TI - Tilaknagar Industries Ltd Share Price

In the earnings conference call for Q4 & FY25, management of Tilaknagar Industries Limited provided a positive outlook, highlighting a strong recovery in volume growth after a challenging start to the financial year. Key highlights include a volume growth of 20.1% YoY and 13.5% QoQ for Q4. Management indicated that the route-to-market changes in Andhra Pradesh have stabilized, with expectations to maintain or even better market share in this crucial IMFL state. Additionally, Karnataka saw exceptional growth due to reduced excise duties, contributing to over 25% growth YoY in H2 FY25.

The company is optimistic about its luxury and super-premium product lines, with promising initial results from the recently launched Monarch Legacy Edition Brandy. Management expects strong contributions from new products such as Samsara Gin, Sitara Rum, and Amara Vodka, alongside an upcoming super-premium whisky launch in H1 FY26.

Financially, Q4 revenues grew by 13.1%, reaching Rs. 406 crore, with EBITDA increasing 62.6% YoY to Rs. 78 crore, resulting in an EBITDA margin of 19.3%. For FY25, net revenue was Rs. 1,434 crore, and PAT excluding subsidies reached Rs. 201 crore, up from Rs. 141 crore in FY24. Looking ahead, management guides EBITDA margins in the range of 15.5% to 17% for FY26, indicating a strategic focus on premiumization.

The management also expressed confidence in future growth driven by market expansion and product diversification, particularly in southern and northeastern states. Overall, the positive momentum is expected to continue, with high mid-teen growth anticipated in volume terms for FY26.

1. Question: "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?"

Answer: Our volume growth of 20% has indeed been boosted by Andhra Pradesh, where we saw over 30% growth in Q4. However, states like Karnataka, which grew by over 25% in H2 FY25, also contributed significantly. Additionally, Tamil Nadu, Odisha, and Telangana saw positive performance, marked by overall encouraging trends across our key markets, further demonstrating our robust recovery and growth trajectory.

2. Question: "What proportion of the expanded capacity at Prag Distillery is intended for the Andhra Pradesh market?"

Answer: The expanded capacity at Prag Distillery, from 6 lakh to 36 lakh cases, is largely anticipatory of the strong growth in Andhra Pradesh, our flagship state. This expansion will not only replace existing production but also supplement it, ensuring ample supply to meet the expected increased demand, as Andhra remains a significant contributor to our sales.

3. Question: "How has the price correction impacted the Company's revenue and market share in Andhra Pradesh?"

Answer: The price correction has positively impacted our revenue, leading to over 30% growth in Andhra Pradesh in Q4. We have also seen an increase in market share, thanks to the favorable consumer response to reduced prices. We anticipate this underlying benefit to enhance both our market positioning and overall growth in the long term.

4. Question: "Any guidance for EBITDA margin and revenue growth for FY26?"

Answer: For FY26, we project EBITDA margins to range between 15.5% to 17%, adjusted for subsidy income. Our revenue growth is expected to be in the upper teens percentage-wise. This guidance reflects our strategic positioning to drive profitability while expanding our market presence.

5. Question: "What are the plans regarding increasing the stake in SSL?"

Answer: We intend to increase our stake in Spaceman Spirits Lab, where we currently hold around 20%. It's a strategic investment, and our end goal is to eventually achieve majority ownership. We are optimistic about further increasing our stake as we assess the appropriate timing in line with our growth strategy.

These responses give a clear picture of the company's current standing and future expectations as shared during the earnings call.