Earnings call transcript: Allied Blenders sees Q2 growth, expands globally

Allied Blenders and Distillers (ABD) reported robust growth in its Q2 FY26 earnings call, showcasing a 14.4% year-over-year increase in consolidated income from operations, reaching ₹995 crores. The company’s strategic focus on international expansion and product innovation has bolstered its market position, despite challenges in the domestic market.

Key Takeaways

• Consolidated income from operations rose 14.4% YoY to ₹995 crores.
• EBITDA increased by 23.6% YoY, with a margin of 13.1%.
• International presence expanded to 30 countries, with a target of 1 million export cases by FY28.
• Significant growth in Officer’s Choice and Iconic White brands.
• New PET bottle manufacturing facility commissioned in Telangana.

Company Performance

Allied Blenders and Distillers demonstrated solid performance in Q2 FY26, driven by strong sales and strategic expansions. The company sold 9 million cases, marking an 8.4% increase from the previous year, and saw a 3.8% rise in case realization. This growth is attributed to the company’s focus on premiumization and targeting younger consumers entering the legal drinking age.

Financial Highlights

• Revenue: ₹995 crores, up 14.4% YoY
• EBITDA: ₹130 crores, up 23.6% YoY
• EBITDA Margin: 13.1%
• Profit After Tax (PAT): ₹63 crores, up 32.3% YoY
• Case Sales: 9 million, up 8.4% YoY

Outlook & Guidance

The company aims to further its international expansion, targeting a 12-15% contribution to total revenue from overseas markets. ABD plans to launch three new brands in the second half of the fiscal year and expects to add significant export volumes from Africa in the coming years. The introduction of a unique single malt by 2029 is also part of its long-term strategy.

Executive Commentary

Alok Gupta, Managing Director, highlighted the company’s growth trajectory, stating, "Our consolidated income from the operation was ₹995 crores in Q2 FY26, representing a 14.4% increase in Q2 FY25." He also emphasized the potential of the African market, adding, "We expect to add another million cases from Africa over the next two to three years."

Risks and Challenges

• Supply chain disruptions could impact production and distribution.
• Market saturation in the domestic segment might limit growth.
• Fluctuations in raw material prices could affect profit margins.
• Regulatory changes in international markets pose a risk to expansion plans.
• The competitive landscape in the premium segment remains intense.

Q&A

During the earnings call, analysts inquired about the Telangana market, where the company received over ₹100 crores in overdue payments. Concerns were also raised about the total outstanding dues, which stand at approximately ₹700 crores. The management addressed these issues by emphasizing their focus on capability building and exploring new price and flavor variants for key brands.

Overall, Allied Blenders and Distillers’ Q2 FY26 performance reflects a strong growth trajectory, supported by strategic initiatives in product innovation and global expansion. The company’s focus on premiumization and targeting younger consumers positions it well for future growth, despite potential challenges in the market.

Full transcript - Ashoka Buildcon Ltd (ABDL) Q2 2026:

Conference Operator, Antech Stockbroking Limited: Ladies and gentlemen, good day and welcome to the Allied Blenders and Distillers Q2 H1 FY26 Post-Earnings Conference Call hosted by Antech Stockbroking Limited. As a reminder, all participant lines will be in the listen-only mode, and there will 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 then 0 on your touchstone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Abhijit Kundu. Thank you, and over to you, sir.

Abhijit Kundu, Host, Antech Stockbroking Limited: Hi, it’s our absolute pleasure to host the management of Allied Blenders and Distillers Limited for the second quarter of FY26. Over to Mr. Mukund, Head of Investor Relations and Chief Risk Officer, for further proceedings. Thank you.

Mukund, Head of Investor Relations and Chief Risk Officer, Allied Blenders and Distillers: Thank you, Abhijit. Good evening, everyone, and thank you for joining our Q2 FY26 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 ABD, Mr. Shekhar Rama Musri, Executive Deputy Chairman, Mr. Alok Gupta, Managing Director, and Mr. Jayanth Manmurkar, Chief Financial Officer. Now, I 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&A. Over to you, Alok.

Alok Gupta, Managing Director, Allied Blenders and Distillers: Thank you, Mukund. Good evening, ladies and gentlemen. Thank you all for joining us today for the Q2 NH1 FY26 earnings call of Allied Blenders and Distillers Limited. I’m pleased to share that this quarter marks our fifth consecutive quarter of strong performance post-listing, with consistent improvement in premiumization of our portfolio and margins as well. The sustained success underscores the effectiveness of our approach, which centers around driving profitable growth, enhancing our premium product offering, and investing in backward integration to optimize margin and required supply chain security. Our consolidated income from the operation was ₹995 crores in Q2 FY26, representing a 14.4% increase in Q2 FY25. EBITDA was ₹130 crores, a 23.6% growth compared to the same period last year, and with an improved margin of 13.1%. On profitability, our PAC grew by 32.3% to ₹63 crores.

In this quarter, we sold 9 million cases, marking an 8.4% year-on-year increase, coupled with a 3.8% rise in realization per case, driven by an improved product mix and price increases. Our mass premium category grew at 4.3% in Q1 versus Q1 FY26, along with gross margin improvement due to profitable state-brand SKU mix, but witnessed degrowth of 5% versus Q2 FY25, which was primarily due to regulatory intervention at an industry level in one of the southern states that will have a short-term pipeline impact. We expect the industry to come back to normalcy within this financial year, and especially within Q3 FY26 itself. At the industry level, the mass premium whiskey segment witnessed degrowth during H1 FY26. However, our flagship brand, Officer’s Choice, gained incremental market share during the same period, indicating continued growth momentum from Q1 FY26.

Officer’s Choice continued to lead the mass premium segment in India, holding its position as a top-selling brand. It also remains the country’s top exported brand, delivering gross margins of over 40%. The brand plays a crucial role in driving both profitability and cash flow for the business. Our Prestige and Above category maintained the growth momentum with 8.3% versus Q1 FY26 and 28.8% on buy-on-buy volume basis. Which resulted in improvement in salience of P&A segment to 47.1% as compared to 39.7% in Q2 FY25. The strong performance of P&A portfolio highlights the continued success of our premiumization strategy and value-driven approach. Iconic White has been a standout performer, maintaining its strong market momentum for the second consecutive year. It has been recognized as the fastest-growing spirits brand globally.

The brand has successfully expanded its footprint, now available in eight international markets, in addition to the growing presence across India. Iconic White continued to double its volume organically, with 2X growth versus Q2 FY25 and winning market shares from legacy brands, and also becoming the brand of choice for the new LDA consumer, which means consumers of legal drinking age. Coming to our next millennial brand, Sterling Reserve B7. We recently launched a refreshed blend with enhanced smoothness and taste and rolled out a nationwide campaign titled, "So Smooth Must Be Magic." We have also done a unique digital collaboration with cricket star Shereh Saier for enhanced consumer engagement. This initiative has helped. In gaining consumer traction in some of our critical markets. This momentum highlights the growing popularity of our brand and reflects increasing consumer interest across various markets.

It reinforces ABD’s commitment to innovation, product excellence, and deepening consumer engagement, all of which are the key to sustaining our growth and expanding our market share. The campaign was effective in reversing degrowth trends in our priority markets, and we plan to extend this campaign now nationally. Now, coming to our super premium to luxury category. During the quarter, ABDM brands in the portfolio have continued expanding its presence in addressable markets. During the quarter, it has successfully debuted in the two to three markets of Bangalore and Delhi. The brand has garnered global recognition, securing prestigious awards from the Concours Mondial in Brussels and Spirits Conclave and Achievers Award, both in the year 2025. Coming to our international markets, ABD’s strategic expansion across international markets has been impressive, with the company increasing its reach from 14 to 30 countries within just 18 months.

In the current year itself, it has expanded its presence to seven more countries across the continent. This rapid growth highlights the success of the asset-light, high-margin export model, which delivers profitability higher than the domestic market and operates with much less working capital per case. By Q4 FY26, ABD targets to increase its international footprint to reach 35 countries. The company remains committed to maintaining its market share in the GCC region while continuing to expand its distribution into Africa, with the goal to reach 1 million cases by FY28. ABD is also broadening its presence in Latin America, Europe, North America, and Southeast Asia. Iconic White, the brand’s latest millennial success, is now available in eight countries, while luxury portfolio brands such as Art House and Zoya Gin have also debuted in the UAE market. Let me give you an update on our CapEx program.

In September 2025, we also successfully commissioned our EBITDA-incremental PET bottle manufacturing facility in Rangapur, Telangana. This facility has a capital investment of approximately ₹115 crores. The facility is set to produce over 600 million PET bottles annually. This investment is a key part of our strategy to strengthen backward integration by manufacturing PET bottles in-house, which has significantly enhanced supply chain efficiency, reduced packaging costs, and improved overall operational control, also adding to our gross margin. Additionally, it supports our margin expansion goal through cost optimization while advancing sustainability efforts with energy-efficient and recyclable packaging solutions. Our other CapEx projects, namely the single-malt distillery at Rangapur, Telangana, and E&A distillation capacity expansion in Aurangabad, Maharashtra, are on track and are expected to be operational in Q4 FY26 and Q4 FY27, respectively. Moving on to our balance sheet and cash flow update.

Our H1 FY26 financial performance reflects a strong operational cash flow generation, and all leverage ratios remain well within our stated guidelines, even during the peak CapEx phase. Operating cash flows of ₹147 crores were generated in H1 FY26 due to high profitability and working capital discipline. Our net debt position, as of 30 September 2025, was ₹893 crores versus ₹766 crores on 31 March 2025. The increase in net debt of ₹127 crores is primarily on account of our CapEx, which I have already explained. It should also be noted that the average cost of borrowing has reduced by 140 basis points to 8.2% in H1 FY26 versus 9.6% in H1 FY25, at the backdrop of two credit rating upgrades, first one in October ’25 and within nine months in July ’26, driven by strong financial performance.

Also, in the month of October 2025, the processing of long overdue payments has been initiated by the Telangana market, and ABD, along with other industry players, have received certain payments. Overall, industry views are optimistic about progressive clearance of remaining dues. Moving on to the future outlook. On the industry front, the Indian alcohol industry is witnessing strong growth driven by premiumization, with the P&A segment leading the way through portfolio expansion, innovation, and route-to-market reforms. Premium and luxury segments, including whiskeys and craft gin, are outperforming as consumers increasingly seek high-quality products. Key growth drivers include regulatory reforms in the states like Andhra Pradesh, which have facilitated volume recovery. The industry is benefiting from a stable raw material environment, supporting margin stability, while operational efficiency and brand investment continue to enhance profitability.

However, state-level regulatory changes and the rise in local brands in certain regions represent a potential challenge in a couple of states. As we enter the second half of the year, we anticipate a positive outlook driven by the festive season in Q3 FY26. We continue to optimize working capital and ensure timely execution of key strategic projects that are crucial for our long-term growth. Furthermore, we are committed to advancing sustainability initiatives and investing in R&D. With these efforts, ABD is set to play a key role in India’s growing premium consumption market and continue to deliver long-term value. Our focus will continue to be on margin. By focusing on unit economics, volume growth, we continue to. Keep our portfolio customer-centric and deploy capital with discipline. Thank you once again for your continued interest and support. We now open the floor for questions. Thank you very much.

We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone 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 a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avneesh Roy from Novama. Please go ahead. Yeah, thanks, and congrats on good numbers. I have three questions. My first question is on the CapEx, which you have just put up on the. PET. The questions are, what kind of advantage or. Gross margins you will enjoy versus a third-party PET supplier? Because that PET supplier can have a lot of economies of scale versus much lower scale for you. So if you could clarify on that way.

And is it a common practice for alcohol beverage players to put this? Related question is, in terms of glass. Bottles, we understand that there is a lot of extra capacity, low utilization for the industry. So in the glass. Raw material, how do you see the coming quarters? Is that quite favorable for you and the industry? Thank you very much for your question. The PET. Manufacturing largely works on. Producing and shipping within. A short distance, as the logistic cost can be painful. So the arbitrage. Your first question was on what is the arbitrage. This is an investment of ₹115 crores. As we have outlined earlier. This investment will add roughly ₹30 crore plus to our gross margins, translating to about 75 basis points, let’s say, on current year volume. So that’s the impact on our gross margin and absolute.

EBITDA in terms of the contribution that this unit will make. Secondly, on economies of scale, we do not have any disadvantage on economies of scale because PET manufacturing is not centralized, unlike the glass bottle manufacturing. PET manufacturing is fairly decentralized. So we have enough scale because we are producing 600 million bottles at this facility. Moving on to your question as regards to glass bottle, we expect glass bottles to stay neutral to stable. We do not expect prices to move up. As this is a festive season and demand will grow for the P&A segment and the luxury segment, the demand for glass bottles in this quarter is likely to be higher than H1. So if at all, there is an opportunity to reduce the glass prices, it will offer only in Q4. Sure. One follow-up here.

So you mentioned that in terms of PET, it’s more of a smaller radius where the supply makes sense. So will this be more for Telangana and maybe the adjoining states? And in the long term, would you need to put more such. PET factories in any of the other states in the longer term? So by design, we’ve chosen Telangana. Because our Telangana consumption is roughly 65% of our total PET consumption. So we’ve gone to the biggest market. And you are absolutely spot on that this unit will feed Telangana and the adjoining markets of Andhra. And pretty much the entire capacity will get used up in these two states. Once we have. Started realizing the benefits from this PET plant, then perhaps we’ll see if there’s any other market that can justify scale and volume.

But I think for now, we’re quite happy with this one unit in Telangana. Sure. My second quick question is on the super premium luxury top end of the P&A. You are doing a lot of interventions there. I also see almost every other player listed, unlisted also, do a lot of stuff there. And almost everyone seems to be succeeding. So my question here is, is this just mostly upgrading from the lower end, or is it that there is some market share gain you are seeing? Because we are seeing good numbers from almost every player. So wanted to understand that a bit more. Sure. I think there are three or four key trends that we need to understand. First is that Indian consumers are now happy consuming, serving, and gifting Indian brand. And that is.

A trend that you will see across the entire F&D and many other consumer categories. And therefore, consumers are giving Indian brands as much a chance as they would give to. An international brand. So that one barrier is removed. There is, in fact, a positive bias for Indian brands. So consumers are happy trying Indian brands. The second thing is that launching a brand in the luxury segment. Is required, but it also needs continuous flavor. Offerings to be made to the consumers. So just to give you an example, Zoya Gin was our first luxury brand that we launched in January ’24. Six months down the line, we followed up the launch with Zoya Watermelon and Zoya Espresso Martini. Today, 30% of the brand volume comes from our flavor extension, and the brand is growing almost 4X since April this year itself. So.

The discipline that a luxury portfolio requires is also continuous product development. I think the third thing is that we have to think of India and beyond, not just to rely on the Indian market. So like I had explained earlier that we have opened up UAE for Zoya, UAE for Art House. We are opening up travel retail. Bangalore. Is up and running, and many more will be up and running in H2. So I think. Sort of re-engineering distribution, continuous product development, I think, are two important things to. Succeed in this segment. And that, I think, is what we believe our right to win. Sure. Last question. What will be your thoughts on Maharashtra-made liquors? The pricing seems quite aggressive in my view. So what gets adversely impacted? Is there some silver lining for you also?

And on Andhra, if you could tell us that the entire market is booming, how do you see. The second year? And in terms of Q2, how has been the growth in Andhra? I would say, as far as Maharashtra is concerned, it’s a little bit early to. Form a view. Of course, the IMFL volumes have come down by about 20%. But I think it’s a little early. We should give it this quarter before we can come up with. Sort of an informed view. All we know for now is that IMFL volumes have come down, and. There has been no additional. Revenue for the state. So if the very purpose of the policy was that the state wanted to make more revenue, we have not seen any evidence of that. Of course, at an industry level, we are continuously engaging with the.

Policymakers that this policy is not delivering. On the objective that you had laid out. But I would say we have to give it this quarter before we can take a more informed view on the market. Moving on to Andhra, we have pretty much more than doubled our. Volumes in Andhra, and we stay optimistic on possible. Growth. While the tender conditions have been announced, we are hopeful that in time to come, new brand introduction will also be allowed. And we have a very interesting lineup of brands for the Andhra market. So we are looking forward to. Seeing higher growth coming from Andhra as a state. Any initial views on MML, Maharashtra-made liquor? No initial views on MML. Sure. Thanks. That’s all from my side. Thank you. Thank you very much. Thank you. The next question is from the line of Nithin from MK Global.

Please go ahead. Thanks for giving me the opportunity to ask questions. My first question is around. The impact in mass premium you highlighted. I guess it is to do with the Telangana. So maybe if you can highlight. How do you see the market or the retail structure evolving? Sorry. Can I request you to repeat your question again? Yeah, sure. So my first question is around the Telangana market. Because of this retail licensing, I guess your popular segment growth has got impacted on a YY basis. Any incremental viewpoint you want to offer there? No. This is not just. As far as Telangana is concerned. On back of the licenses, because the retailers are pretty much buying what is getting sold. So this has impacted all segments, not just mass premium. Now, the good news is that the. Lottery has been concluded.

The new one has been identified. And from 1st December, this will be business back as usual. The correction that has happened, we see a significant part of the pipeline correction to correct itself in the month of December itself. So we are gearing up to meet that demand. So everything will normalize in Q3? Mostly, it will normalize in Q3. That is right. Sure. Thank you. Second, with respect to this ABD Maestro. We are expanding. Sort of our market. And. In terms of revenue contribution. So by when? Is there any sort of a benchmark when you will start highlighting about the ABD Maestro? I know that for three years, you will be reinvesting in the business. But my point is that if the sales is coming in and we are investing, will it have an impact on the margin for the overall company? Sure.

So I think first, maybe a trivia point. For every 1% volume contribution from ABDM in the future, it should have an 8X impact on our top line. So the impact is fairly significant. And of course, it will take us maybe six to eight quarters to be able to reach that milestone. The good news is that ABD Maestro is currently running on a—its revenue run rate is now about 40-odd crores, right? And we expect this to pretty much grow at a very fast-paced quarter-on-quarter basis. So I think when we talk. We connect again at the end of Q4, we’ll be able to give you a reasonably good view on where and how what our projections are. But so far, I think we are on the right track. This 40 crores you are highlighting, is it for this quarter, or you are talking about the first half?

I’m saying the run rate. The run rate of ABDM is already at about 40 crores ARR, and it is growing month on month. So by the end of this financial year, we’ll be able to give you a very clear idea on what our future ARR annual run rate would be all about. I think it’ll give us a much better view. But like I said, currently, we are on track. Sure. Thank you. This is helpful. My last one question is around iconic Y. Would you like to call out the volume for FOSTA? It’s just about 5 million Ks. It’s shared under 5 million Ks. Thank you, sir. All the very best. Thank you very much. Thank you, sir. The next question is from the line of Sanjay Manyal from Dam Capital. Please go ahead. Hi, sir. Congrats on a good set of numbers.

You spend a lot of time in your commentary about the international market. So I just want to understand what kind of a run rate we are sort of. Doing at this point in time and what are our plans over the next two years? Is there any certain number if we have. Sort of a target over the next two, three years for our international business? I think there are two key initiatives for our global market. One is mid to long term. If you were to go back, FY24, we were in 17 countries, largely concentrated in the GCC space. Where we are now is we are 30 countries expanding. Apart from GCC, we are building Africa as a very, very important market. And like I said in my call also, we are looking at building a million Ks business in the Africa market.

In addition, we have also opened up critical markets towards the Western Hemisphere. So we opened up Canada and USA. We have opened two markets in Europe. We are also considering creating. A hub in Europe for supplies across countries within Europe. We’ve opened up Australia, New Zealand, and we have opened all of Southeast Asia. Therefore, if you look at our distribution footprint, this will support. Brands like Officer’s Choice, which cater into the Indian diaspora, largely in the GCC market. It will cater into our P&A segment, especially in the Africa market, because products are very well spent. And the footprint that we are expanding into the Western Hemisphere will really be relevant for our ABDM portfolio. So what we are really doing is to build a product portfolio and the distribution expansion hand in glove, right? So that’s really where we are in terms of. Our strategy.

Currently, about 8% of our value, our top line, comes from. Our international market. We believe that once the ABDM portfolio rolls out, which is significantly at a higher NSV, we believe that the contribution share from our international revenue could be between 12% to 15% of our total value. Great. Secondly, I have a question on iconic Y. I think your run rate is close to 10 million cases for the annual number. I believe with this kind of run rate, you might just achieve that this year itself. You, again. Is it the growth because of the distribution expansion? I think the number of states. Where you have entered. This year itself. So. Will we be sort of when will we be lapping the overall distribution. As far as iconic Y is concerned?

So as per domestic markets are concerned, our national rollout got finished sometime November, December last year with opening up of Andhra and Delhi. So with that, we have finished or concluded the rollout domestically. International market, we are currently in about eight markets. We believe this brand. Has relevance across 25, 30 markets. So we are expanding the global rollout as we speak. I think in our view, this brand has a legs to be a market leader. So. How we take this brand forward with the consumer is something that we are looking at. So we stay very optimistic about the growth of iconic Y even in the near future, for domestic and in overseas markets. And we’ll be top five brands. I mean, iconic Y will be top five brand currently, whiskey brands in India? Top five, one, two. Yeah. Yeah, top five, one, two, three. Yeah.

It should be top five brands. That’s right. But I think the aspiration is to at least move two notches up. Right. Right. And lastly, on Telangana overdues, if you just can spare some time on what is the status at this point in time, I believe last quarter we heard that some overdues have started coming. What’s the current status? And when do you expect this entire thing to get resolved? So I think we’ll have to take the Telangana overdues on a month-on-month basis. I think the. Engagement with. The corporation and with the respective. Policymakers is fairly intense. And we have seen some result of that coming in the month of October. But we’ll have to take month-on-month rather than sort of. Rather than have a clear. Outline on when the position, the money will get paid.

But I think from what we heard and our engagement with the government through the industry body, I think this issue is at the center of discussion, and we see continuous reduction in the overdue. Okay. Possible to give an exact number. Overdue currently? For the industry level, I’ll have to really pull it out. It’s not handy with me at this point of time. But if I was to go by a press report that I read a couple of days back, the number is north of 3,000 crores. Okay. Thank you. Thank you very much and all the best. Yeah. Thank you. Thank you. The next question is from the line of Anuj D from Antik Stock Broking. Please go ahead. Hi, Tim. Thank you for the opportunity. Just a couple of questions from my end. So iconic has now delivered 4.9 million cases. In the first half.

So when I look at it as a percentage of P&A, it has moved up to roughly 60% from the previous 43%. So are we seeing a decline across the other. Major brands such as Officer’s Choice, Blue, SRB7, and SRB10? And. I know you had called out that the blend has been revamped for SRB7. So sort of what is the trend moving ahead for these three brands? So on SRB7, like I had covered, I think we are. We have put together the entire program on So Smooth Must Be Magic, with the focus being at the blend at the heart of our communication. Very happy to share with you that in our priority one market, we are back on the growth track, and we are expanding this program nationally. And therefore, we see this brand coming back on the growth track by the end of this year.

Iconic operates at a price point identical to OC Blue. The market share that iconic Y has been able to garner comes from. Established brands in the same price point, be it Imperial Blue or McDowell Numbers One, and also from OC Blue. So there is a bit of cannibalization. But the way we look at the segment is that what percentage of the segment we have combined between OC Blue and iconic. So when you put together, our market shares have only moved up. Anything on SRB10? SRB10 was always a very strong brand. We do. Close to about 250,000 cases. It was never a big contributor. However, the good news is that. We are looking at strengthening this brand in the defense channel, both in CSG and paramilitary. So. The growth will be driven by focusing now in the defense. Channel. But. Overall.

SRB10 only contributed about 250,000 cases in our P&A. Sounds good. Thank you. Thank you. Very helpful. Very helpful. Thank you. The next question is from the line of Ishan, an individual investor. Please go ahead. Yeah. Thank you for giving an opportunity. My few questions. My first question is that we have seen a degrowth in our mass PM category. So would you like to comment what is the. Reason for the degrowth in the mass PM category? Is it the competition or any other thing? My second question is— Sorry. Please go ahead. Hello? Please go ahead. My second question is—yeah, yeah. My second question is regarding the prestige and above category. So we are seeing that iconic Y brand is contributing almost more than 50% of prestige P&L category. So are we quarter cutting too much on iconic Y?

And it is also risk that tomorrow the growth comes down in the iconic Y, that it will negatively affect the top line. And also, I’m seeing that we have a guidance of P&L failures to mid to 50% by the end of FY28. But we are already, I think. From the volume failure side, we are already having a 48% of P&L contribution. So would you like to revise your guidance for FY28 for the P&L category failure? I think the guidance for the P&L failures was 50% by FY28. We are at 47, as you rightly pointed out. I think if there’s a need to revise this guidance, we will certainly do so by the end of this financial year. So allow us to come back to us on new guidance. As regards the mass premium.

Segment is concerned, I think we covered both the point on this call. MML, which is the MML policy in Maharashtra, has an impact on. The entire Alcoveb market, especially on. The mass premium. Secondly, the temporary pipeline correction that we have seen in Telangana. So degrowth largely is on account of these two factors. So Telangana situation, we expect to majorly course correct by December as the new licenses—we know who the new licenses are—they will be signing up the new shops and moving forward. Maharashtra, of course, is a bit of a wait and watch. So only by the end of this quarter, we’ll be able to figure out as to which way the IMFL sales are settling down. Okay. And what about your view about the iconic Y that’s contributing more than 50% of the P&L category, right?

So we have the iconic Y that’s too much concentrated over P&L. So should we focus on diversification. Between various brands? If you look at the industry, construct the industry is about 400 odd million cases, of which 160 million is what we call as the P&L or the prestige price point. Of this 120 million cases is whiskey, and about 40 million cases is brandy and vodka. The way we are architecting our portfolio strategy is with SRB7, iconic, and OC Blue. Continue to get market shares from the 120 million case whiskey prestige market and introduce brand in the prestige brandy and the prestige vodka segment. So prestige brandy, we have already launched Golden Mist, which is at the early stages of launch, currently available in the state of Telangana and the state of Karnataka.

And we are hopeful, like I had explained earlier, that we should be able to get brand approvals in the state of Andhra. So the 40 million cases, which is prestige brandy and prestige vodka, one brand is already rolled out. And we are also looking at rolling out a prestige vodka. In the next few quarters. So the idea is. Get profitably shares of the 160 million prestige. Price point through a combination of whiskey, brandy, and vodka. Therefore, overall portfolio will expand, not just in whiskey, but it’ll become a multiple flavor portfolio. Okay. Yeah. That’s all from my side. Thank you. Thank you, sir. The next question is from the line of Sunny Gosar, Prabham K. Ventures. Please go ahead. Yeah. Thanks for taking my question. And congratulations on a very good set of numbers. I have a couple of questions.

First is with regards to the state of Telangana. In the presentation, you had mentioned that. In the month of October, you started collecting some overdue amounts. So if you can give some color on. What’s the outlook in terms of overdue. Receivables in Telangana. And second, on the state of Telangana. Is there any possibility of price hikes or any pricing committee which has been formed? So that’s my first set of questions. Right. So the pricing committee has been formed. The pricing committee has already. Given a price increase to the beer segment. This will be followed, as we understand, with BIO, followed by IMFL. And the logic being that we got a price increase in May 23, which was roughly two years back. And the other segments got price increase. About four or five years back.

So the price committee is up and operational, have already concluded beer, in the process of looking at BIO, and then we’ll look at IMFL. So we. Are in active discussion with the. Corporation in terms of taking up the case of the IMFL industry as soon as we can. On Telangana. In the month of October, the money that got released against the old overdues. The money that got released is north of about 100 crores towards the old overdues. Got it. And in terms of. Clearing of the overdues, is there a pathway or visibility in terms of. Or any timeline that the government has indicated. To basically reduce this substantially further? The government has given us an assurance that they will, every month, give us not only clear current dues, but will also release a part of the overdue.

They have not given us a quantum, and neither have they given us. A timeframe. So like I said, we’ll have to take. Each month in a stride and just make sure that we are continuously having a dialogue so that every month this position becomes better and better. Got it. My second question is on the CAPEX program. So our overall CAPEX program was about 500 odd crores. What I would like to understand is how much of this has already been spent till, say, September. ’25? And what is the pending cash outflow over FY26 and FY27? Okay. So if you recall in the earlier call, I had outlined roughly 25% of this 527 crore was invested last financial year. 60% of this 527 crore will be invested in this financial year, and the balance 15% will be invested in the next financial year.

So the CAPEX investment is broken 25% last year, 60% this year, and 15% next year. Got it. So 300 crores approximately in the current year and about maybe 100 to 125 crores in the next year. Yeah. You’re right. Some 100 crores in the next financial year. And like I had said earlier, I’m reconfirming that all the three projects are on time. We have said PET project will start in Q2 FY26. We started production in Q2 of FY26. The plant is now running to capacity of 600 million bottles a year, which is 50 million bottles a month. And the Maharashtra E&A facility is also on track, and so is the single malt plant in. Telangana. Got it. Got it. And one last question is on the ANSP. Spend. So what is the current. Percentage in terms of ANSP spend?

And basically, as your P&L mix increases, what is the normalized level of ANSP spend that you are looking at. Over the next one to two years? So the ANSP spend. The demand in the mass PM segment is pretty low. So when we look at our ANSP spend, it is roughly 4.5%, 5% of the P&L NSP. So our P&L NSP is X. We invest about 4.5% to 5%. As ANP. The way we are looking at it is to increase our ANP investment between 75 basis to 100 basis points year on year for the next two or three years. Got it. So basically, on a blended basis, this will be lower than 3%, right? Assuming mass premium and P&L? Just about 3%. Got it. And this 3%, again, on a blended basis, should go to, say, between 4.5% to 5% by. FY28. Is that correct?

A little lower than that. Got it. Got it. Perfect. Thank you so much, and all the best for the future. Thank you. Thank you very much. Thank you, sir. The next question is from the line of Kunal Shah from Jefferies. Please go ahead. Hi. Thank you for the opportunity. My first question is on iconic Y. And specifically on profitability of that brand. So if I remember correctly, you had highlighted a few initiatives, use of market bottles, removal of monocartons in this brand to improve profitability. I wanted to get an update on where are we in that journey, how much is left. And in the markets where you have done, let’s say, removal of monocartons, have you seen any impact on, let’s say, brand perception or growth or anything like that? So let me take the easier one first. The markets where we removed monocarton.

There is no impact. I think numbers speak for themselves. We did about 5.7 million cases all of last year. We’ve already done 4.9 million cases in H1. So the brand continues to grow organically. I think what is really working well for the brand is what we would call in classical marketing terms is word of mouth. I think consumers, they love the blend, but they like the packaging a lot, but they love the blend, and that word is spreading. So that’s part one. On the monocarton removal, you will recall I had said within 12 months of launch, we removed. Our last packet of launch was November and December last year. So it’s really Andhra and Delhi. So by December, the entire exercise of monocarton removal will be concluded.

On the market bottle utilization, while our overall market bottle utilization is north of 20%, iconic has really ramped up. It’s at about 16%. And we are hopeful by the time we are finishing this year, the market bottle would also be operating at about a 20% level for iconic Y. Understood. Very clear. And I mean. Just to clarify, there’s no plans of any changing pricing or liquid. Profile. As a part of your margin improvement in this brand, right? What we’re focused on is to. Really work on. Price variants and work on flavor variants, which means really in a meaningful manner, see how we can extend the brand equity of iconic and your price point and your flavor. But the core iconic Y will continue to play by and large between the deluxe and the prestige price points. I think that positioning will maintain. Understood. Very clear.

My second question was. On the SRISTI brand, any update you can share on how. Is that brand tracking? What’s been the response till now and any progress that you expect in the near term? We’re very happy with. The SRISTI. We are currently selling it in two markets only, in UP and in Haryana. I think we have a clear goal from the customer in terms of. The brand proposition, which is an Indian brand with an Indian soul. As you know, this brand has a unique botanical that comes from which is unique to India. However. I think some interesting points were in terms of our packaging. So we are looking at. Re-engineering some of the design semiotics and get back to the market in Q4 and thereafter roll out in the top 10 markets of India. Understood. Very clear. And lastly, a bookkeeping question.

Any one-offs in the employee cost, or we should assume that this run rate continues? There is a one-off, which is the payment, which is the VPIP, which is a variable component that got paid out in H1. And therefore. That is the only one-off in H1. Understood. So on a normalized basis, let’s say 50, 55 crores a quarter should be the right number, or if it’s— Yeah. I think it’s a good—I think it’s a very good estimate. Understood. That’s clear. Thank you. Thank you, sir. Thank you. Thank you, Kunal. Thank you, sir. The next question is from the line of Karan Kandhar from Choice Institutional Equities. Please go ahead. Hello, sir. Congrats on a very good set number. A forward-looking question is that what stage do you see as.

Future areas of growth, especially for iconic Y and SRISTI, the brand that we are betting big on? So as far as iconic Y is concerned. The brand will continue to grow organically. It continues to get share both from the deluxe price point and the prestige price point. A point that we made earlier is that it is seen as— It’s seen as—It seems its franchise is very strong among a younger consumer. So India is adding about 12 to 13 million consumers of legal drinking age. Some of them will take an informed decision to enjoy an alcoholic beverage, and they will look for a brand that is trending amongst the younger consumer. So iconic Y also gets a larger share of the growth that is coming from your consumer.

And on back of— And therefore, its ability to get consumers both from prestige and deluxe and the newer consumer is a continuous growth engine on the brand. In addition, we are also looking at. In a meaningful manner, looking at price and flavor variants to grow the brand franchise. And we are already in about seven or eight markets internationally, also to grow its footprint from seven or eight markets to hopefully 20 markets in time to come. Okay. Go ahead, sir. One last question, if I can, is what are any updates on on-trade sort of effort that you are making? Last quarter, you gave an update that we started going out and doing some on-trade activity. Any update on that front? Absolutely. We are now—ABDM products are now available. On 2,000-plus outlets. So it’s been a fairly aggressive. Rollout of the brands in the premium on-premise.

In addition, we have listings from three of the large hotel chains in India. And that itself will give products an excellent exposure to those who stay in these hotels and an opportunity to try the products. And thirdly, like I had said earlier, we’ve been able to—We are looking at the travel retail channel very seriously. We’ve been able to open up two travel retail within India and H2. Hopefully, another two or three travel retail will open both in India and overseas market. So on-premise, key accounts, and travel retail will continue to be a very important area of distribution focus, especially for our luxury portfolio. Okay. Any key brands you would like to highlight, which you are pushing for on-premise?

Well, the on-premise focus, I would largely say, as far as the key accounts and premium on-premise travel retail is concerned, the focus is going to be on Zoya, Art House. The entire portfolio of the ABDM is going to be a big focus area. As far as brands like SRV7 and Iconic are concerned, these are also brand franchised at on-premise. Of course, the nature of on-premise is very different. So essentially, we have to see the on-premise fit with our brand, but each brand has its own on-premise program. Okay. Thank you so much, sir. Thank you. Thank you. Thank you. Thank you, sir. The next question is from the line of Yashpajaj from Lucky Investment Managers. Please go ahead. Yeah. Thanks for the opportunity and congratulations on a good set of numbers. So my first question was on the malt destinary, which will come up.

By end of this year. This financial year. So if you can help us understand, I understand that, I mean, the initial priority will be to utilize that for blending of our. Whiskey products. But when it comes to, suppose, the single malt side of it, where are we in that journey in terms of. Kind of deciding. And choosing what. Brand you are planning to launch in single malt? And. Especially on the side of. In terms of brand identity of that single malt which you’re trying to launch. And when would we see this? All right. Thank you for this question. Before we started this journey, we essentially made an attempt to understand how single malts are getting launched across the globe today. Single malts not just come from Scotland or from Japan. They also come from Taiwan, Thailand, US, Germany.

Even China is planning to launch its own single malt. So the idea was to understand that really what’s the right-to-win when we launch single malt. The single malt distilleries that we are building in Telangana, the first thing is we are focusing on authenticity. We are focusing on. A story that is. Sort of. Deeply connected with the 2,000-year history of Ranganapur district. So we’ve done a lot of research work in what has happened in Ranganapur. We are a tribute to River Krishna from where we’ll draw water for our single malt. So right from the way the single malt distilleries are getting built out. We are on every. Step trying to make sure that we stay authentic to the environment and the sort of ecosystem in which the single malt is being made.

The production is likely to start in Q4 in this financial year, like you said earlier, and we are on track. The total production that we’ll do there is 4 million liters. A part of this production will go towards raw material, and a part of this production will go towards. Maturation for our single malt. So our master blender has visualized as to what kind of a single malt profile we would launch. In 2029. That is when we are targeting our single malt to come out. And right from. Distillation to maturation to the kind of cask, the maturation will happen. I think that blueprint is already ready. So quite excited about bringing our single malt in 2029. And one quick point that I’d like to cover earlier is that in anticipation of the single malt, we are also strongly building our distribution globally.

Therefore, addition of markets in Northern America, looking at setting up our hub in Europe. And the Southeast Asian market. We’ve already started work in anticipation that we’ll have not just our luxury portfolio, but also have our single malt in 2029. Got it. Just a follow-up on this was. The casks. I mean, how important or differentiating is the cask which we use for the maturation of the malts? And I mean. Where would these casks be coming from? We understand that. There are these casks which are available all across the globe. So if you can just help us understand that, which will help you bring that authenticity. We can. Spend a full day talking about it. I’ll try and keep it very simple. As you know, the. Character of a whiskey is determined by three things. It is determined by the wood in which the.

Spirit is matured. The environment. In which the whiskey is matured, and the water. That is used for the maturation process. Therefore, wood plays an extremely important role. And that’s the point I was trying to make that the master blender has already thought through in terms of what profile of whiskey do we want in 2029, and therefore, what kind of cask mix that we need. Broadly speaking, we’ll use three kinds of casks without dwelling into too much detail. We will use one huge bourbon cask that predominantly comes from the US. We will use some casks that are used in the Scottish malt industry. And we’ll use some sherry casks coming from France, which are used for the wine industry.

And as the whiskey gets matured and rotated in these three different kinds of casks, by 2029, we’ll have one unique single malt coming out from our unit in Ranganapur. Understood, sir. And my final question is, sir, the 12 million cases, which is a super premium segment, if you can help us break that out into, suppose. Dark spirit and white spirit. And at what rate would this piece be growing at today? Okay. I think predominantly it’s dark spirit. A lot of this is really whiskeys, both non-Scotch and Scotch. We know the growth of Irish whiskey in the country. We know that consumers are loving Japanese whiskey. There are bourbons. So dominant flavor profile. Upwards of close to about 90% would be whiskey. And balance is going to be. Whites, which is tequila, vodka. Gin, white rum, and many others.

So that really is the broad dark to white. Breakup. And at what rate would this be growing at, sir? Just give me 30 seconds. I’m going to give you the number, but I reckon that it’s going to be high double digits. Okay. Got it. Thank you so much. Thank you. Thank you. The next question is from the line of Natech from NV Alpha Fund. Please go ahead. Hi, sir. Thanks for taking my question. So I just need one clarification. You mentioned you have received roughly 100-odd crores from the Telangana deal. So if you can just confirm that. And a follow-up question on the same is how much amount is still to be received from the Telangana government? So I can confirm that we have received over 100 crores from the overdue. Amount from the Telangana government.

And our total due at this point of time— Let me just. Page down and figure out what the number is. Just give me 10 seconds. Yeah. It’s about close to 700 crores, of which roughly. 253 crores would be current due, and the balance is going to be the overdue. Got it, sir. Got it. Sir, another question is, what is the volume from exports currently? If you could give me that number. Volume is north of 2 million cases. 2 million cases. And we expect to add another million from Africa by when? So this 2 million cases is the annualized market. And we are looking at Africa to be a big growth market over the next two or three years. Okay. Got it, sir. That’s it from us, sir. Thank you. Thank you. Thank you, sir.

The next question is from the line of Abhinav Rao from India First Life Insurance. Please go ahead. Hello. Yeah. Hello. Hi. Yeah. Hi, sir. Sir, I wanted to understand. In UK. Iconic World is doing a million-odd cases. So that’s close to 20% of your volumes. So can you just detail the reasons for. This sort of growth in UP market? Is our product priced higher or lower comparing. It with. Imperial Blue? So UP as a market. As we all know, is a fairly progressive state. I think the policy structure of UP. Really allows for what I call as accelerated premiumization, making it easier for consumers to move up the value chain. So it presents a unique opportunity for marketers to take advantage of it. And ABD has done exactly that, is to take advantage of this. Policy framework, which allows consumers to premiumize. Iconic.

Has been a fast-growing brand in the state of UP. This year, of course, we made UP a priority market largely because. The policy allowed the way the policy was structured, we expected these price points to have high growth. And therefore, as a result, we are seeing accelerated growth of Iconic White in UP. On the pricing, there is not a single market where Iconic White operates below an Imperial Blue and McDowell’s number one. We operate either at parity or at a higher price. Okay. But in this category, in the state of UP, are we the market leaders in terms of volume? Well, I think in this quarter. By the end of this quarter, we do believe that we could have. We could be a market leader in this segment. Okay. And sir, there are other things.

On the luxury side, can you just share the details of your brand expansion brand-wise? I mean. Are all the brands currently available in all the states, or is it just limited to a few of the states? And the other thing is on the Russian standard vodka. How are the margins here? Is it more or less distribution margins, or is it some. I mean. Some brand sort of margins? How is it? All right. Let me see if I can provide a framework which makes it simpler. Our focus till H1, which is September 25, was to get our portfolio in place. We have now six beautiful brands in our portfolio, which is Zoya with two variants, which is Watermelon and. Espresso Martini. Art House, Woodburn, Tomori, Sagrado, and Russian Standard. We are also planning to launch three new brands in H2.

One of them is going to be a white, and two other whiskey, one Scotch, one non-Scotch. And that sort of gets our portfolio to completion. And once. The FT is in place, we will look at entry strategy in the VIX Scotches. But for now, by end of H1, we have six brands, three new to be added in H2, and that was clearly our focus. In parallel, we have focused on three other things. Number one, we have focused on building capability. So ABD Maestro, our subsidiary that focuses on luxury portfolio, has gone to build on. An infrastructure which is focused on key accounts and on-premise. So it’s a 50-people strong team which brings in capabilities on key account management, mixology, cocktails. How to manage social media space. So that’s a capability now that is fully ready and baked in.

And third focus is on distribution, like I spoke about earlier, both in the Indian market and in the global market. As far as domestic off-premise is concerned, ABD is available in 93% of the outlets. So it becomes easier for any of the luxury brands to. For us to distribute. But ABDM is focused on key accounts. We’ve already got listing north of 2,000 outlets, and the listing grows on. A weekly basis. And the third point is a look at countries beyond India and also focus on travel retail. So H2 for us is going to be a focus on. Expanding distribution in identified states, expanding distribution globally, and also expanding distribution in the travel retail. And a point that I was making earlier on is that by end of this financial year, I think we’ll have.

Some really good data points to talk about how does the future look like and at what speed can we move forward. Our current ARR is about annual run rate is about 40 crores, but it is growing month on month. And. We’re quite happy with the progress that is being made. Okay. On the margins related to Russian Standard, can you share anything on that? The standard margins would be 4X of. Distributor margin. We are not distributors. We are India partners. Our entire go-to market is as partners of a brand in India. Therefore, the way we are positioned is to at least have. Margins which are value-accredited for us. So margin range would be about 4 to 5X of what a typical distributor margins are. Net retained margins. Net retained margins. Okay. Yeah. Thanks. Thanks. Thank you.

The next question is from the line of Nathan from MK Global. Please go ahead. Thanks for the follow-up question. One question is around your cash flow and CapEx needs. So. We’ll be going ahead with the CapEx need, and we have around. 50% dividend payout. So how do you think the CapEx will be funded ahead? Is it like we have to resort to borrowing, or do you think that cash generation will be sufficient for the CapEx need ahead? No, we will need to borrow. The balanced CapEx for this financial year. But the way we have. Planned our borrowing is to make sure that it is done within all the key ratios that we have internally agreed as. The growth must be driven within certain. KPIs. So all the borrowing is keeping those KPIs in mind. But we’ll have to do a bit of borrowing.

And any sense on the dividend payout? So would you look to maintain or? This question is for next year because this last year’s dividend has been paid out this year. So I think we’ll address this question at the right time. Sure, sure. Thank you. This is really helpful. Thanks a lot. Thank you. So I guess if you’re done with all the questions. We can close the session for the day. But if there are any further questions, happy to address. Sure, sir. Participants who wish to ask a question may press star and one. The last question is from the line of Ayush, an individual investor. Please go ahead. Yeah. Thank you for giving the chance and congratulations on a good quarter.

My only question is that from which quarter we can expect the input duty reduction on the sales of India UK FTS tax going into our margins and numbers? I think at this point of time, we believe that this could be around quarter one to quarter two next financial year. Okay. That’s the only question from my side. Thank you. All the best. Thank you very much. Thank you. All right. Ladies and gentlemen, thank you so much for your time and for your questions. And thank you for sharing your wishes with us. We truly appreciate it. On behalf of Antex Stock Broking Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

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