Allied Blenders Q1FY26 presentation: Revenue up 22.5%, premiumization strategy accelerates

Introduction & Market Context

Allied Blenders and Distillers Ltd (BSE:544203 | NSE: ABDL), India’s largest spirits company by volume, presented its Q1FY26 earnings results on July 30, 2025, highlighting substantial growth across key financial metrics. The company continues to strengthen its position in the rapidly premiumizing Indian spirits market through strategic brand development and operational improvements.

As shown in the company’s overview, ABDL maintains a diverse portfolio with four "Millionaire Brands" (brands that sell over one million cases annually), including Officer’s Choice Whisky, Sterling Reserve B7, Officer’s Choice Blue, and ICONIQ White Whisky.

Quarterly Performance Highlights

ABDL reported impressive year-over-year growth in Q1FY26, with total volume increasing 17.2% to 8.5 million cases. Income from operations grew 22.5% to ₹930 crore, driven by both volume growth and a 6.2% improvement in realization per case.

The company’s profitability metrics showed even stronger performance, with EBITDA surging 56.4% to ₹119 crore and EBITDA margin expanding 277 basis points to 12.8%. Most notably, profit after tax (PAT) jumped 398.6% to ₹56 crore, benefiting from both operational improvements and reduced interest expenses.

This quarter continues a trend of consistent financial improvement for ABDL, as illustrated in their quarterly performance chart. The company has maintained steady growth in income from operations while significantly enhancing profitability metrics compared to the same period last year.

Premiumization Strategy and Brand Portfolio

A key driver of ABDL’s improved financial performance is its successful premiumization strategy. The Prestige & Above (P&A) category contributed 46.2% of total volume in Q1FY26, a significant increase from 40.4% in FY25 and 37.3% in FY24. This shift toward higher-margin products has positively impacted the company’s overall profitability.

The Q1FY26 brand portfolio breakdown reveals that while P&A products account for 46% of volume, they generate 56% of sales value due to higher realization per case (₹1,233 for P&A vs. ₹840 for Mass Premium).

ABDL continues to expand its premium offerings with recent launches including Golden Mist, the company’s entry into the fast-growing prestige brandy category. The brand was launched in April and July 2025 in Karnataka and Telangana, targeting a market estimated at approximately 16 million cases annually.

The company has also entered the super-premium to luxury vodka segment through a partnership with Roust Corporation to introduce Russian Standard Vodka to the Indian market. The product range includes Russian Standard Original (₹2,400 for 750ml), Russian Standard Gold (₹2,650 for 700ml), and Russian Standard Platinum (₹5,300 for 700ml).

Strategic Initiatives and Investments

ABDL is implementing several strategic initiatives to enhance margins and support future growth. The company has planned investments of approximately ₹525 crore in backward integration projects, including PET bottle manufacturing, an integrated malt distillery, and distillation capacity expansion.

The company’s manufacturing footprint includes two distilleries with approximately 71 million liters of annual distillation capacity, supported by 35 bottling units across India (9 owned, 5 third-party exclusive, and 21 third-party non-exclusive).

ABDL has also expanded its international presence, increasing its export market reach to 27 countries from 14 countries in FY24. Export revenue grew from ₹178 crore in FY24 to ₹206 crore in FY25.

Forward-Looking Statements

Management expressed confidence in the company’s trajectory, with Managing Director Alok Gupta noting that Q1FY26 marks the fourth consecutive quarter of strong performance prioritizing profitable volume growth. The company aims to increase its EBITDA margin from the current 12.8% to over 15% in the medium term through continued premiumization and operational efficiencies.

ABDL’s credit profile has also strengthened, with a second credit rating upgrade within nine months from ’IND A-’ to ’IND A’. The company’s net debt has reduced to ₹754 crore as of June 30, 2025, with the net debt-to-equity ratio improving to 0.47x from 0.49x in March 2025.

Looking ahead, ABDL plans to continue its premiumization strategy while expanding its distribution network, which currently covers over 79,000 retail outlets across 30+ states and union territories. The company is well-positioned to capitalize on the growing demand for premium spirits in India while maintaining its leadership in the mass premium segment.

Full presentation:

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