Ladies and gentlemen, good day and welcome to United Breweries Limited Q4 and FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jorn Kersten. Thank you, over to you, sir. Thank you very much. Good afternoon, everyone. Thank you for joining us here on the quarterly results call for the Q4 of the full year 2026. Vivek and I are happy to host you once again. We'll take a bit more time this time around to spend some time with the introductory remarks because we think the situation in the market merits that we give a bit more context on the results as well as in the outlook. Please bear with us while we walk you through it. Let me start there with the category, because in the end, the category remains the most important anchor for how we look at the business as a whole. We're very happy that in Q4 that we saw that category returning back to growth around 10%, and the majority of markets also contributing to growth, which is a big step up from the second half of 2025 and is also widely supported by multiple movements, including regulatory development, improved affordability, on the ground demand conditions. Overall, we're happy that the structural drivers of the category remain intact, and that we see that the beer category in India is actually doing really well in the quarter. Now, at the same time, also important to recognize that the market has become significantly more competitive, which means that winning in the environment has an impact on investments in high brands, commercial intensity, and as a result, while the category is growing, the cost of participation has gone up. Which is also an important context for the performance in the quarter, and we'll speak more about that when we talk about how intentional choices have impacted the quarterly delivery. Now, when we look at the quarter, very important to note that we very much believe that the fundamentals of the business remain really strong. We delivered around 4% volume growth, and I'll come back to that a little bit later on the balance between primary and secondary volume. We see that underlying demand is strong. We see that premium continues to outperform in consistency with our strategy, and we also see that the gross margin is moving meaningfully. In the end, we see that volume, price and mix, as well as our ability to transform the margins, is moving in the right direction. On this volume growth versus the category growth, it's important context to make sure that everybody is aware that while our volume has grown 4%, our secondary volume, so our demand from the market, has moved mostly in line with category. There's a slight pressure on market share, but we're also cycling last year's disparity between primary and secondary. In the end, that 4% is muted versus the actual movement that we see in the market. Of course, we see in the EBIT a decline materially in the quarter versus last year, largely impacted by deliberate choices that we have made. One, very clearly investing behind our brands and behind maintaining our leading position in the market in this intensified environment. We expanded our investment behind the brands with 27% versus the previous year. The quarter is ahead of the peak season. It's an important quarter to invest in the brand strength, and we see it also reflected in the brand power scores that we get back from the market. We're very happy, and we continue to do this in line with our strategy to really grow our brands and invest behind both brands as well as in execution on the ground. We're also advancing with premiumization, where our premium share is ahead of the overall, our premium development is ahead of the overall development of the portfolio, and we continue to invest in our network strategy. A large share of the growth in Q4 came from contract manufacturing, which has an impact in the accounting, but we knew that, so that was anticipated, but it has an impact on especially how revenue and margins are being reported. The last thing that I want to highlight here is that we also deliberately invested into bottle infusion, which also has to do with the environment, more on the macroeconomic scale. We see that there's pressure on supply. We see there's tightness on supply for especially packaging material, highly impacted by the energy crisis driven by what's happening in the Middle East. We also deliberately made sure that our inventory and our use of bottles and packaging materials is a part of to make sure that we first and foremost prioritize continuity of supply. I think, that's something that we also need to highlight that the Middle East situation is expected to have a meaningful input. While we see some fairly minor impact in the quarter, especially driven by this MDI piece, we do see that for the outlook of the year, there will be an impact for the market, driven mostly by energy, fuel costs impacting the packaging cost, packaging material cost. There's currency movements, so the INR performance currently will have an impact on cost as well as the aluminum price, which continues to be extremely high, and we don't foresee that coming down anytime soon. The impact that we see for the remainder of the year is predominantly cost-led and not demand-led. We still believe in the strong fundamentals of the category and demand will be there, but cost pressure will continue to be there in the second half of the year. In the end, I think, it's very clear that we're operating in a sort of two-speed environment, where 1, we see strong category growth, premiumization, and we strongly believe that the opportunity will remain to be there, and India is the growth engine for the global beer market. We also see a rising cost pressure, both on the commercial investments as well as on the cost of production. That will remain to be there, and that's also why we highlighted that in the in the press release that we did. Now, what we are doing and what are the clear choices that we're making for what's ahead of us is that, first and foremost, we will continue to serve the consumer. We will continue to also drive premiumization. We will invest behind the brands and behind the category and take a role as a category leader. We will also continue to optimize our network and capacity, including the contract brewers, because we believe that is what is needed in order to be there for the growth of the India beer market. Of course, we will tighten our pricing and revenue management in the current outlook. We are closely collaborating with the cross-functional teams to make sure that we drive pricing and that we drive the right mix decisions to make sure that we are where the consumer wants us to be also from our pricing, but where we also try to mitigate as much as we can the cost pressure in an environment which everybody knows is heavily regulated. There, it requires additional efforts to make sure that we are able to translate some of that cost pressure into top-line pricing. Of course, on the EBIT outlook, there will be an impact. We are working hard to further work on pro-productivity programs to make sure that we convert the healthy growth margin also into EBIT margin, that we make sure that we mitigate and anticipate the cost pressure which is ahead of us. That's not only true for the P&L, but as much for working capital and cash generation. I think we see in the shape of our P&L that we continue to grow also when we look at our investments. We're making headwinds on our investments in our greenfields, as well as in investing in the stores with high expansion of our number of coolers, which of course also impacts our depreciation. Throughout the shape of the P&L, we can see that our belief in growth and in structural growth is well there, and that UBL is positioned to grab the growth of the market at least proportionately. I think the current performance in the quarter is mostly a result of deliberate investment choices impacted by the local environment as well as by the macroeconomic environment in which we operate. We're confident that the category will remain resilient over time, that our strategy is still the right one, and that we're taking the necessary actions to make sure that we're set up for future growth as well as sustained delivery on our financials. Before we head to the Q&A, I happily invite Vivek to give a bit more color on the introductory remarks. Jorn, thanks for this. I know, I think all of you are joining the quarterly call, I would say that this has been one of the quarters where we really had to step back and think about the structural financials in the category and what's going to happen for the year and the year to come. A lot of it was driven by Middle East war and the impact because as we mentioned, that we are sitting on an INR 400-500 crore impact. You know our profitability for last year, we had to make clear choices to do that. Before that, I would say a couple of things. First, great news that category is back on growth. I think in the last two calls, we had conversation about what will happen to category, when we see going back to growth. The good part is the category has come back to growth at 10%, and it has not happened by chance. I think it is the function of, I would say, three things. Number one, the deliberate effort with Brewers Association of India, you know, where UBL is a key participant other than other players, and UBL itself we have made with the regulators around the excise policies. If you actually see in the last nine out of 10 policies which have been released, there has not been any tax increase on beer, and there has been a relative tax increase on spirits. The number 1 driver of category growth is the relative pricing of spirits and beer. You know the difference between that. We have seen that in almost 14 states, one-four, which is almost 42% of our business, we have actually grown more than 30% in the quarter, three-zero. Not, not mixing the words there. I think the first important thing is the effort on the policy front is a big driver of the category growth, and I'm not even talking about Karnataka and all, which is not into implementation. The second big one which Jorn has said, there are deliberate investments which UBL has done which are translating into category growth. You know, there are states where the category has almost doubled. We have invested in capacities, we have invested in quality, we have invested in innovation, we have invested in our brands. Premiumization is a great example. You know, we are again, we are back on 16%. You saw that we are also investing in future with the work we are doing with Soufflet on Maltex or Crown and others on the cans to really see that there is a future of beer in the category. I think the investment what we have made is leading to the category growth. Third is the high competitive intensity, because when not many players are investing to get the pie in India, consumers are hearing more about beer. They are seeing more investment, retailers are seeing more investment, and we know that when category investment goes up, it really helps the category grow. Our data suggests that some of our competitors have invested 3x, 4x more. You know, we have not increased our investment to that level, but we continue to increase our brand power despite the investment, which means we are at least investing in the right things. They're not buying the volumes, you know, and deliberately, you know, not diluting the category. The number one thing I want to bring to your attention, we're extremely delighted that structural interventions are leading to the category growth. If the Karnataka policy comes through or what we are seeing the momentum this quarter, I think the category growth trend will continue. The second important thing I want to bring because some of you I read statements after our results. I want to say that the work which UBL has done over last couple of years, we don't have a supply issue. I want to bring it to very clear, we don't have a supply issue. We have invested a lot in the last two years in building a supplier base of bottles, we don't have a supply issue. We also don't have a supply issue on cans, you know, because we have the global network, and we have identified these suppliers. We don't have a supply issue. None of our results are because of supply issues, and we don't expect supply issues to happen. In fact, it will be a competitive advantage for UBL because we have those suppliers tied up or we have worked with our suppliers on a very strategic manner. We have an inflation issue. We have a cost issue, not supply issue. I want to just clarify that any of the demand or the category growth momentum continues, for us it will not be because we could not get the supplies. It would be maybe we chose not to supply because it is too prohibitive for us to supply, but we don't have a supply issue. The third thing I would say that because we are the only listed company, the other meaningful listed company had major issue in MP on the beer one. I think, you know, my understanding is the impact on beer industry because of the war is disproportionate. This is a time where we had to make choices on how we want to run the business and where we want to run the business. For me, at this point of time, the key focus is consumer. We need to make sure we the supplies are available. The focus is to really have very tough conversation and transparent conversations with all our stakeholders, whether suppliers or regulators, to make sure that we create the long-term value for the category, and I'm very proud that UBL is leading that effort consistently. You know, we are not watching from the behind. We are actually leading it because this is a time where the structural economics of category has to be addressed. We are also working to make sure that we continuously invest in the brand, and we are also very clear that we also are responsibly investing the money. There are states, I won't name them, where we have seen, you know, you know, there's lot of trade spend being done even where category has no money in that state. In a, you know, in a state like Telangana, we have seen some of our competitors actually throwing trade spends, which is which doesn't make sense. It actually doesn't encourage regulators to even think about the category long-term sustainability. We are very clear on those situations that we will follow the right path. I do think that category growth is strong. We are in a position where our supply chain is strong. Our localization efforts are working. Our premiumization, our gross margins are up 330 basis points. We are making deliberate choices. You know, some of the choices we made this quarter is to store more, use more new bottles versus old bottles so that we can replenish new bottles faster because old bottles we can use any time in our brewery. Some of the choices we made on making sure that we actually clear some of the inventories because our primary is 4%, but our sell-through is 8%-9%. I also saw some notes where they said there's a big gap between four and 10. Actually, there's not a big gap between four and 10. Actually, it's 9.5 and 10 in our books. This is one of the reasons, you know, we had more business from our partners because we also corrected some of the inventories in anticipation so that we can actually have more fresh beer and do that. Overall, our cost program is ticking on very well. Our people cost is much below our goal rate now. We have made right changes in our structure. Our cooler program is doing extremely well. Our brewery expansion is on track. We already got the land in U.P. The civil work has started. Our can line in Telangana and in Maharashtra will be available before July. We have one greenfield, two can lines, cooler investment, CapEx is going on. The brand power scores are extremely high. I think we are feeling very strong. However, there are big headwinds in the category, and we are not shying away from it, and we are structurally working to mitigate what we can. Can we mitigate all of it? We don't know. It depends on how much the war impact lasts. As I look at today, the, you know, the some of the things like oil prices, Indian rupee, gas prices, I think they are all going northward. We really need to see through it. We wanted to bring the reality. Our focus as company will remain to drive category growth, to serve the consumer and keep unlocking the potential of beer which is there, and it will not impact any of our CapEx plans. With this, I think I open up for any questions you have. Thank you very much. We'll now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask the question. The first question is from the line of Abneesh Roy from Nuvama Wealth Management. Please go ahead. Yeah, thanks. Firstly, on the cost impact, you mentioned INR 400-500 crore cost impact next 2-3 quarters. I wanted to understand the assumption. I do understand glass uses a lot of fuel and fuel costs had gone up a lot. If I see today, it's down, say, 8%, and last 3-4 days it is down 15%. For example, if this geopolitical issue gets resolved in, say, next one or two weeks, crude cools down, then does this still arise that INR 400-500 crore cost impact happen? What is the assumption here? On the supply side, you answered very clearly that you have taken care of. Of course, this time the El Niño is a very favorable, climate for your kind of category. Are you factoring in all that and, both on aluminum cans and the glass bottles, if you can reconfirm, given the very strong demand and now Karnataka policy also positive? Are you absolutely sure that supply side there is no risk, inflation is there? If you could answer both these. I think I'll answer the second question, and I'll ask Jorn to help in the first one more detail. I think we are very sure. We are very clear. You know, I think, yes, there is a positive momentum. You talk about whether Karnataka policy can be there and all of this, we don't know what will be the final blueprint of the Karnataka policy, right? It has already taken couple of months for them to come back and notify. I think from a pure scenario planning from what we need, we are fine. You know, we don't have a issue. It is because over the last two years, Abneesh, we have increased our supplier base and we have worked on this very diligently, so we are ready for the growth. Yeah. On the cost impact, I can highlight a little bit more on the assumptions. Obviously, I think like everyone, we would applaud if this issue will be solved within the next two weeks. Who knows? However, even if it does, our assumption is that the impact on cost and for cost to normalize will take much more, and it will be here for the next couple of months, if it ever comes down. So we do have assumptions around crude oil, where we believe that it will not be below $100 or not far below $100 even if things normalize. It's largely dependent on the impact of the gas import in India with the high exposure. We know all that, some of the CapEx has been seriously impacted. Even if the conflict is resolved, it will not come back. We assume that the aluminum is north of $3,500. We also don't expect that to come down very quickly. I think as much as we hope and still have faith that the conflict will resolve, the longer term impact will be there. We see, of course, on the demand side that I mentioned in the opening, on the opening remarks, that most of the impact is cost-led. We think that Indian consumer and beer market will be resilient. Of course, we're also closely tracking what happens with local fuel pricing. So far, no movement yet. As soon as that happens and consumer will see the pricing, we also have to take into account that there might be an impact on demand and the level of discretionary spend, where we also see the notes that inflation, food inflation will go up to around 5%. Obviously, we can expect that it may have an impact, but we also think that there's enough tailwinds on the category that we for now only foresee the cost pressure on the outlook. Sure. One follow-up, Vivek. Obviously you have worked in FMCG such a long time, and all FMCG companies in this quarter call are saying market share gains from local players. I think you also highlighted that, because you have tied up on the sourcing side of packaging, which I think for local players is very difficult. Are you already seeing that some of the local players or some of the maybe smaller players are already not able to meet up on the packaging side and that is leading to opportunity and market share gain for you, say in April month? Actually, no. I don't think that, you know, probably they understand or they have done all the impacts yet. Getting into the season, the volume looks good, momentum looks good. For us, when we give the plan, when we talk of 400 - 500, we need to look at the full year impact, the rest of the year impact on what's going to happen based on seasonality, non-seasonality and other things really come together. I also think that different players are seeing impact at different levels. You know, I've definitely seen in some of our contract brewers have stopped manufacturing their brands and say, "Do you need more supplies? Because I can't source the material." We are seeing that trend happening more and more. I would say that not in April, but I do expect in couple of months you will see that even more on that. Understood. My last question is on the 2, 3 specific state. Karnataka, when the initial policy came, it seemed very positive for beer. When the final draft came, it seemed less positive, but still positive. If you could tell us what is the current understanding. I do understand lower end of beer there is better profitability. Now let us ignore the Iran crisis because that changes picture. What is the current situation on the Karnataka? If you could tell us on Telangana. One last one. On Telangana, there have been news reports of 12% to 15% hike. Any update on that? Thank you. Yeah. I think first on Karnataka, I think first of all, politically the policy direction is very positive. I will put it into two parts. One is ease of doing business. I think ease of doing business, the government has already made significant progress. Like, you know, the brewery can dispatch 24 hours. The licenses has a increase. Labeling and all will be digital. I think very welcome move there, which used to capture a lot of unnecessary time and energy there. I think the second one is on the policy itself. Now, of course, the final fine print we have to see. I think the direction of moving to taxation linked to ABV is very positive. I think it will lead to a significant growth in beer category and significant growth in consumption of beer if it comes through. Of course, we have to wait for the final details, but I would say, you know, wherever it nets up, it will be a net positive where it stands today. On Telangana, I don't think we have got any pricing fees or notification or anything like that. In fact, we are in a significant conversation there because the government needs to understand that this is a unique situation and we are still as an association and as a company in talks with the government there. Sure. Thanks a lot. That's all from my side. Thank you. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Harit Kapoor from Investec India. Please go ahead. Yeah, good afternoon. My first question was on the competitive intensity you alluded to. Just wanted to get your sense on apart from say, you know, contract bottlers or very small players who have moved, or have stopped doing their own branding for a bit. Some of the increased trade spends and those kind of activities that you are seeing, are they from the other significant players? Are you seeing a reduction in that as well as we are moving forward? Like in April month, have you seen that come down as well? You know, what's your kind of thought process on that? Do you see overall competitive intensity even with the other large two players kind of coming down because of what you're facing they are also facing? See, look, I think our business is state by state, making a overall picture is very difficult. I can split it in two parts. I think one is in the first quarter we saw the overall media spend on the surrogate brands on the category went up 4x, right? Our spend, it was not us who increased the spend on 4x. There are other significant players who are spending much more on media sponsorships and all. We have also seen trade spend increasing in certain states significantly. We have seen in many places the trade spend is increasing even where there is an opportunity to buy short-term volume. I would say that yes, we are seeing an increased spend by the competition. We haven't seen any reduction in that intensity yet. We are also very clear that it is extremely important for us to stay competitive where we are, but it is also important for us to make sure we are structurally working on improving the health of the category. I think, it is intensity is high right now. Got it. Got it, Vivek. The second bit was on the INR 400-500 crore number that you spoke of. I wanted to get your thought process on what in your mind could be the mitigating factor or the offset factors to this. Obviously there are couple of big buckets. One is price increases in open market states. Hope of price increases in government controlled states. Then there is your own kind of bottom up that you can do in terms of cost. You know, how many of those things are already, you know, in have already been actioned? Where we are in that kind of journey, you know, any thought on, you know, how much can be mitigated? No, I think it's a great question. I would say that, look, I'm extremely proud of how the team has rallied and seen this crisis as an opportunity. I can safely say that at least half of this, INR 400-500, we have firm plans to mitigate already. Whether it is our own productivity drive, whether it is selective pricing, whether it is reducing trade spend in the markets which doesn't make sense for us or the category profitability is very low. For example, in one of the market we moved to zero trade spend. You know, I won't name the market for competitive reasons, but we moved to zero trade spend, so that because there was, you know, we didn't see that gross margin in the market to do that. The work we are doing on consistent improvement on our own productivity and production excellence, I would say we already have firm plans of somewhere between INR 200-250 crores, which is already done, dusted into execution and all. We are also working on another similar ideas, you know some of them really depends on whether we get pricing in Telangana or not, whether we get pricing in some of the other states or not, because like Tamil Nadu and other states as well. We also are very aware that we don't want to make beer unaffordable by doing all of this because we have been struggling to talk about affordability of the category and all. Some of it we will have to absorb, at the shock, and we also don't want to remove our capability in the short term because we are clear. Sorry to interrupt. We are losing your audio slightly a bit. Sorry. Sorry. Sir, can I disconnect and reconnect your line, please? Participants, please stay connected while we return the management back to the call. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Sir, you may go ahead. Harit, if you can just assist, where he stopped. Yeah, I think just to summarize very quickly, I think on your question, half of it is already we have firm plan on mitigation. Other half, we have ideas, but it will take a lot of work. Also, we also don't want to make it completely unaffordable for consumers, right? Because we cannot cover all the gap through this. This is why we wanted to give very clear view of what's happening. What are the potential impacts? Great. Thank you for this. I'll come back in the queue for more. Thanks. Thank you. Next question is from line of Latika Chopra from JP Morgan. Please go ahead. Yeah, hi. Thank you for the opportunity. You know, I just first wanted to check, you know, what was the volume in million cases that you closed FY 2026 with? If you could also share with us, you know, a rough split of how much of these volumes came from contract breweries. I'm just trying to gauge how should one think about, you know, the accruals impact on price mix, you know, as we forecast the growth on revenue growth forward. How do you see this combination changing in FY 2027, given, you know, the supply addition plans you have put in place? Do you want to know what is the salience of our own breweries versus the contract breweries? Yeah, just trying to gauge because, you know, this time if you look at, you know, the price mix, trend declined 7%, that was quite steep during the quarter because of higher salience of contract breweries. Just trying to see, you know, how are we shifting between own and contract breweries. Yeah, I think I won't give you the exact details right now. We can come back to you separately, Latika. I think I would say I won't worry too much about the price mix of this quarter because I think we will have a healthy price mix. This quarter has a combination of couple of things. I think one which is absolutely the sourcing mix, because we took an inventory correction where in our own breweries, which means that the primary is much lower than actually what we supply to the corporation markets or other distributors. That is why you see our earnings are lesser because the primary is lower, and that increases the salience of the CBUs. Which is, I think, the deliberate correction we did to make sure we provide fresh beer, and we also ready ourselves because of the war scenario on the raw materials and packaging materials and our contracts which were there. I won't read too much into the - 7% as a structural thing. I think going forward, our CBU contribution is around 20%-25%. It will vary depending on the month and the policy and all. We still have significant presence with our own breweries in the country, which is only going to expand as well with the U.P. coming in next year and with the can lines coming up by July in two big markets where we, like in Telangana, we don't have our own cans. You know, we bring it very small, but now we'll have a big capacity. Even in Maharashtra, we are going to have more capacity, which we bring to from some of the other markets. I would not worry on that part, but we'll send back some of the details you are asking. Sure. Can I then ask you know, you closed FY 2026 with a 3% volume growth. Of course, the year was marred by, you know, various issues, you know, whether on weather or on regulations. As you look towards FY 2027 and assuming a normal, you know, season, and you clearly said supply is not an issue, from a growth perspective, do you think this will be the year when we can probably aim for that mid to high single-digit volume growth with probably, you know, a mid-single digit kind of a pricing on the underlying basis? Absolutely. -bit confidence on that? Absolutely. I think I will be very disappointed with the effort we've done, which I talked in the beginning on structural levers to drive category growth. The investment we had made on getting cold beer, the networks, the premiumization, the brands and innovation. We think this should be a high single-digit category growth year. You know, our own forecast is somewhere between 6%-7% volume growth. It should translate to a double-digit revenue growth. We already seeing that momentum in the first quarter. As I said, you know, barring that, some of the structural thing which we did, our secon daries were up 8%-9%, and our volume is up 4% and premium is up 16%. Yeah. That's just to add, that gives us confidence and, of course, like I said, we keep a close pulse on what's happening on the demand. We're also confident because we're cycling, like you mentioned, these two quarters from last year where demand was absolutely muted because of adverse weather and other elements playing their part. Knowing that will in itself create a tailwind for category and volume growth in the quarters to come post the peak season. We're quite confident that we're on the right trajectory for this one. Yeah. I'll just add that I think, while this will be the momentum and the growth, I'm very clear I'm not going to hesitate to take tough calls where in the states the structural profitability is not there because of regulators. This is a time when the industry is in the crisis, costs are going down, we are not going to do charity here. I am also very clear that, you know, if we have to take some tough calls, we will take the tough calls. Thank you. Latika, I'll request you to come back for a follow-up question. A request to all the participants, kindly limit yourself to one question per participant and rejoin the queue for a follow-up. Next question is from the line of Mehul Desai from JM Financial Services. Please go ahead. Hi sir. Thanks for taking my question. I just wanted to understand basically the gross margin expansion that has happened, given that, you know, the realizations were also down, and you had an infusion of new bottles also. This gross margin expansion that has happened, I mean, is it purely, you know, state mix? I mean, if you can explain what has led to this gross margin expansion, and how should one look at that? I mean, when you say this INR 400 crore - INR 500 crore of impact, how much of that impact will be seen in the gross margins? Yeah, that's actually two questions. First on the margin expansion that we see on Q4, I think there is one element of source mix that also plays there, where it's the accounting. I think we also are very happy that we see that the work that we are doing on premiumization, that while we made some conscious choices on NBI, we also see still improvement in the efficiency of our operations, of our procurement, that really helps support the sustained and long-term growth of our growth margins, including the capability and the hard work that we've been doing on pricing. If we see that, especially the width of the pricing that we've been able to get over the past 12 months, and that we're also anticipating as part of the mitigation for the time to come, is a proof point that we're really taking up the role as leading the category and taking up the conversations with the regulators that no category can survive without pricing. All of that is resulting into a healthy margin expansion that we see and that we are really going after to sustain it as part of a winning strategy. For the outlook, like Vivek Gupta mentioned earlier, that cost pressure will have an impact on our materials, either direct or indirect, which will lead to an increased cost of production. We do see that with the pricing that we've been able to capture and that will start hitting our P&L in April and onwards, we further identified in states like Telangana and others that are significant in volume, if we succeed in pricing, it will have definitely an impact. Even if the in-state profitability may still remain marginal, given the size on the total margin development, it will have a big impact. In that sense, we closely monitor. Like Vivek mentioned, we need to make the right choices, first, for the consumer to be able to supply. Second, in some cases, the hard choices if business turns out not to be feasible, also to protect our long-term margin. While we first and foremost remain a growth company, we of course take a look at the margin. With the current outlook that we use, we don't see too big of a drop on margins, especially taking into account the growth that we've seen so far. We keep a close eye on it. The bottom line impact in absolutes is currently our bigger concern. Okay. That's helpful. Thank you so much. Thank you. Next question is from the line of Mr. Swaminathan from Avendus Spark. Please go ahead. Hello. Thanks for the opportunity. One question is regarding the CapEx announcements in U.P. and the other two bottling projects. When are they expected to come online, and what is the level of cost savings that we should expect from these CapEx coming on through? Yeah. I think U.P., as we said, the civil work has started. We expect our brewery to start by end of next year, sometime before end of next year. I think the two can lines we expect to inaugurate before end of July this year, depending on monsoons or some other factors which come in. The work is going on full steam. I think it is going to provide first growth opportunity and growth potentials because Telangana, for example, because of the economics, we have not been selling our cans. I think we have almost less than 2% market share on a segment which is growing. This will definitely step up because consumers are looking forward to our brands in the cans when we go to the market, and so it will definitely have a competitive impact. We have also made capital CapEx investment on coolers. This year we are deploying further 16,000 coolers, and we also seeing that, you know, that is also helping in consumption of the brands to really do that. I think it will have an impact on growth, but it will also have an impact on localization of some of the imports we do will become local and will Of course, in a competitive context, you know, some of it we will absolutely invest back because in some of the markets it will take some time also to build this back. Thank you. Just clarification to this is that, so our INR 200 crore of savings that you've been talking about does not include any potential savings from the new CapEx? No. No. It is fully on, and of course, we continuously work on how can we make the investments more efficient. That is nothing to do with this because that is absolutely operating expenses, extra pricing, efficiency in the spend, ROI, people productivity, all every single thing. Yeah. Of course, as part of that plan, we're taking a close look at our total investment plan, and we do make some choices in smaller investments, that we postpone in order to push back on the, on the depreciation as well as prevent, the cash going out. Not for these large growth-oriented investments. We continue to go full throttle on these because we believe that that is what's needed in order to lead the category growth. Fair enough, sir. Thank you. All the best. Thank you. A reminder to all the participants, you may press star and one to ask a question. Next follow-up question is from the line of Harit Kapoor from Investec India. Please go ahead. Yeah, hi. Thanks for taking the follow-up. Just, you know, one question on, you know, where we've ended the year in terms of premium mix in volume and value, if you could just give us that number. That's it for me. The last year, the premium volume growth was 21% for UBL, and we grew market share in premium with 21% volume growth. Our premium mix for in our portfolio is still less than 10%. It's, you know, it's a 100 basis point improvement in our sales to really bring together. The encouraging part is despite all the challenges in the category, we ended up with a 21% growth. The most important thing is we were able to localize most of our premium portfolio, Harit, and that is also reflecting in our gross margins because there are eight locations where we are now locally producing, which is translating into gross margins, which I also mentioned in the last call that you will start seeing the impact. Got it. Got it. This number which you mentioned is on the premium mix is just sub 10% is volume? The volume is up 21%. Yeah, we are talking volume here. No, premium. From a value point of view- Okay, sure. You know, I don't have the exact number because it varies by state or revenue. Perfect. Perfect. Thank you. Thank you. Next follow-up question is from the line of Mr. Swaminathan from Avendus Spark. Please go ahead. Thanks for the opportunity again. I wanted to understand as to has the category seen any tailwinds from Maharashtra after the IMFL price increases there? Given that you have done a lot of initiatives in Maharashtra over the last 18 months, is there any tailwinds which is still left over in terms of benefit over the next 12 - 18 months? I think Maharashtra, the category is growing upward of 20%, and our business is growing upward of 20% as well. I do think this will continue. I think it's a structural change which will continue to expand the category. We know there's a lot of investments are coming in Maharashtra, both on innovation and the category. We're also seeing economy segment in Maharashtra expanding. We saw that in Karnataka that when economy segment expands, lot of consumers they switch their choices from low-end spirits to beer, and especially with this. We see that trend going in Maharashtra. I still think the opportunity in Maharashtra is huge. The way we are looking at Maharashtra is every district as a country now. We have gone to the next levels. We see lot of category growth opportunity within Maharashtra with the same policy regime in large number of districts versus if you take out Mumbai, Thane and all. I think Maharashtra will be a growth pillar unless some dramatic shift happen in the policy over the next couple of years. Right, sir. Thank you. Thank you. Next follow-up question is from the line of Abneesh Roy from Nuvama Wealth. Please go ahead. Yeah, thanks. Two quick questions. Vivek, last two years, you have done a lot of new launches, innovations. Which ones are you most happy and where are their learning? London Pilsner and Heineken Silver, etc. Related question, which other markets, you want to now locally manufacture Heineken Silver or any other part of the portfolio, in the next two years? Any plans you can share? Yeah, no, I think the most excited we are is about Heineken Silver first. I think Heineken Silver is not only expanding the category, but it is actually delighting the consumer. It is 100% malt beer to do that. We have seen the significant growth. You know, we had a bump up because Karnataka we were not able to produce locally, but now that thing is over as well. We are actually able to produce. We are going to expand Heineken capacity in two more places in the next two years since you asked, and maybe more. U.P., as I mentioned, is a greenfield brewery. It will be world-class brewery with Heineken facility. That will serve the North trade. We will also have a location in East where we already started working. Hopefully by next year we will have the Heineken facility ready in East as well. We are also looking at global Heineken network to see from a sourcing point of view. We are very, very excited on Heineken potential. Our recent innovation on Kingfisher Smooth is off to a great start in Rajasthan. The repeat rates are fantastic. It's a great brew. We know in this category it takes time for trials to build in. We are very excited about it. The work we have done on our draft beers, you know, is with Ultra Max now or, and even in Ultra, the recent repackaging, and relaunch of the brand is doing very well. The big learning is that it takes time to build innovation. We cannot measure innovation like in FMCG. Okay, just build the distribution, it will come. Because it takes time to create awareness, especially in a dark market. Second, we need to be on trend and ahead of trend versus me-too innovation. Third, we need to make sure that we actually have a supply chain who can deliver consistency because in beer, giving consistent supplies on innovation, especially when you operate large-scale breweries, you need lower MOQs and all other learning which is there. Thanks, Vivek. One last question on your remark on craft beer. You have also been launching and the larger players also. My question was more on competition from some of the local craft beer, like, I don't know if you have had a deep study of Doolally, for example. Doolally, what we heard from a lot of customers, very premium beer, but the taste, et cetera, of that guava, mango, et cetera, very differentiated and lot of fan following. Do you have a product which can compete with these kind of products, or it's too niche and as of now too premium, doesn't make sense? No, I think flavors is one of the platforms in the innovation. There are different platforms. You are talking about flavors. We launched Kingfisher flavors in Goa and in Daman, we had a very good learnings and response on product stability, consumer preferences to do that. As I said, you know, we have a huge pipeline of innovation. It is a combination of what we want to do and what we want to expand. As a management team, we have decided to do fewer innovations, and very focused and first win in few states and then expand it when we have the right insights, learning to do that. We consistently, you know, work with the local players to understand the new trends and how we partner with them. Thank you. Abneesh, I'll request you to come back for a follow-up question. Yeah, I'm done. Thank you. Next question is from the line of Nitin from HDFC Securities. Please go ahead. Yeah. Hi. Thanks a lot for taking my question. My first question pertains to this, sort of, dependency reducing in our own breweries. This is a one-time, sort of action in Q4. Going forward, the supplies from own breweries will be normalized. Is that a correct assessment? Yes. Yes. I think there will be an impact of, you know, our contract breweries because in some cases those states are growing faster where we have contract breweries. You know, one good example is Jharkhand, where the category has almost doubled since September, October because of the new policy of privatization of retail, and we don't have a brewery. There will be an impact of the mix where we don't have the breweries. Hopefully with some of the other changes which we expect in some of the other states where we own breweries, that will balance out. If you keep those factors aside, there is no reason for us not to utilize our breweries fully. Oh, thanks. Second question pertains to, I guess, some of the disclosures have gone, have been reduced, like your segment performance result, and second, like regional growth trend. I would be particularly keen to have data on the regional trend which you have been highlighting for the past few quarters. Yeah. I think, you know, we thought there were many other questions in mind of people this time. We can always share the data later on. It was not intentional to remove it. It was just that we added few slides on the war impact and we said, you know, maybe let's keep the macro picture and all, but if you're interested we can share that as well. It's a good feedback. Sorry, we, you know, it was not a deliberate not to share. It was more to simplify the presentation, let's call it that way. Thank you. Ladies and gentlemen, we will take that as the last question. I'll now hand the conference over to Mr. Vivek Gupta for closing comments. No, thanks everyone for joining and your participation. I know, I think, you know, it is results are below expectation. We understand that. I, again, as I said, for us, we are in this game for long run. We want to play the role of category maker. The category trend is positive. The effort is really paying off. We need to do more effort on the policy front. At the same time, I think it is a difficult time for the category. However, I think, you know, we are very committed to the category growth. We are very committed to brand building. We are very committed to run a very efficient organization. We are very committed to be very transparent with you so that you can even also understand what is coming. For the first time probably we are giving exact numbers in form of some guidance on the impact, and that was also a deliberate call so that you understand the magnitude of the impact. Because sometimes in other FMCG companies, you know, who are not regulated on pricing, you know, they can mitigate the impact. For us, there is always a lag between that. Having said that, as a UB, as we are fully prepared for the growth challenge, we are going to be aggressive but choice-full, and we will continue to work on the structural improvement on our business. Thanks, everyone. Thank you very much. On behalf of United Breweries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.