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A sobering reality for alcobev makers despite spirited volume gains

Raw material pressures, lack of pricing power key worries for Street despite spirited volume gains

alcohol, liqour, drinks, Heineken, Kingfisher, UB, sober curious
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Gross margins of USL and Radico Khaitan fell by about 354-366 basis points (bps), while those of UBL were down 406 bps YoY due to sharp rise in input costs

Ram Prasad Sahu Mumbai
The April-June quarter (first quarter, or Q1) of 2022-23 (FY23) performance of the alcoholic beverage (alcobev) sector was a mixed one - revenues came above expectations, margin performance was subpar. 

On a low base, the combined revenue growth of the three large listed players —  United Breweries (UBL), Radico Khaitan (Radico), and United Spirits (USL) — was 61 per cent.
 
Higher sales were driven by strong volumes. Growth was led by UBL, which reported a 121 per cent uptick over the year-ago quarter, followed by USL (up 25 per cent) and Radico Khaitan (14 per cent).
 
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