Tilaknagar Industries Ltd
NSE:TI
Tilaknagar Industries Ltd
Tilaknagar Industries Ltd. engages in manufacture and sale of Indian made foreign liquor. The company is headquartered in Mumbai, Maharashtra. The company went IPO on 2010-07-15. The firm is primarily involved in the manufacturing and sale of Indian Made Foreign Liquor (IMFL) and extra neutral alcohol. The firm has diverse portfolio of brands in various liquor categories, including brandy, whisky, vodka, gin, and rum. Its brand portfolio includes Mansion House Brandy, Courrier Napoleon Brandy-Green, Courrier Napoleon Brandy-Red, Vodka, Mansion House Whiskey, Senate Royale Whiskey, Madira Rum, and Blue Lagoon Gin. The company provides a range of recipes, which includes Brandy Flip, Brandy Eggnog, Brandy High Ball, Brandy Milk Punch, Metropolitan, Lumumba, Chicago Cocktail, Apple Fizz, Lebrandy Milk Bonanza, Brandy Collins, Mata Hari, Cuban Libre, Brandy Smash, And The Warm Punch. The company has one owned facility, approximately three operating liquor subsidiaries, three leased and over nine tie-up units located across India. The company exports its products to East and South-East Asia, Africa, the Middle East, and Europe.
Earnings Calls
Tilaknagar Industries rebounded with a remarkable revenue growth of 20% in Q4 FY '25, reaching INR 406 crores, driven by a 19.2% rise in net revenue sequentially despite an initial price drop in Andhra Pradesh. The EBITDA improved significantly, up 62.6% year-on-year, leading margins to expand by 600 basis points to 19.3%. Looking ahead, the company targets an EBITDA margin between 15.5% and 17% and revenue growth in the upper teens for FY '26. Their robust cash position of INR 107 crores highlights financial strength and the commitment to dividend distribution, signaling a confident growth trajectory in premium markets【4:0†source】.
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Ladies and gentlemen, good day, and welcome to the Tilaknagar Industries Limited Q4 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Rangnekar from CDR India. Thank you, and over to you, sir.
Thank you. Good morning, everyone, and thank you for joining us on Tilaknagar Industries Limited Quarter 4 and FY '25 Earnings Conference Call. We have with us today Chairman and Managing Director, Mr. Amit Dahanukar; President, Strategy and Corporate Development, Ameya Deshpande; and Chief Financial Officer of the company, Mr. Abhinav Gupta -- we shall commence with views from Mr. Dahanukar on the strategic performance and Mr. Deshpande on the financial highlights. This shall be followed by an interactive question-and-answer session. Before we commence, kindly note that the call could contain certain forward-looking statements is uploaded on the stock exchange website. I would now like to invite Mr. Dahanukar to make his opening remarks. Over to you, Mr. Dhanukar.
Good morning, everyone. Happy to have you all join us on this earnings call to discuss the quarter 4 and FY '25 results. After a subdued first 9 months of the financial year due to industry-wide disruptions in some of our key states, I am happy to share that we are back to our industry-beating growth trajectory on the back of stable and progressive excise policy changes as well as our new product launches.
During quarter 4, our volume performance was strong with growth at 20.1% year-on-year and 13.5% quarter-on-quarter. The route-to-market change in our largest state of Andhra Pradesh is now firmly behind us and has stabilized. Not only have we seen our market share inch back to earlier levels, but rather over the past 3 to 4 months, have seen them expand. And we expect to maintain, if not better, our share in one of the fastest-growing IMFL states in India. Our other core southern states have also continued to showcase impressive growth with each of them improving market share in Q4. Karnataka, on the back of reduction in excise duties in mid-FY '25, has seen strong growth momentum with our volumes in the state growing by more than 25% Y-o-Y in H2 FY '25.
We continue to be the third largest P&A IMFL player in Karnataka, a state in which more than 80% of all IMFL consumed is whiskey. This is especially noteworthy given that our entire portfolio in Karnataka currently consists of branded products. We expect this trend of market share expansion to continue across all key states, given our strong launch pipeline for the quarters ahead.
On the portfolio front, our luxury and super premium portfolio is showing promising signs. Monarch Legacy Edition Brandy, our first luxury foray has now been launched in Maharashtra, Goa and Puducherry and has shown encouraging traction not only from the trade, but consumers as well. The brand is especially doing well in Puducherry with a very good bit of distribution achieved and repeat orders coming in.
Business on the back of our usership agreement with Spaceman Spirits Lab, our investee company, has also kicked in. We did our first dispatch of Samsara gins in April 2025 and believe that the SSL portfolio comprising of Samsara Jin, Sitara Rum and Amara Vodka will be a big contributor to our super premium portfolio. As mentioned earlier as well, Tilaknagar Industries will leverage its robust distribution network to sell SSL brands in certain states in India and abroad.
With the above and the impending super premium whiskey launch in H1 FY '26, we will have a play in the luxury and super premium segment in all the 5 key categories of IMFL, whiskey, brandy, gin, vodka and rum. Our mass prestige portfolio, including Mansion House Brandy and Korean Napoan brandy continues to perform well. Our commitment to ensuring brandy's share of voice reflects its share of market remains steadfast. While we are still in the early stages of our marketing investment journey, we are beginning to see a shift in consumer perception. Through continued marketing efforts and innovation, we are optimistic about making brandy a more aspirational and inclusive category.
While brandy continues to be our dominant category in the portfolio, we have made an entry into the semi-premium whiskey segment with the relaunch of Manionals Whiskey in the new Avthar. We have launched Mention O Whiskey in East and Northeastern states of India and will be soon launching in our distribution strong states of South India. The initial traction has been encouraging. Our mid- to long-term aim is to expand on our non-branded portfolio through innovative launches in the growing and profitable prestige and above segments. These launches will fill up gaps in our portfolio and enable us to have a more meaningful play across the country.
Before I hand over to Ameya, I will very briefly talk about our financial performance. Our revenues in Q4 saw a healthy growth of 13.1%. The revenue growth was subdued vis-a-vis volume growth due to a reduction in price in our key state of Andhra Pradesh from Q3 FY '25 onwards. However, for like-to-like comparison, we have seen a strong 19.2% quarter-on-quarter net revenue growth vis-a-vis volume growth of 13.5%. Adjusted for subsidy income, the net revenue growth is 15.4% Q-on-Q, indicating continuing premiumization trend. The strong tenant profitability continued, contributed by superior state as well as brand mix as well as operating leverage and disciplined cost management. EBITDA margin stood at 19.3% in Q4 and adjusted for subsidy income, the margins came in at 16.6%, a more than 300 basis points increase in margin on a year-on-year basis.
On the input side, ENA still remains volatile and some level of increase in Q4 compared to Q3 FY '25. However, we have seen some moderation in the ENA prices in April and May 2025 and are hopeful of a more conducive input cost environment. Our focused drive on cash flow management continues, and we now stand at a net cash level of INR 107 crores, showcasing our balance sheet strength. I am also very happy to share that the Board of Directors has recommended a dividend of INR 1 per equity share for FY '25 to the members at the ensuing Annual General Meeting.
As we look ahead, our strategy will be driven by enhanced presence across P&A within brandy and other IMFL categories through our own brands as well as investments. We remain confident in the potential of the business and our ability to support brand expansion in key and newer markets. Our healthy balance sheet position keeps us in good stead to charter growth path forward. I would now like to conclude my opening remarks and invite Ameya to continue the discussion with the operational and financial performance.
Thank you, and a very warm welcome to everyone joining us today. I'll walk you through our financial and operational highlights for Q4 and FY '25. As mentioned by Mr. Danukar, we are back to our strong growth trajectory, having grown more than 20% in Q4 FY '25. Our revenue for the quarter stood at INR 406 crores. And for the full year FY '25, we clocked a net revenue of INR 1,434 crores. Our net sales realization per case stood at INR 1,182 for Q4 on the back of the price reduction taken in Andhra Pradesh. This NSR will now form the base, and we expect the same to improve on the back of our premiumization strategies.
Q4 also marked another strong quarter in our profitability journey with EBITDA growing 62.6% year-on-year to INR 78 crores. EBITDA margins expanded by almost 600 basis points to 19.3%. Adjusted for subsidy income, the EBITDA margin came in at 16.6%. For the full year FY '25, EBITDA stood at INR 255 crores, reflecting a margin of 17.8%. Adjusted for subsidy income, the margin was 16.1%, a more than 270 basis points improvement year-on-year.
We expect the EBITDA margin to be in the range of 15.5% to 17% over the next couple of years. Adjusted for subsidy, PAT for Q4 stood at INR 64 crores, a growth of 62.6% year-on-year. For the full year FY '25, PAT, excluding subsidy, increased to INR 201 crores from INR 141 crores in FY '24. Our net cash position as of March '25 stands at INR 107 crores, a sharp improvement from a net debt position of INR 74 crores as of March '24, showcasing our disciplined debt and cash management strategies.
Before I close the opening remarks, I would like to reiterate that we remain committed to delivering profitable growth, expanding our presence in both existing and new markets and reinforcing our market leadership through focused innovation and strategic investments. We believe these initiatives will help us capture emerging consumption trends and create long-term value. With that, I would now request the operator to open the call for Q&A.
[Operator Instructions] The first question is from the line of Palak from Invest Manager.
I have two questions. My first question is related to volume growth. I mean, after many quarters, we have delivered such a great volume growth. But my question is, is that only because of the Andhra Pradesh? I mean, can you give us the volume growth, excluding the state of Andhra and which states have shown the positive movement? My second question is regarding the income tax assessment orders, which we have received. And I think in the last call, you mentioned that this quarter, you'll be able to -- you'll be in a position to give more color on that? So these are my two questions.
So I'll take the question on the volume growth. So the volume growth has been 20%, and we expect to maintain this momentum going forward into this current financial year. Of course, the growth in Andhra, because of the subdued performance in Q2 and Q3, as elaborated earlier, the growth in Andhra was much more in quarter 4. But the other markets also have shown promising volume growth, particularly Karnataka. -- assessment, the CFO will take over. Yes.
So if you see, we have already informed to the stock exchange that post the assessment done by the income tax department, our carryforward losses stand at around INR 32 crores as on March 31, 2024. However, we have appealed against the assessment done by the income tax department with commissioner income tax, and that proceedings are currently underway. So we will be able to give you an exact or rather a more prudent advice post the outcome of the -- our appeal against the order at commissioner income tax level. As of now, you may assume no tax for the June quarter.
Sir, you mentioned INR 32 crores carryforward losses.
Yes.
So I mean from next quarter, we'll start paying the tax...
No. So we have already appealed against the order of the income tax, with commissioner income tax. We are hopeful that by next quarter, we will be able to know the outcome of the appeal. And accordingly, we will be able to inform about from when we will be required to pay tax.
Okay. Sir, just a follow-up question on my first part. So do you have any data on what was the volume growth, excluding Andhra?
Yes. So I'll just give you a basic sense, right? So while Andhra grew by more than 30% in Q4, states like Karnataka grew by more than 25%, right, in Q4. whole of H2 actually, Karnataka grew by more than 25%. In addition, also states like Tamil Nadu also contributed to our growth along with Orissa and Telangana.
Any specific reason why Karnataka growth was such good for us?
Yes. I think it's not only us, to be very frank, it's the entire industry, right? If you remember and also what Mr. Dhanukar covered in his opening remarks that excise duties were reduced in Karnataka towards the latter part of H1 of FY '25, right? So that brought down the consumer prices by a meaningful number. So that led to a significant growth in H2 for the entire industry as a whole. Obviously, we grew slightly higher than the overall industry, thereby increasing our market share in the state as well. And this growth, just to clarify, this growth predominantly came in the Prestige and Above segment.
And any market share gain number that you would like to give us, I mean, in state-wise. So you are saying that you have gained some certain market share. So can you give us a number?
State-wise, we can't get into the detailed specifics of state-wise in this forum.
[Operator Instructions] The next question is from the line of Chetan from Systematix Shares.
Congratulations on a good set of numbers. My question is on the Prague distillery. We had previously stated capacity expansion at Prague from 6 lakh cases to around 36 lakh cases. Could you please highlight, if any, or what proportion of this expanded capacity is intended to cater to the Andhra Pradesh market? And if so, is this decision primarily driven by the strong growth we are witnessing in Andhra region? Or is it aimed at only replacing the existing production from the contractual manufacturing units for cost savings? And secondly, again, can you also provide like more details of the evaluation process currently underway or when a final decision on this potential CapEx can be expected?
So we are awaiting decision from the government in terms of the calculation for the pending license fees because this application has been pending with the government for almost 10 years. During this interim period, there was a lot of ambiguity because Prague was also going through insolvency proceedings. So while we await pending final outcome from the government, we are readying ourselves that -- to make ourselves ready for the investment. So subject to approval from the government, the company will consider expanding the capacity at Prague from, as you have stated, from 6 lakh cases to 36 lakh cases. This is essentially because we are foreseeing a good growth in Andhra Pradesh over the next 4, 5 years horizon. It is a flagship state for us where we have maximum sales coming from Andhra. So it will not only replace the current capacity which we have, it will supplement it because even after the expansion, we will still require our contractual bottling partners. So it will supplement the existing partners. And as and when we take any firm view on this, we will intimate stakeholders through adequate disclosures.
The next question is from the line of Anjali Bajaj from Naredi Investments.
Congratulations for the good set of numbers. My first question is regarding to how has the price correction impacted the company's revenue and market share in Andhra Pradesh? What are the long-term implication of price correction in Andhra Pradesh? And second question regarding the how does S industry plan to manage and reduce the receivable in coming quarters? How much dues from the Telangana government as on the 31st March 2024 and 31st March 2025?
Yes. So as we mentioned, right, after the price reduction, there has been significant growth that we have seen, right? We mentioned earlier on this call that more than 30% growth in Q4 on a year-on-year basis. So obviously, there has been good growth that we have seen in the state. Along with that, we've also stated that our market share has actually increased since this price reduction, right? So there has been an inherent benefit that we've received from this decision. And we've increased the market share pretty decently as a part of the overall IMFL industry as such.
And on the Telangana front, madam, since September onwards, thankfully, we have been receiving payments from Telangana government more or less on time. And there was a sort of a blackout period for us in May and July, August. That payment also has started coming in. So overall, I would say that there are positive signs from the Telangana side.
The next question is from the line of Jagvir Singh from Shade Capital.
My question is related to the update on...
So the update is as follows. I think the counterparty in February, there was an order which was also allowing another body corporate to use the Mansion House trademark in a particular state of West Bengal. So we preferred an appeal against that order before the division bench. And as of now, the status quo is maintained because the other body corporate, they have given an undertaking to the court that they will refrain from using the February 7 order till the next date when the appeal will be heard. So as on date, the status quo is maintained. I wouldn't, of course, the matter being subjudice get into more specific details at this point. But just 2 things I would like to add is that we have been the exclusive and uninterrupted users of this mark since 1983 and continue to remain so.
How if you are using... [Technical difficulty] So is there -- because we are using this brand since 1983, so what is the history? How one company can go and claim to use this brand in the West Bengal or any other state?
So those specifics, I would not like to get into beyond what I have already commented earlier since this matter remains sub judice, I think we have made our position clear.
Okay, sir. And sir, any guidance for EBITDA margin and revenue growth for the next financial year FY '26...
So EBITDA margins will be in the range of 15.5% to 17% for FY '26.
Adjusted to subsidies?
And revenue guidance will be in the upper teens.
Okay. So this EBITDA guidance is adjusted to the subsidies?
Adjusted for subsidy income.
The next question is from the line of Yashwardhan from Tiger Assets. The next question is from the line of Daksh Malhotra from Eva Global.
Congratulations on the good set of numbers. I wanted to take your view on the U.K. FDA agreement and how will it impact our luxury portfolio, which we are planning to grow in the near future? That is question one. And question two, just wanted to get a sense on how are we planning -- are we planning to increase our stake in SSL, the Samsara Sara from 20% in the near future?
Yes. On the first part regarding the U.K. FDA, see, from an existing business perspective, it doesn't impact us much for the simple reason that we are a predominantly brandy player and brandy does not get impacted significantly by the U.K. FDA. With regards to the super premium luxury business that we have guided towards even with a whiskey launch, to be very frank, see, I think there is a very clear positioning that Indian brands have created for themselves, right, whether it is the Indian single malts or the Indian malts that are coming in. So we frankly don't see a significant impact on the industry as such. But time will tell, and we don't want to guide towards anything on that front.
Having said that, we do see tremendous and promising opportunities from an Indian luxury play over here. With regards to Aman Spirits Lab, the intent obviously is to increase our stake, right? It is a strategic investment for us. We -- by the end of the committed investment would be owning around 20.02% in the company. And very soon, we'll be looking at increasing that stake further pretty significantly. And the end game, obviously, is to have majority in the company and to acquire the company at some point in time, but at the right time.
The next question is from the line of Dhaval Jain from Sequent Investments.
[Technical difficulty] I just wanted to understand what exactly -- how do we aim to go about our advertisement expenses going forward? And is it like a cap to the percentage of sales or a more broader understanding on this front?
So I can give a broad outlook on that. Brandy as a category, we believe, has been underinvested in terms of brand building and marketing. So we have now started investing behind the category. I think one was, of course, with the introduction of Flandy, we did something to reinvigorate the category. And for the first time, I think we'll also be using a celebrity. We have signed on a celebrity. And our teaser campaign has just been rolled out today as we speak. So there will certainly be more activity on this front in terms of investment behind the brandy category.
And in terms of quantifying your question was also in terms of how do we see this, right, in terms of revenue per cap. see, the thing is that Q4, we did an investment -- reinvestment rate of around 1.8% of net revenue. right? For FY '26, you will look at this at more than 2% as we try building on the entire branding narrative as well as our introduction in the super premium luxury space, right? Even that will require good amounts of investment. So you are looking at an A&SP reinvestment rate of more than 2% for the coming year. And our EBITDA guidance, EBITDA margin guidance takes that into consideration as well.
Okay. One more thing on our volume to volume growth annually. So it's around 6.7%, if I'm not wrong.
Yes, that's right.
So this, we expect it to be high mid-teens now like going forward on FY '26?
Yes, it will be high teens. So I just wanted to understand like where exactly this growth is going to come from? Is it just the southern market or is the expansion into new markets or which exactly the states you are targeting at?
Yes. So it will be significantly from the existing states itself, right? So obviously, with the whiskey -- semi-premium whiskey brand being launched in the East and Northeastern states, you will see East and Northeast growing at a decent clip. But at the same time, what we also need to look at is that the first 9 months of this financial year of the financial year that went by, you saw some subdued volume growth, right? So from that perspective, we will be regaining the share from that perspective, and that is how we'll grow at a high teens kind of a rate in volume terms. will be a combination of both southern markets as well as your East and Northeastern markets.
Right. And just one more last question on the front of our case. I understand subjudice, but when is the next hearing date on this?
That is in June, on the 9th of June.
So I understand like last time it was in April -- around April, if I'm not wrong.
Yes. So the hearings have been taking place, right? But it is status quo, as Mr. Danukar mentioned earlier.
The next question is from the line of Aditya Singh from Multiagaocks.
Congratulations on the great set of numbers. I only had one question. And my question was regarding the tax. So I just heard that there would be no tax impact for the June quarter. So can we expect it from the next quarter?
No. So as I said, if you see our carryforward losses are around INR 32 crores as of March 31, 2024. But we have contracted against the assessment order of the income tax and the appeal is now pending at Commissioner income tax level. So once that appeal is heard and we are able to know that what exactly has been the additions to our assessed income, then only we will be able to exactly give you the guidance since when we can expect the tax. We have just said that for the current quarter, since we are not expecting any judgment in this quarter, you may assume no tax and exact from when tax will be required to be paid, perhaps by next quarter, we will have a better position to answer.
[Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.
Thank you, everyone, for being a part of today's call and showing interest in our progress. I also invite all of you all to check out our brand handles on social media, Instagram, Facebook and YouTube, where the campaign featuring the brand extension mentions packaged drinking water, a campaign featuring one of South India's biggest superstars, NB Balakrishnan would have gone live this morning. I also hope that in the call, we have been able to address your queries. In case you have any pending queries, I request you to reach us at the coordinates mentioned in the presentation. Thank you very much for your time and for supporting us on our growth journey. Thank you.
Thank you. On behalf of Tilaknagar Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.