United Breweries (UBL)

FairStock Score: 35/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 70.84% suggests strong governance and long-term alignment with Heineken.
• 5-year revenue CAGR of 16.01% demonstrates historical brand strength and market penetration.
• Conservative balance sheet with debt/equity of 0.18 and Altman Z-score of 5.09 indicates low bankruptcy risk.
• Piotroski F-Score of 8/9 reflects sound operational and accounting discipline despite the profit dip.

Concerns

• Extremely rich valuation: P/E of 101.02, P/B of 8.99, and EV/EBITDA of 54.39 leave no margin of safety.
• Graham Number of ₹239.61 against price of ₹1483.20 implies a margin of safety of -569.85%.
• Recent performance is weak: sales growth of -1.18% and profit growth of -44.21%, with just ₹81 Cr profit on ₹2,073 Cr quarterly sales.
• Free cash flow is negative at -₹4 Cr and dividend yield is a thin 0.62%, so shareholders are not being paid to wait.

AI Analysis

When I look at United Breweries, I see a fine business at a very difficult price. The Kingfisher franchise and Heineken parentage give it a strong brand in Indian beer, evidenced by 70.84% promoter holding and a 5-year revenue CAGR of 16.01%. But Graham taught me to measure price against intrinsic value, and by that yardstick this stock fails. At ₹1,483, the market capitalises the company at ₹42,437 Cr while book value is just ₹165 per share. The Graham Number of ₹239.61 offers a margin of safety of -569.85% -- there is none. The latest quarter shows why: sales of ₹2,073 Cr produced only ₹81 Cr of net profit, and profit growth has collapsed by 44.21% with sales shrinking 1.18%. Even the full-year numbers are mediocre: ROE of 9.37% and ROCE of 13.88% do not justify a P/E of 101 or an EV/EBITDA of 54.39. On the positive side, the balance sheet is conservative, with debt/equity of 0.18 and an Altman Z-score of 5.09, and the Piotroski score of 8/9 signals honest accounting and operational discipline. Free cash flow, however, is negative at -₹4 Cr, so shareholders are relying on future recovery to justify today's price. The 0.62% dividend is not compensation for the risk. I cannot call this a bargain. It may be a good company, but only a terrible investment at this margin of safety. I would wait for either a much lower price that offers a real earnings yield, or sustained proof that the profit decline has reversed and growth has returned.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer