in terms of the receivables that we have over there, and how much improvement are we seeing in terms of the receivable trends?

We continue to face challenges in Telangana as an industry. I think we have got some good improvement in the past overdues which were there.

Also the new overdues have increased. I think it's a constant effort to work with the government and to bring the part, but I would say it's a continuous range.

I won't say we are in a better position or there, but this is something we need to work because the total exposure for us still remains the same.

Quite helpful. Thanks.

Sir. Thanks for the opportunity.

Sir, I have a question on our cost and productivity effectiveness program. The 3% to 6% savings that we are highlighting, would this be the gross savings or net savings net of reinvestment, number one, and this will be on FY 2025 revenue base?

If you can just clarify this particular thing.

We're talking gross savings here that we aim to materialize over the next couple of periods. The savings that we generate from these initiatives, we expect to partially flow through P&L, and a significant portion is planned to be strategically reinvested so that will drive the future growth, that we support the brands, that we support our premiumization efforts.

This will include a wide range of investments, take, for instance, to impact affordability of beer and to make sure that we do the right brand-building activities, putting money behind innovations like now Kingfisher Smooth, enhancing competitive positioning. These type of things across our key markets to make sure that we continue to invest into long-term growth.

First and foremost, we need this in order to be able to invest behind the growth, and then we'll see how well we do versus the initiatives. I think that's the main driver from launching this is making sure that one, we become more resilient in volatile environments, but two, that we really generate funds to invest behind long-term brand building.

Sure, sir. This savings should materialize over what period of time frame?

Between 2026 and 2028. It's a longer-term program, and you will hear us talk about this quite a bit, I think, in coming calls because it's also about structurally improving the business.

It's definitely not meant to be a short-term, knee-jerk exercise. This is really about long-term improving the business.

Sure, sir. Thank you.

That's it from my side, and all the best.

Thank you.

No, thanks, and thanks, everyone, for joining and asking questions. As we said, I think we are on a journey of being category makers.

I think what Jorn said, our focus is on structurally improving the health of the business, bringing real consumer innovation, retail excellence execution, leveraging our footprint of our breweries and our partnerships, and really creating the excitement of the category. Right now the other big focus is to really advocate about differentiation of beer, why beer is different from spirit, why beer needs equal taxation, why beer is required in terms of the economic value it adds.

There's a lot of work happening on the category. As I said, we feel very positive about the structural improvements and the trends and the hard work of the organization coming together, and we feel buoyant about the prospect of the category in medium to long term, and we'll continue to invest behind our brands and innovation.

Thanks, everyone, for joining.