- Expansion plans in East and North-East markets
- TI leverages Samsara brand equity, soon to launch range of luxury products
Leading Indian-Made Foreign Liquor (IMFL) manufacturer, Tilaknagar Industries Limited (TI) has reported a profit after tax excluding exceptional items (PAT) of ₹58.2 crore, implying a growth of 82.4% over the ₹31.9 crore PAT reported in the corresponding quarter last year. The earnings before interest, tax, depreciation and amortisation (EBITDA) at ₹66 crore grew 39% over the ₹47.4 crore EBITDA reported in Q2 of the previous year.
Significantly, the company’s EBITDA margin expanded 422 basis points year-on-year (YoY) to 17.6%. Adjusted for the subsidy income, EBITDA came in at ₹56 crore, at a margin of 15.3%, showing 188 basis points expansion YoY. This growth in profitability was witnessed despite muted growth in net revenue from operations, at 5.8%, to ₹374.9 crore due to a temporary slow-down in growth, caused by policy transition in one of company’s key markets, Andhra Pradesh, which has recently opened liquor retail to private parties in the state.
Amit Dahanukar, Chairman and Managing Director, Tilaknagar Industries said, “With retail going private in Andhra Pradesh mid-October onwards, we expect to continue with our industry-beating growth trajectory, achieved through a combination of doubling down on our market share gains from our brandy portfolio as well as our new product launches across categories.”
The company that has a strong foothold in key markets of South India, as well as certain markets in East India, recently launched Mansion House Gold Barrel Whisky in Assam. With this launch, the company plans to further expand into the East and the North-East markets where whisky enjoys an 80% share of IMFL market in the East and North-East markets.
TI’s flagship brand Mansion House Brandy is India’s highest selling brandy and the eighth-largest selling spirits brand across categories, while its second millionaire brand, Courrier Napoleon Brandy has emerged as the third-fastest growing spirits brand globally. The company plans to creatively invest in advertising and sales promotion to provide a meaningful share of voice to the brandy category in the overall IMFL market.
During the quarter under reference the company become net debt free, nearly six months ahead of its original target date for achieving the net debt-free status. “From a peak debt more than ₹1,100 crore in March 2019, to achieving the net debt free status, we have come a long way. This transformation was achieved through a combination a financial prudence and achieving industry-beating profitable growth,” Dahanukar added.
The company attributes the growth in profitability to superior brand-mix as well as effective cost-optimisation initiatives. With the worst of the inflationary cycle over, the company anticipates further growth in profitability in the upcoming quarters.
Recently, the company moved to increase its investment in Spaceman Spirits Lab Pvt. Ltd. (SSL), maker of Samsara Gin and Sitara Rum, to 20% from the earlier 10%. TI will leverage the Samsara brand equity to showcase a robust luxury portfolio, along with its soon-to-be launched range of luxury products.
