United Breweries (UBL) shares surged by 6% on January 20, 2025, after announcing the resumption of beer supplies to Telangana Beverages Corporation Limited (TGBCL). This follows a period of suspension due to pricing and payment issues. UBL aims to resolve concerns while continuing operations in Telangana.
United Breweries Limited (UBL), a leading beer producer in India, saw its share price rise by over 6% following an important update on its operations in Telangana. The company announced the immediate resumption of beer supply to the Telangana Beverages Corporation Limited (TGBCL), which has exclusive control over alcohol sales in the state.
UBL, known for its popular beer brands like Kingfisher, had earlier suspended its beer supplies to TGBCL on January 8 due to ongoing operational losses in Telangana. Despite two years of attempts to address the issue, UBL faced significant challenges, including stagnant base prices for their products, leading to mounting losses. However, after constructive discussions with TGBCL, the company has agreed to resume supplies, citing a temporary resolution in the interest of consumers and stakeholders.
In its exchange filing on January 20, UBL confirmed that TGBCL had assured the company it would address issues related to pricing and outstanding payments promptly. The move is considered an interim decision while UBL seeks to resolve these concerns further.
TGBCL, established in 2014 after the bifurcation of Andhra Pradesh, is the sole government body responsible for managing the sale of alcohol in Telangana. It plays a significant role in the retail and wholesale distribution of alcoholic beverages in the state.
Following this announcement, UBL’s share price surged to ₹2,072 from ₹1,951.50, a 6.2% increase. As of 12:30 PM on January 20, UBL shares were trading at ₹2,042, up by 4.64%.
The resumption of supply is expected to have a positive impact on UBL’s operations in Telangana, as the company has a strong presence in the Indian market and aims to stabilize its relationship with TGBCL.
Stock Performance:
Before this update, UBL shares had gained about 7% over the past year. The stock reached a 52-week high of ₹2,202.90 on September 27, 2024, after hitting a 52-week low of ₹1,645.80 on February 28, 2024.
UBL’s decision to restart supplies is a significant move towards stabilizing operations and improving financial prospects in Telangana.
