Earnings call transcript: Allied Blenders Reports Strong Q1 2025 Growth

Allied Blenders and Distillers Limited (ABD), with a market capitalization of $1.56 billion, reported robust financial performance for Q1 2025, highlighted by significant growth in income, EBITDA, and profit after tax. The company’s consolidated income from operations reached Rs. 930 crores, marking a 22.5% year-over-year increase. EBITDA surged by 56.4% to Rs. 119 crores, resulting in an improved EBITDA margin of 12.8%. Profit after tax experienced a remarkable fivefold growth to Rs. 56 crores. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculations, suggesting potential upside for investors. Volume sales rose by 17.2%, driven by a strategic focus on premium and above (P&A) segments. The company continues to expand its product offerings and international presence, positioning itself strongly in the evolving premium consumption market.

Key Takeaways

• Consolidated income from operations increased by 22.5% YoY.
• EBITDA grew by 56.4%, with a margin improvement of 277 basis points.
• Profit after tax rose fivefold, reflecting significant growth momentum.
• Volume sales increased by 17.2%, supported by a focus on premium segments.
• Strategic product launches and international expansion are key growth drivers.

Company Performance

Allied Blenders and Distillers Limited demonstrated strong performance in Q1 2025, with notable gains in revenue and profitability. The company’s strategic emphasis on premium and luxury segments has paid off, as evidenced by the substantial increase in volume sales and improved realization per case. The expansion of the international footprint from 14 to 27 countries further underscores ABD’s commitment to capturing growth opportunities in global markets.

Financial Highlights

• Revenue: Rs. 930 crores, up 22.5% YoY
• EBITDA: Rs. 119 crores, up 56.4% YoY
• EBITDA margin: 12.8%, up 277 basis points YoY
• Profit after tax: Rs. 56 crores, fivefold increase
• Volume sales: 8.5 million cases, up 17.2% YoY

Outlook & Guidance

ABD aims to achieve a 50% volume share in the premium and above segment and targets a 15% EBITDA margin within three years. The company plans to continue its focus on profitable volume growth and expand its international presence. Investments in the ABD Maestro luxury portfolio and strategic initiatives like backward integration are expected to support future margin improvements.

Executive Commentary

Managing Director Alok Gupta expressed confidence in ABD’s positioning within India’s premium consumption market, emphasizing the shift from volume to value with a focus on premium and above segments. Gupta highlighted the potential for significant growth in the super premium to luxury segment over the next four years.

Risks and Challenges

• Changes in excise duty, particularly in key markets like Maharashtra, could impact profitability.
• Supply chain disruptions and raw material price volatility may pose operational challenges.
• Intense competition in the premium and luxury segments requires continuous innovation and marketing efforts.
• Global economic uncertainties and currency fluctuations could affect international expansion plans.
• Regulatory changes in domestic and international markets may impact business operations.

Q&A

During the earnings call, analysts inquired about the impact of the recent excise duty hike in Maharashtra and ABD’s backward integration strategy. The company detailed its growth plans for new brands and clarified its approach to working capital and debt management. Executives emphasized their focus on maintaining strong financial health while pursuing strategic growth initiatives.

Full transcript - Ashoka Buildcon Ltd (ABDL) Q1 2026:

Conference Moderator, Entyx Stock Broking Limited: Ladies and gentlemen, good day, and welcome to the Allied Blenders and Distillers Limited Q1 FY ’twenty six Results Conference Call hosted by Entyx Stock Broking Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you for asking questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhijit Gundu.

Thank you, and over to you, sir.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thanks. It’s our absolute pleasure to host the management of Allied Benders and Distillers Limited for the quarter one FY twenty six results conference call over to mister Mukun, head of investor relations and chief risk officer for further proceeding. Thank you.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Thank you, Abhijit. Good evening, everyone, and thank you for joining our Q1 FY ’twenty six results conference call. I hope you have received a copy of our results presentation. I would like to urge you to go through this along with the disclaimer slides. Today, we have with us from the management of EVD, Mr.

Alok Gupta, Managing Director and Mr. Anil Sumani, Chief Financial Officer. Now, would like to hand over the call to our MD, Mr. Alok Gupta, who will give you the summary of the company’s quarterly performance before we open up for Q and A. Over to you, Alok.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you, Mukund. Good afternoon, ladies and gentlemen. Thank you for all joining us today for the Q1 FY ’twenty six earnings call of Alight Blenders and Disturb Limited. This quarter marks approximately one year since our public listing, and I’m pleased to share that ABD has entered FY ’twenty six with strong momentum. We delivered our fourth consecutive quarter of profitable growth, validating our strategy of prioritizing profitable volume growth, portfolio premiumization, cost focus, and agile investment in backward integration to enhance margins.

Our consolidated income from operations reached Rs. $9.30 crores in Q1 FY twenty six, representing a 22.5% increase over the same period last year. EBITDA grew at 56.4% year on year to R119 crore, with EBITDA margin expanding to 12.8%, an improvement of two seventy seven basis points on a year on year basis as compared to 10% in Q1 FY ’twenty five. Profit after tax for the quarter surged five times to Rs. 56 crores as compared to Rs.

11 crores in Q1 FY ’twenty five. In the quarter, we delivered 8,500,000 cases, up by 17.2% on a year on year basis, accompanied by a 6.2% increase in realization per case, driven by favorable product mix and price optimization. In the mass premium category, the overall volume growth was stable, with sales volume maintained at 4,600,000 cases in Q1 FY twenty six as compared to Q1 FY twenty five, mainly due to controlled sale on account of continued adoption of state profit governance metrics. However, the P and A portfolio volume growth continues to outperform the industry, reflecting consistent progress in our premiumization agenda. The P and A category witnessed a strong growth of 46.9% across multiple markets.

This growth resulted in increasing our overall P and A sales to 46.2% in volume terms and 55.8% of the sales volume value in Q1 FY twenty six as compared to 36.946.1% respectively in Q1 FY twenty five. Overall, the growth was not only witnessed in opening up of markets such as AP and Delhi, but also certain well established states of North India. Now coming to our overall EBITDA performance. The year on year performance was driven by continued strategic focus on maintaining a profitable brand mix across key states, continuous cost benefit on back of rate reset, packaging efficiency, stable commodity prices, particularly on E and A, resulting in improved gross margin by four forty eight basis points to 43.2% in Q1 FY ’twenty six as compared to 38.7% in Q1 FY ’twenty five. On the OpEx front, the employee cost had to be 50 crores in Q1 FY twenty six, which is 5.3% of our income from operation as compared to 46 crores in Q1 FY twenty five, which was 6.1% income from our operation, which is mainly on account of setting up of AVD Maestro in Q1 FY twenty six and our new dispensary in Maharashtra, which was acquired in third quarter of last year.

The other OpEx cost of this INR238 crores in Q1 FY25 is higher by 37.2% as compared to INR173 crores in Q1 FY25, mainly on account of higher promotion, sales and distribution of established brands, and new brands in the super premium to luxury portfolio, and certain increases in the state level. Overall, on a net basis, the EBITDA margin improved to 12.8 in Q1 FY25 as compared to 10% in Q1 FY25. Now let me discuss about the performance of our key brands. Iconic White, the fastest growing millennial spinach brand globally for second year in a row, continued to expand its reach across Indian market, and has now earned seven international markets. In just thirty months since launch, it has joined the ranks of the top 20 global whiskey brands, resonating strongly with the younger consumer and supported by our extensive retail distribution.

During the quarter, the brand witnessed growth across all states in India, and we expect the strong growth momentum to continue. Our flagship brand, Officer’s Choice, retained its number one position in the Indian mass premium category and continues to be India’s number one exported spirit brand. It remains a critical driver of our profitability and cash flows, generating 40% plus gross margins and benefiting from scale, brand strength, and efficient train speeds. We remain sharply focused on sustaining high margin performance through continued operational discipline. For our regional power brands, Officers’ Choice Blue, we are focusing on key markets to strengthen its presence while launching fresh and engaging campaigns to connect better with the consumer.

For the fourth billionaire brand, Sterling User V7, we are currently focusing on driving new consumer trials and deepening engagement through sharp strategic campaigns. We recently did a campaign in Maharashtra, and based on the encouraging response, we are expanding this initiative to five other big states. This quarter also had significant progress in expanding our premium offering. We launched Golden Mist, a new prestige brandy, in Karnataka in the month of April 25, and more recently, in July 25 in Dalangala. The brand is crafted using French oak calf aging and designed to cater the evolving premium consumption preferences.

Meanwhile, ABD Maestro, a super premium and luxury brand subsidiary, is scaling rapidly with expanding presence in key Indian cities and select international markets. Brands such as Zoya Gin, arthouse blended Mott Scotch Whisky, and Woodburn Whisky are gaining traction among aspiration driven consumers and are well positioned to capture high margin growth opportunities. We also expanded into the super premium and luxury vodka segment with launch of Russian Standard Vodka through a partnership with Rausch Corporation. This global brand is now available in key markets of Maharashtra, Goa and West Bengal. On the international front, ABD global footprint has expanded from 14 countries to 27 countries, nearly a 2x expansion, complementing our strategy to build a strong consumer franchise across geographies.

In addition to our presence in Middle East and Africa, we have secured approvals for export to Canada, South America, New Zealand, and to European Union region.

Management Representative, Allied Blenders and Distillers Limited: Moving to our CapEx program. Our $5.45 crore CapEx program is progressing well, and we are on track. The PET manufacturing facility in Telangana is on track for commissioning in Q2 FY ’twenty six. We expect the commercial operation to start from September 25. The margin accretive benefits would start flowing in line with the expectation.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: The single malt distillery is progressing well towards a Q4 FY ’twenty six launch in commercial operations. We will witness margin accretive benefits to start flowing from April 26 onwards. The E and A Disclion Arangabad acquired in December 26 commenced operation in February 2025 and is currently operating at 100% capacity. Regulatory approvals for capacity expansion are under process. As already stated, these backward integration initiatives are margin accretive and are expected to support approximately 300 basis points of EBITDA margin improvement from Q4 FY ’twenty seven onwards.

At the working capital front, strong focus on collection and inventory management has resulted in reduction in overall net working capital. We incurred CapEx payout in line with the planned CapEx phasing. With strong profit performance, net working capital optimization, and planned CapEx related payout, we generated free cash flow, which helped marginal reduction in our net debt to Rs. $7.54 crores as on thirtieth June twenty five, as compared to Rs. $7.56 crores as on thirty first March twenty twenty five.

This led to a marginal improvement in net debt to equity to 4.7 in June 25 as compared to 0.49x in March 25, and net debt to EBITDA from 1.5 in June 25 as compared to 1.7 in March 25. We continue to maintain tight control over working capital with strong focus on optimizing receivables. Additionally, industry wide receivables from Telangana state is anticipated to normalize gradually, further supporting working capital stability. The external environment continues to support our strategic direction. Consumer sentiment remains upbeat, with the spinous net consumption expected to fuel premium category growth.

The new tax regime has enhanced disposable income, further encouraging trading up behavior. Input costs, including grain, E and A and glass, remain soft and are expected to stay stable. Most states have finalized regulatory updates, resulting in relatively stable policy backdrop. The anticipated UK FDA is expected to improve margins, particularly beneficial for ABD as one of the largest importers of bulk scotch and will enhance accessibility of our super premium and luxury offerings. As we look ahead in FY ’26, ABD will remain focused on driving net sales value growth, strengthening operational excellence, advancing portfolio diversification, optimizing working capital, and ensuring on time execution of our projects.

We are confident that ABB is well positioned to participate meaningfully in India’s evolving premium consumption story and deliver sustainable value creation. Thank you once again for your continued interest and support. We now open the floor for questions.

Conference Moderator, Entyx Stock Broking Limited: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question The first question is from the line of Avnish Roy from Nuwama. Please go ahead.

Avnish Roy, Analyst, Nuwama: Yeah. Thanks, and congrats on very good numbers. My first question is on Golden Mist. You have entered the prestige category. So wanted to understand which markets you’ll be focusing, which are the key competitors here.

And if you could also comment on Maharashtra, I did hear your media interview. But in Maharashtra, post tax hike, have most most of the players passed it to the end customer? Or in in many cases, the companies are absorbing the tax hike, which could impact the margins?

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: That is first question.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you, Avnish. Golden Mist is a brandy in the prestige segment. The two key competitor in this segment are Napoleon Brandy and Mansion House. As we know that more than 95% of brandy sale comes from four southern states. We are currently available in Karnataka and in Telangana and are looking forward to launching this brand also in the state of Andhra Pradesh and other smaller territories like Pondicherry and Orissa, where we see sale of prestige brandy.

That should all happen within this within this financial year. As regards Maharashtra, I think most of the marketeers have passed on the tax incident to the customer, some reduction in the margin, and by and large, all the key competitors, the key players have tried to retain and protect their margins and minimize margin losses wherever they could. Like I said in several media interviews, I think for us to be able to give a view on the overall volume and margin impact, I think the only way to do is by having a greater clarity on the MML policy, which is yet to be announced by the government.

Avnish Roy, Analyst, Nuwama: Right. Second question is post IPO last few quarters, we have seen very good recovery in your margin profile in the P and A savings. So if you could talk about feet on street, what is the change in the last one year? And similarly, in terms of point of sale and on trade premises, your visibility, what has gone in terms of effort, what has gone in terms of the investment? And next two years, as you further scale up in terms of all these niche investments in terms of the brands and more launches, where do you see the brand spend point of sale and feet on street also?

Management Representative, Allied Blenders and Distillers Limited: Sure.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: We have roughly 500 people free on street. That’s the total workforce involved in our sales operation. We cover more than 90% of the outlets, which are permitted to sell alcoholic beverages. Fundamentally, post IPO, three changes have happened. Change number one that happened immediately prior to IPO, but got implemented in the IPO year, is that we moved from volume target to profitable volumes to a margin governance metrics, and we redefined the brand and the SKU in each state where we wanted to grow to make sure that the capital is allocated behind profitable brand SKUs.

The second change that we made was that we realigned the sales promotion incentive for our sales team from volume to value with focus on P and A. And the third change that has happened starting this financial year is that we have launched a new sales incentive initiative called Jeep, which covers pretty much 90% of the workforce. We have put it on an app where each TSC can actually see the performance that he or she may be recording during the course of the month and essentially create greater visibility and greater pull and push towards the towards their target. We’ve also, instead of annual targets, we move to quarterly payouts. So essentially, these three things have happened.

Focus has gone from volume to value within that focus on P and A, and now on back of the new program that we put in place, with better incentive, faster incentive, we are hopeful that we’ll continue to drive the growth that we’re seeing in our business. As regards on premise, I’ll broadly divide on premise into two types. One is key accounts and premium on premise. The coverage of key accounts and premium on premise will be done by ABD Maestro. Just as an example, now we have we have we have got listing with three of the largest national hotel chains where the luxury products should get placed in their bars and their their their in the in the mini the mini refrigerator in the rooms.

The traditional on premise will continue to be covered by the ABDC. I hope that answers your question.

Avnish Roy, Analyst, Nuwama: Yes. Quite useful. Last question, India is seen as a largely as a whiskey market. Now your two new developments, one is Golden Mist is a is a brandy offering, and similarly, Russian Standard Vodka, again, Vodka. Those are smaller opportunity, and both have very strong entrance players.

Brandy, obviously, Select Nagar is a big player, and Vodka Radico is a big player. So wanted to understand why these smaller opportunity. And within these smaller opportunities, is are you targeting essentially, again, a bit more of the premium end where you’ll be able to really expand the market? And long term, where how do you see your own whiskey contribution to sales? What is the plan in terms of the diversification?

Are these more of niche opportunities? Or do you think over five years, the whiskey contribution will be lesser in terms of diversification?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Well, at a macro level, contribution from whiskey over the last thirty years has remained about 65%. So I think we continue to love and enjoy whiskey as a flavor, and we do not expect significant changes in the in the flavor mix basket. Whiskey will continue to be north of 60%. Other brown spirits, brandy and rum will be about 5% is is white. So I think pretty much that’s a stable state over the last thirty, forty years.

If you were to slice the industry, of the 410,000,000 ElcoWeb cases last year, roughly one hundred and sixty million cases were at the prestige price point, which is a price point of, let’s say, between 700 rupees and a thousand rupees. Of this 160,000,000, roughly 40,000,000 is non whiskey, which is brandy and vodka. Golden Mist operates at a prestige price point, which is roughly 16 to 18,000,000 cases, growing high double digit, excellent margins, and by and large, it has got a sales concentration in the Southern region. So, Golden Mist is a brand that will operate in a high margin, high growth, prestige brandy market. In the Southern region, we also have a reasonably strong distribution.

So it’s not as large as whiskey, but in 16,000,000 cases, a double digit market share gives us an opportunity to create yet another millionaire brand. Similarly, when we were to look at Prestige Vodka, which is another $1,516,000,000 fourteen, fifteen million cases, Again, a reasonable double digit market share gives us an opportunity to build a million another million brand. So I think these are smaller as compared to whiskey, but each of these opportunities gives us the ability to create another millionaire brand. As regards Russian standard, Russian standard competes with super premium and luxury vodka across the world. They they sell this brand in almost 60 countries, and they compete with the global leading super premium and luxury vodka.

Therefore, this brand helps us on the luxury side provide consumer another exciting option, whether it’s in the form of a form of a sipping or or cocktail or any any other mode of consumption. So the Russian standard does not compete with Magic Woman. It competes more with the like of tea to absolute and.

Avnish Roy, Analyst, Nuwama: One quick follow-up, last question. In both these two subsegments, you mentioned double digit market share. That will be a very good achievement, but obviously not easy. What will lead to this? Because this is obviously largely a media dark industry, and obviously current entrenched players will not let it go easy.

So what will lead to this double digit share? And what is the confidence level in this?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So if you were to look at if you were to look at two trends in the alco web industry, first trend is premiumization about if you were to go a little bit on the street, premiumization was more visible in whiskey as a flavor. But if you look at last two or three years trend, premiumization is happening across all flavors. Therefore, it’s happening in rum, it’s happening in brandy, it’s happening in, of course, all white. Secondly, if you look at the growth of flavored variants within even rum and brandy, that indicates that consumers are increasingly wanting to experiment and experience newer newer variants. So I think the way we see the opportunity is that, yes, there is an established player there, but the consumer, especially the younger consumers, would be looking at experiencing newer experiences, and therefore the way we are positioning, for example, Golden Mist, it’s more to talk to the slightly younger consumer who have adopted brandy as their preferred choice, but it talks to them in a language that they would relate with.

So yes, it’s an upper task, but we are quite committed to make progress here. As regards to confidence level, we would not have launched this brand if the confidence level is our key consumer insight and our go to market strategy. We didn’t believe we had a good chance of success.

Avnish Roy, Analyst, Nuwama: The

Conference Moderator, Entyx Stock Broking Limited: next question is from the line of Aditya Sohman from CLSA.

Aditya Sohman, Analyst, CLSA: Yes. Hi. Good evening. Two questions from me. Firstly, thanks for your sort of detailed presentation, which really is fairly transparent and gives out a lot of data.

But I wanted to just ask on you’ve laid out the pricing structure for P and A and mass premium and other brand and other price points. But I just want to understand how the margin structure is also very as we move from sort of mass premium to prestige. If you can answer it on sort of a price per bottle or or in terms of percentage margins, that’ll be super useful.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Sure, Harithya. So if you were to look at some of our listed peers, you would see that it is I mean, if you look at listed peers where the P and A share of sale is between 7090%, the gross margins are roughly about 42 to 44%. Right? So our mass premium segment, which is Officer’s Choice, operates at a gross margin of north of 40%, so it makes the same margin as a percentage that any other P and A whiskey does. When we look at P and A, our prestige segment in whiskeys and in brandy as we speak, we are currently just a shade below 40, and a quick response to that is that some of the brands are new.

As you know, function of the margin here is in terms of market water utilization, some bit of LPB rationalization. So over the next few quarters, we are of the view that we should be able to cross the 50% hurdle rate on the the on the P and A brand. As regards premium and super premium is concerned, that portfolio runs at gross margin close to about 55%.

Aditya Sohman, Analyst, CLSA: Thank you. That’s very clear. And just in terms of the opportunity on the super premium and, let’s say, super premium and luxury, could you give us some sense of where you see this entire space being in terms of the number of cases for ABD in particular over, let’s say, five year period or what your aspiration would be?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So the segment the super premium to luxury segment, a price point of 2,000 and above is roughly 3% of the 410,000,000 case market. So say about 12,000,000 cases. Right? It’s growing at the highest rate in the in the Alco West space, high double digit. On back of the India, UK, FDA, some reduction in the BIO and the VII prices, and some bit of margin improvement in the VII scotch prices, our view is that this segment could more than double in the next four years.

Therefore, from a 12,000,000 case, the segment could be sitting north of 20,000,000 cases. For us, this is a year of getting our portfolio ready, building capability in terms of distribution on key on premise and understanding, you know, social media space and mixology and cocktails, and, you know, we’ve built this whole team under ABD Maestro. I think the way we are looking at is that of this 20,000,000 cases, if we can get a high single digit market share over the next two or three years, we’ll be in a good space. Right? However, I think by quarter three of this financial year, you’ll have sort of a better sense on trend and timelines because we are now just about getting into distribution expansion.

Aditya Sohman, Analyst, CLSA: Understand. That’s very clear. Thank you so much.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you, Aditya.

Conference Moderator, Entyx Stock Broking Limited: Thank you. Our next question is from the line of Kunal Shah from Jefferies. Please go ahead.

Kunal Shah, Analyst, Jefferies: Hi, thank you for the opportunity. My first question is on your volumes and the benefit that they have received from Andhra Pradesh and Delhi, which you mentioned in the opening remarks, if you can quantify it in some way, probably both on P and A and overall.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Let me have somebody work on this number. Is there another question that you have? Otherwise, allow me maybe a minute to come back to you on this.

Kunal Shah, Analyst, Jefferies: Sir, the next question is, what’s the total, let’s say, base or OpEx that ABD Maestro will incur, let’s say, on a full year basis? And let’s say, three years out, what are your revenue aspirations for this business, if you can give some directional insight on both?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Yeah. So I think here is an interesting data point. For every 1% volume contribution from the ABD Maestro portfolio, the value contribution is really 9%. So that’s the impact it has in terms of the the value growth. Right?

This year, it’s all about getting the portfolio right and building the go to market in terms of distribution and, you know, special services that or special skills that it requires in terms of cocktail and mixology. We have five brands ready now, and we are looking at adding two or three more brands to this portfolio within this year. So that we believe will will will give us the portfolio width that we’ve been wanting. It’s a combination of whiskeys, both scotch whisky, non scotch whisky, Indian whisky, gin, vodka, and one other major white that we’re looking at. And like I was responding to, I think, Aditya earlier that our outlook is that how do we build a high single digit to, you know, a double digit I would say high single digit, double digit market share over the next couple of years.

So the segment is currently 12,000,000 cases and growing north of 20 year on year. We expect this segment to get bigger and bigger. So like I said, I think by H2, we will be in a better position to provide some indication on where we stand, But so far, the distribution expansion is on track.

Kunal Shah, Analyst, Jefferies: Understood. And any any comment on the cost structure? I mean, that’s an operating cost that this entity would have on a quarterly basis or yearly basis?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So the the brands that are part of the ABDM, which are luxury brands, we are, for the next two years, following a very simple thumb rule that they need to be whatever money they make at a contribution level, we will reinvest in the brand, and therefore, the only expenses that will come is towards running the organization. And year three is when the brand or the business will become EBITDA positive. So first two years going

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: to be the years of investment.

Kunal Shah, Analyst, Jefferies: Understood. Understood. The second question is on sterling reserve. So I remember last call you had mentioned that the brand had seen declines in FY ’twenty five. And I heard your opening remark on some initiatives you’re taking, but can you give more details and by when do you see this brand turning around?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Well, I think on FRB seven, we have put a very clear path, stabilize and grow. I think by end of by within by ’1, which we’re already in quarter two, we should see the brand stabilizing. And towards the festive season, we are hopeful with the marketing program we put behind this brand, we should start seeing the green shoots. On your earlier question of let me understand. Your question is that what part of our growth will come from Delhi and AP, or individually, what will be the growth in these states?

Kunal Shah, Analyst, Jefferies: No, sir. What let’s say if I were to take these two out, what would have been the growth for the business in volume terms?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Sorry. That’s the question.

Kaushik Pawaskar, Analyst, ICICI Securities: Just

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: another thirty seconds. Sorry. We I think the data then came to me was what is the growth in the respective states.

Kunal Shah, Analyst, Jefferies: No worries. We can we can probably take it later.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Yeah. No worries.

Kunal Shah, Analyst, Jefferies: Thanks. Yeah. Yeah. And then just one last bit on Iconic White. I mean, five million cases plus last year.

Any any sense you can give on where you see it this year? I mean, do you see any initial signs of now incrementally the brand plateauing out? Or, I mean, any any anything on that those lines that you can share?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: No. The brand continues to grow. It is on a very strong wicket. We are seeing quarter on quarter growth. And I will just request what’s the q one number for ICONIC?

So just to answer your first question that if you were to take Delhi and Andhra out if you were to take Delhi and Andhra out versus the 17% volume growth, our growth would have been about 13%. So that’s the contribution of Delhi and Andhra in the overall growth. And Q1, the brand has done roughly 2,300,000 cases. As you would recall, last year we had done 5.7. So in q one, the brand has done roughly 50% of what we sold in full year.

That’ll give you some indication of where the brand could head this year.

Kunal Shah, Analyst, Jefferies: Understood. Understood. Understood. That’s very clear. And just last one, bookkeeping.

I see a very sharp reduction in excise duty in the quarter. Any specific reason? I mean, has some state changed there from Yes.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: This is a state of UP where the owners of excise duty has moved from the manufacturer to the wholesaler. Therefore, essentially, this is this is reflecting in the reduction of our gross sales value. On like to like basis, if there was no change in the in the UP, you would have seen an incremental $303.50 crores of GSV. But we are happy with this change because it also means that we’ve been able to release some of our working capital from the state of UP.

Kunal Shah, Analyst, Jefferies: Understood. Understood. Thank you. That’s that’s all from my side.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you. Thank you for now.

Conference Moderator, Entyx Stock Broking Limited: Thank you. Our next question is from the line of Sanjay Manyal from DAM Capital. Please go ahead.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Hello, sir. I have few questions, specifically on ICONIC White. I believe the contribution what was so just want to understand what would be the contribution from the state of Maharashtra, and what would be the impact of this excise hike, which has happened last month?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: I will just give it to you. See, on Maharashtra, I I I I I deeply believe that only once you get the MML pricing will be really get to know where does IMFL trade. Very difficult to speculate what will happen to the industry. Right? Iconic in the state of Maharashtra was operating at a price point of quad price point of $686,180 rupees, and now it is moving to roughly 900 rupees.

So that is a change in the pricing. Relative competitors are Imperial Blue, which has also gone from $6.80 to $8.80, and McDonald’s number one, which has gone from $6.40 to 900. So from a relative MRP parity, it continues to be competitively priced versus the benchmark competition, but there is about a 25, 30% increase in the MRP. So we’re yet to see and we’re yet to see what impact it’ll have on the segment.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: And from a Maharashtra state perspective, means Iconic White is a bigger brand. So what kind of contribution you have from the Maharashtra state?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So Maharashtra contribution is less than 10%. The number that I shared earlier of about 2,300,000, less than 10% comes from Maharashtra.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Okay. Okay. And, sir, secondly, you have launched this

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: If I brand. Just one point. If I can just one point about Iconic Maharashtra specifically. Like I said, I will wait for the MML duty structure to be announced. I think the way the way I’m looking at ICONIC specifically in Maharashtra is that it has got the high price point has moved from $7.80 rupees to 1,070 rupees.

I think the way we’ll have to understand this cascade in Maharashtra, not at a price point level, but what will happen to consumer who are earlier at $7.80, who are now who are now moved to $1.00 $7.00, will they take something like an Iconic and 900 or spend 1,100 rupees? So I think consumer will be faced with these choices, and our view is that, fingers crossed, Iconic could actually benefit a little bit from this price change because as consumers from higher price segment start looking at what their alternatives are, Iconic being a newer and a

Aditya Sohman, Analyst, CLSA: fresher

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: brand could benefit, but like I said, the jury is out. So just also keep in mind that the Roystack price point is moving from $7.80 to $1.00 $7.00. Roychallenge moving from $7.80 to $1.00 $7.00. So movement from $7.80 to 900 is relatively easier versus $7.80 to $1.00 $7.00. So just keep this in back of your mind.

However, like I said that, you know, what choices consumer make, we will we will find out.

Harsh Shah, Analyst, Bandhan AMC: Sure. Sure.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Yeah. You mentioned 2,300,000 cases for the quarter. Means Yes. Can we say the saliency of means for the quarter on quarter is similar? So are we looking at anywhere between 9,000,000 to 10,000,000 cases for the year or maybe lower?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: I I wish I had a crystal ball to answer the question. But but, you know, I’ve said this earlier. Say it again. This brand has the ability to be a market leader. So, I mean, if you can see the performance of the brand even in this financial year in context of where I think this brand could be, that may just answer the question.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Sure. So secondly, on the overdue, what is the expectation that this overdue is from Telangana by when we can we can expect that the full payment, you know, we we can get?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: But it is status quo in Telangana. So regular payments are being released, overdue. Very tiny portion was released in the month of April and May, but June and July, we have not seen release of any overdue payment. So I think clarity will emerge after the Panchayat election, which are slated in the month of August. So that’s when the that’s when the government will be available for reengaging on the on the Telangana overviews at industry level.

That is really what our understanding is at this point of time.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Awesome. And one last question I have about the UKFTA. What I believe that the custom reduction is very gradual over the next ten years. So you think really it will benefit given the fact that over the next ten years, this this can be offset by the excise hikes by this respect to state

Kunal Shah, Analyst, Jefferies: governments because

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: it’s really a very

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: The custom duty reduction is from 150% to 75%, and thereafter, reduction to 40% over the next ten years. So there is one big reduction now to 75%.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Immediately, you are saying?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Immediately. And then over the next ten years, 75 needs to come down to 40. So all the the the from our modeling perspective, we have taken the first 75 reduction. What happens thereafter, we still not baked into our model into our projection.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Okay. Okay. That’s all from me, sir. Thank you. Thank you very

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you, Sanjay.

Conference Moderator, Entyx Stock Broking Limited: Thank you. Our next question is from the line of Kaushik Pawaskar from ICICI Securities. Please go ahead.

Kaushik Pawaskar, Analyst, ICICI Securities: Yeah. Thanks for waiting the opportunity, and congrats for good set of numbers. Most of my questions have been answered, sir. I just have a question on one of your initial comments of 300 bps expansion in EBITDA margins from Q4 FY ’twenty seven. So you mean to say whatever benefits which you are going to derive from backward integration will start flowing in from ’4 of FY 2020, sir.

Is it alright. I understand. Because some of the facilities, are going to start from q two FY twenty twenty six. So, initially, the view was, like, from q two, some of the benefits should start flowing in and the incremental benefits, what we are expecting, should come in from your q four of FY twenty seven. So just wanted to Absolutely understand on

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: right. The full benefit will come the full benefit will accrue from q four FY twenty seven. Partial benefit from our ENA display in Menarche in in Maharashtra have already started to accrue, and the pet project will start in September 25. So that benefit will start will start accruing. And by q four, FY twenty six, our single model is still be up and running, so benefit will start accruing.

So accrual we will start seeing accrual. Sorry. We’ll start seeing EBITDA positive impact EBITDA impact starting q two f y twenty six, and it’ll scale up gradually, but the full impact will be visible to us in quarter four f y twenty seven.

Kaushik Pawaskar, Analyst, ICICI Securities: Excellent. So a follow-up question on Iconic. This quarter, we have seen 2,500,000 cases of sales volume. So is it mainly because of the fact that we are expanding into rural states or even the repeat attraction to the brand is quite strong? Any understanding on that?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So from a footprint expansion, Iconic was launched across all states of the country in the last financial year. So a footprint expansion is largely now in the international market. We have now shipped Iconic to about seven new countries, and we’ll expand the footprint going forward. But from a domestic play perspective, we had finished our entire national reward in the last financial year. So the volume that you’re seeing is is is just repeat consumer and your consumer that are coming in.

Kaushik Pawaskar, Analyst, ICICI Securities: Right. Right question. Sir, any any thought process on the Azure launches, what you have done in past, you know, six to seven months, you know, which of the brand you expect to be, I’m not saying that it will be a next iPhone, but a little closer to that, you know, where you are seeing good traction.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So I think we are excited about all new brands. However, if you were to pick brands that will that can give us scale in terms of volume and are also high margin, then I would say Woodburn is a brand we’re extremely excited about. It’s a 3,000 rupee MRP product. It’s what I call a daily affordable luxury, which is 100 rupees a day kind of a thing. So I think that’s a that’s a that’s that’s a brand we’re really excited about.

If you look at our golden Golden Mist brandy that we’ve recently launched in a large 15,000,000 segment, high margin, high growth, we’re extremely confident about that it can give us scale and the and the margin. We also have a hidden gem in our portfolio brand called Shisti, which is an Indian brand with an Indian soul. We are currently selling it in three markets of North. We are extremely happy with the early results that we have and the playbook that we have on the brand, and we’ll expand it in the course of the year. The idea of picking up these three brands is largely from the fact that they will these three brands offer a scale and high margin.

Of course, the work that is happening on Zoya with its two flavor variant, which is watermelon and espresso, has started to deliver start to deliver good results for us. So we we’re excited about I think these three brands can will give us scale and margin bump up.

Kaushik Pawaskar, Analyst, ICICI Securities: Okay. And so one final question on Maharashtra. Like, you said that it is very difficult to comment on the impact as of now on the excise duty hike, maybe from the customer point of view. But on the Horeca, are you seeing any kind of impact of saying like they are mentioned lower inventory? Or is there any down trading as you were talking about as an opportunity for you know, in institutional or data side of the business?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: If you look at the super premium premium super premium and luxury segment, the increase in MRP is marginal. It’s not even it’s single digit from three to 5%. Right? So these you know, the excise duty is such that it is increasing it has increased the excise duty on the past premium and the prestige price point, has offered MML as a category, be it more affordable MRP. But in the premium, super premium, and luxury, there’s hardly any change in MRP.

Therefore, from a Horika perspective, we do not expect that this policy will impact any which way the current consumption pattern.

Kaushik Pawaskar, Analyst, ICICI Securities: Thanks. Thanks for the. All the best,

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you very much.

Conference Moderator, Entyx Stock Broking Limited: Thank you. The next question is from the line of Harsh Shah from Bandhan AMC. Please go ahead.

Harsh Shah, Analyst, Bandhan AMC: Yeah. Hi, Alok. Thanks for taking my questions. Firstly, if we look at your volume six of Iconic this quarter, there would be a volume b growth. Right?

And I have a question here is that, you know, even in the previous question, you’ve spoken about the brands you were excited about. Right? Woodburn’s and Soya and the other brands. But, I mean, how do we think of, let’s say, brands which are already, let’s say, with the prospects in cases like OC Blue or Sterling Reserve,

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: how

Harsh Shah, Analyst, Bandhan AMC: do we think of those brands? Because even, I mean, they are also, you know, let’s say, how do we think of spending the annual brands? How do we think of getting growth back in those brands?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So, Harsh, my earlier response was in context of the question that amongst the new brands that we are launching, which are the one we are excited about. So Okay. The response was in context of the new brands, not in context of the of the portfolio. So that’s an important point I wanted to make. Right?

If you were to ask me a brand that we are excited about, we are extremely excited about Officer’s Choice. It’s a flagship brand, largest exported brand out of the country. The margin governance framework has got our gross margin north of 40%, closer to 43%. This brand requires fairly low levels of LPB and promotional support, so net retained cash is very high. And we have our guidance is single digit growth with with focus on our gross margin because this really is a cash cost.

So very, very excited. We are doing some But

Harsh Shah, Analyst, Bandhan AMC: this is this is office size or office size new?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: I mean This is Office’s Choice. Cover the entire I’ll cover our Okay. There are different reasons. For each brand, there’s a different reason to be excited about. So that’s Office’s Choice.

We are doing some very interesting work in terms of innovation on this brand, which hopefully, quarter three can talk about. So as market leaders, are thinking about how do we expand the segment, how do we bring in excitement in the segment. So we’re working on that. Officer’s Choice Blue is is to it used to sell more than a million cases in the market of Delhi. And because there was policy uncertainty in Delhi, we had taken a back we had taken a a back step in Delhi, and we our volume were down to about ten, twelve thousand cases a month, is about a 150,000 cases a year.

Now that the policy for Delhi has been has been announced for the next nine months, we are ramping up Delhi in terms of our market share. And therefore, Officer’s Choice Blue has always been a regional powerhouse, and therefore, there are two or three states. Delhi, of course, is the leading state here where we will see volume growth coming back on on Officer’s Choice Officer’s Choice Blue. The the third brand, SRV seven, we have covered, stabilize and grow, and we we are targeting towards h one able to stabilize the brand. And then from h two, we’ll start seeing some green shoots on the brand.

So that those really are our three co brands. I’ve called Golden Mist and Shisti, which is a new brand in our portfolio. One more notable mention here would be that two of our premium brands, especially Chiron, where we have 25% share in the domestic market, this brand is approved in the defense vertical. And this year, SRV 10 and Chiron, we will focus on CSD as a channel. From the export footprint, again, the growth will come up in the in the entire pieces of India and beyond, not just India.

We have grown our footprint from 17 countries to 20 17 countries in FY ’24 to 23 countries in FY ’25. We are already operating in ’27 countries, and we are looking at expanding our footprint further. So from 17 countries in FY ’24, by end of the year, we’re looking at at least a two x increase, which means at least 33 to 35 countries where we start exporting. So like I said, different brands give us different opportunities. As far as Iconic is concerned, the market share it is getting, it is getting market shares from brands like McDowell’s number one and Imperial Blue, needless to say, even OC Blue.

So we also see the two brands together as to how OC Blue and Iconic together are getting the market shares. So I hope that provides you a response to the question that you were looking for.

Harsh Shah, Analyst, Bandhan AMC: Got it. Well, no. No. It’s very helpful. Secondly, basically, I mean, when I look at your presentation, we are currently at 46 in terms of P and A volume volume share.

Right? And you’ve called out an aspiration to reach 50% P and A volumes in three years. Right? That is something which I mean, I’m let’s say, given that, you know, your the the slide on your new launches, Everything we are doing is in prestige. Right?

So, I mean, this 50% would I mean, it’s it’s something which we should be there, I think, by the end of this year. Right? And so, I mean, in terms of target, I think, wouldn’t the PNA volume contribution be much higher given what we are talking about doing in terms of ABD Maestro and, you know, currently that what we are seeing in ICONIC as well over next three years? 50, I mean, it’s very I think a low number. I mean, what what are your thoughts on that?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: No. When we had indicated that we would like to be 50%, at that point of time, we were only 37% of PNA. Right? Mhmm. Which is FY ’24.

Of course, we ended the year with about 42. We are at 46% percentage. So we continue to grow the way we are growing, and especially with the addition of Golden Mist and roll out of shifting many markets. We should be looking at closing down the gap between forty six and fifty. There is massive amount of work that we are currently doing on Office’s Choice as a brand, and we are hopeful that and this is largely in the space of innovation and and sort of engaging the consumer differently.

So we are also hopeful that we are able to stimulate growth in in in this price point or in this segment, which is, you know, high single digits. So, honestly, if we are able to get Officer’s Choice to grow high single digit, we’ll be quite happy with, you know, hitting 50% because it’s a it’s a really a big cash generator for us.

Harsh Shah, Analyst, Bandhan AMC: Got it. But in this even in terms of your margin bridge. Right? So we are currently PPM business, are at 13% EBITDA, and aspiration is 15%, right, over next three years. Will that margin bridge be linear in a way that we see expansion every year, or as you as you previously commented that this is a year of, you know, building your ABB Maestro portfolio, which would also mean that you would want to invest more in terms of brand building this year?

Right? So, I mean, will it be, like, taking one step back and then two steps ahead, or will it be a linear journey?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: I think let’s put it this way. We are currently, let’s say, at about 13% EBITDA margin. There are two big levers of margin expansion. One is FTA, which, let’s say, Q four of this financial year should come into play, that itself should add about 400 basis point margin improvement. And second is the backward integration, which we have said by q four FY twenty seven, we should realize the good 300% benefit.

Right? So it’s a stage it’s a staged so it’s so it’s not linear in many way. It is linked to very specific milestone. In addition, there are two areas of investment. One is on brands.

Both the AVD portfolio, we are looking at improving our A and B as a percentage of NSV by a 100 basis 75 to a 100 basis point this year, another 75 to a 100 basis point next year to ensure that brands like OC Blue and Sterling v seven and Iconic continue to get the A and P support. So the numbers that I’m sharing with you is after providing for that investment, and also AVD Maestro, like I said, for the first two years, is likely is not like is is likely to it will lead investments, and therefore, going from 13% to north of 15% is after providing for investments in the brand and also people, process, and tech infrastructure. We are sending we are moving from ECC to HANA, for example, this year. That’s a big transition for us in terms of the of the tech platform. I earlier spoken about that how we are putting our sales force practices, including our sales incentive program, Jeep, on our you know, as part of our automation program, our risk factors.

We are looking at investing in our S and OP digitization practice. So the numbers the the outlook that we’ve given on EBITDA is after providing for investments on our co brands, investment on ABDM, and also investment in people, tech, and processes. So you will see over the next balance seven quarters, you will see gradual progression on the EBITDA numbers.

Harsh Shah, Analyst, Bandhan AMC: Okay. Got it. Got it. And just one data point on I think one previous participant asked you about the operating, let’s say, cost structure for ABB Maestro. I mean, do you could you can you share a number there?

I mean, in terms of annual basis, f 26, f 27, what would be the kind of cost structure there in terms of OpEx?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: I think little early days. Like I said, I think on ABD Maestro, let’s talk in quarter three. We’ll have a better sense on ABD Maestro. Right now, the focus in h one is the portfolio. We are building two hubs for manufacturing.

One is in Orangawa, which is Maharashtra to service the market of West and South. The second hub is in Haryana. You know, Haryana is the largest market in North. So second hub is in in North, which is Sahar unit in Haryana, is going live this month, has gone live this month. So brand, manufacturing, the team is in place, listing is on key accounts.

We already have three large national hotel chains where we’ve got our listings. So I think the focus right now is just about getting the fundamentals in place so that we can grow from there. But I think q three onwards, we should be able to talk a lot more about numbers there. Got it. And just

Harsh Shah, Analyst, Bandhan AMC: one last question from my side. I mean, after this, excitingly, we’ll be hiking Maharashtra. What’s the consumer behavior which you are picking up? I mean, the Early. In the last one month?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Early. The retail still has stock of the old prices. Right? I think towards August, the new MRP inventory will roll out. We are as keen as you are to understand what will happen in Maharashtra, but these are early days.

Harsh Shah, Analyst, Bandhan AMC: Fair to say July had no July had very less primaries?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: July it’s not about primaries. The distributor and the retail outlets were carrying enough and more inventory. So from a consumer point of view, let’s say retailer was carrying x week of inventory and the distributor was carrying y week of inventory. Therefore, from a consumer point of view, even now, in many markets, old MRP stocks are available. We have started to see the new MRP stocks coming on the shelf.

So I think by the August, we’ll start getting the retail order in terms of what’s happening to consumer behavior. Anything that I tell you right now is will will hold no good because it’s a mixed situation, old MRP, new MRP.

Harsh Shah, Analyst, Bandhan AMC: Okay. My question is more from, I the primary, sales to distributor, right? So was that impacted in July because of the stocking up of old MRT? Everybody is impacted,

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: wants to understand what will happen in the market. Absolutely. Goes without saying. Got it. Got it.

Got it.

Harsh Shah, Analyst, Bandhan AMC: Thank you so much for that. Thank you.

Conference Moderator, Entyx Stock Broking Limited: Thank you. Our next question is from the line of Akhilesh Bhattar from Ikegai Assets.

Nikhil Kapoor, Analyst, LIC Mutual Fund: Congratulations on a good set of numbers. I just want clarification regarding your guidance for working capital this year. So you mentioned that Telangana receivables are again coming at a very slow pace. So how should we look at working capital this year? Would it be a big drag similar to what it was last year?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: No. Not at all. I think operations, the EBITDA that we generate this year should be more than sufficient to meet the entire growth capital requirement for the business. In fact, it will leave free cash on the table. So the only reason the only reason we may we may need to borrow is for our our our our projects that we’ve that we’ve already discussed.

But from an operation point of view, the business is self sufficient and will generate free cash. And if the Telangana money was to go in, we’ll see significant reduction in our net debt as well.

Kaushik Pawaskar, Analyst, ICICI Securities: Thank you. Yeah.

Conference Moderator, Entyx Stock Broking Limited: Thank you. Our next question is from the line of Nikhil Kapoor from LIC Mutual Fund. That, a reminder to all participants, please make sure you’re asking two questions per participant. Nikhil, sir, please go ahead.

Nikhil Kapoor, Analyst, LIC Mutual Fund: Hi, sir. Congratulations on a great set of numbers. Just one question. Most of my questions have been answered. Just one thing, I know too early days, but this new category of Maharashtra made liquor, which was talked about in the excise policy, would we be able to quantify if any benefits that will flow to us under this category?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Yeah. The answer is yes. We have what this category will need is capacities, and we have we have geared up and ramped up our capacities in MML. So we definitely see an upside on the volumes.

Nikhil Kapoor, Analyst, LIC Mutual Fund: Got it. But difficult to quantify it too early days.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Policy start out. So the reason is that policy of for only the duty structures announced, which is two hundred seventy days price, but until we don’t get to see contours of policy, it’s very difficult to to understand.

Nikhil Kapoor, Analyst, LIC Mutual Fund: Understood. Thanks. Thanks. That’s all from my side.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you.

Conference Moderator, Entyx Stock Broking Limited: Thank you. Our next question is from the line of Dheeraj Mistry from ICICI Securities. Please go ahead.

Management Representative, Allied Blenders and Distillers Limited: Yeah. Yeah. Hi, Alok. Hi, Mukha. Sorry.

I joined a bit late, but I would like to know what is the growth rate excluding, let’s say, EP market and Telangana, Delhi market, which was kind of a one off and that market has reopened? Sorry if you have answered that question.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Not at all. Happy to answer the question again. Our q one growth is 17%, and without Andhra and Delhi, this growth would have been about thirty, fourteen percent.

Management Representative, Allied Blenders and Distillers Limited: Got it. Got it. And, see, more from this, like, new product launches, so, yeah, definitely, we have increased our aggression in terms of product launches in luxury and premium segment. But now that the incremental many players have been coming in this segment and this space is in which way is getting more crowded in a way, what is the growth trajectory, let’s say, going ahead And how does saliency of this or, let’s say, the profitability of this segment would move in three to four years period of time, especially when we are into investment phase in this segment?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Your question is related to the super premium luxury segment?

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers Limited: Yes. Yes.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So like I said, of the 410,000,000 cases, the volume sale is about 3%, transferring to about 12,000,000 cases. It accounts for 20% of industry profit. A typical case NSV is about eight to 10 x versus port versus branded operating prestige segment. Gross margin profile about north of 55%. Our outlook is over the next two years, whatever money we make on the brands, we will reinvest in the brand.

Therefore, we do not expect these brands to contribute to our EBITDA. There’ll be some costs associated with the organization and manpower, but the brand will take care of themselves from a marketing A and B point of view. And year three, we are targeting, you know, the EBITDA for it to start contributing to EBITDA. But from a just a unit economics comparison, NSV is about eight x of the prestige segment. Margins for us are, let’s say, 40 odd percent on our ABD portfolio where margins are about north of 55%, but that too on a much higher NSV.

Therefore, if over the next three or four years, we can get to a single digit market share of fifteen, twenty million case segment, that’s about a million cases. It should make significant difference both in terms of top line and bottom line.

Management Representative, Allied Blenders and Distillers Limited: Got it. Got it. And for next three years basis, it would be more of a margin dilutive from the portfolio level point point of view or, let’s say, on an aggregate basis level?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: For the first two years.

Management Representative, Allied Blenders and Distillers Limited: For the first two years. Got it. Got it. Okay. And, sir, lastly, this backward integration, the the benefit of this, let’s say, PET bottle, which is should be finished in, let’s say, couple of month of time, what kind of saving we are expecting on an annualized basis from this project?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: The pet project alone should be annualized addition should be another 30 crores.

Management Representative, Allied Blenders and Distillers Limited: Okay. Thank you. Thank you. That’s it from my side. And once again, congratulation on good sets of number.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you very much. Thank

Conference Moderator, Entyx Stock Broking Limited: you. Our next question is from the line of Nikhil Gupta from YU Capital. Please go ahead.

Avnish Roy, Analyst, Nuwama: Yes. Hi. My first question is, I think, related to Rock Paper. I think it’s quite some time we have approved the investment. So what’s happening on that front?

Can you please elaborate?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you for this question. It’s just been it’s just been getting the quarter one on track and growing, nothing else. Just a matter of finding time, and, hopefully, we’ll announce soon.

Avnish Roy, Analyst, Nuwama: Okay. So the investment has been already made, or it’s still in the signing phase?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: No. We’ve not we’ve not made any investment in the business so far.

Avnish Roy, Analyst, Nuwama: Yeah. So that’s what I was trying to ask. I mean, I think we approved in the quarter four.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: We like I said, I think just we just got busy with our quarter one quarter one operations, and therefore, it just, you know, we we felt that let’s just, you know, put all our energy behind getting the quarter one off on a good start. And depending closure and the investment thereof, we’ll focus in quarter two now.

Avnish Roy, Analyst, Nuwama: Okay. And and how are we what’s our target? Like, how many cities we want to expand that, and what’s what’s what’s the dream? Like, what’s the the target setting before that?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So this brand operates in sort of a premium, super premium rum segment. The size of segment is roughly 3,000,000 cases. It has one notable competitor. So the idea would be over the next couple of years to target a double digit or a higher market share. The relevant market terms of numbers would be about 10 to 12.

The brand is already registered and operating in seven of those 12 markets. The balance five, we will need to open up over the next few quarters, and we have distribution in place. So once, you know, we get this brand up and running, we should see quick results coming off.

Avnish Roy, Analyst, Nuwama: Understood. Thank you very much.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Thank you.

Conference Moderator, Entyx Stock Broking Limited: Thank you. Our next question is from the line of Nathik from AV Alpha Fund. Please go ahead.

Management Representative, Allied Blenders and Distillers Limited: Sir, my first question is when I actually look at your numbers and I compare Q o Q while our revenues are sort of similar, but our expenses have increased. So just wanted to if you could quantify where we have spent the extra amount, that would be really helpful.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: So we’ve had a slightly higher expense on people, creation of the ABDM team, also our Menasha Distillery, also announcing increments for FY ’26. So there has been an increase in our people cost. The second big element is the higher investment in the in the A and P behind the brands. There are two big ticket items where bulk of the investments are gone.

Management Representative, Allied Blenders and Distillers Limited: Got it, sir. And sir, just wanted one clarification. You mentioned that due to the U. K. FDA, the import duty coming down, the benefits would be closer to 400 basis points.

Is that correct?

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: 200 basis points.

Kunal Shah, Analyst, Jefferies: 200,

Harsh Shah, Analyst, Bandhan AMC: right. Got it, sir.

Kunal Shah, Analyst, Jefferies: That’s it from me. Thank you.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Alright. Thank you.

Conference Moderator, Entyx Stock Broking Limited: Thank you. Ladies and gentlemen, as there are no further questions, I now hand the conference over to the management for closing comments. Please go ahead. Thank you, and over to you.

Alok Gupta, Managing Director, Allied Blenders and Distillers Limited: Well, thank you once again for taking the time out. I hope, you know, we’ve been able to provide you data queries and clarifications to the extent possible possible. However, if there’s anything that remain unanswered or you need a follow-up, please reach out to Mokun. We’ll be happy to, you know, provide the data. Thank you once again for taking the time out.

Conference Moderator, Entyx Stock Broking Limited: Thank you. On behalf of Entek Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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