The suspension of supply to Telangana could meaningfully impact near-term earning, given operational deleverage. But United Breweries’ ask is reasonable, Kotak said.

United Breweries Ltd has halted beer supply to Telangana Beverages Corporation Ltd due to a longstanding issue over unrevised pricing since 2019-20, leading to substantial losses. Additionally, unpaid dues from the corporation have contributed to making the supply financially unfeasible.

United Breweries said the unpaid dues by Telangana Beverages Corp had made the continued supply of the company's beer to the state-owned beverage firm "unviable."

TGBCL's failure to revise the basic price of the company’s beer since fiscal 2020 is one of the reasons behind the suspension, United Breweries said.

Telangana contributes 18% to United Breweries' volumes and 15% to its revenues. United Breweries has suspended beer supplies to Telangana Beverages Corporation Limited (TGBCL), the state-owned sole distributor, citing two key issues: no upward revision in base prices since FY20 despite rising costs, leading to EBIT losses, and overdue receivables.

Shares of United Breweries dropped 4 per cent on 8 January after the company confirmed the suspension of beer supplies to Telangana Beverages Corporation Limited (TGBCL). The decision was attributed to financial losses stemming from TGBCL's failure to revise the basic price of beer since 2019-20 and significant overdue payments for past supplies.

The decision has been taken due to the non-revision of the basic price of the company's beer from 2019-20 by Telangana Beverages Corporation, resulting in huge losses in the state

United Breweries said the unpaid dues by Telangana Beverages Corp had made the continued supply of the company's beer to the state-owned beverage firm "unviable."

By Rishika Sadam, Nandan Mandayam and Indranil Sarkar HYDERABAD/BENGALURU (Reuters) -Heineken-owned United Breweries on Wednesday stopped supplying beer to Telangana in southern India, following the state's refusal to allow price rises,

Telangana is India's biggest beer-consuming state, with Kingfisher, including Kingfisher Strong, Kingfisher Ultra, and Kingfisher UltraMax, accounting for around 60 per cent of the total sales. Telangana accounts for around 15-20% of United Breweries’ beer sales and 10%-12% of the company's earnings.