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Tilaknagar Industries Ltd, the maker of Mansion House branded spirits, will expand into premium brandy over the next 18-24 months, followed by other categories like whisky, as costlier alcoholic beverages targeted at affluent consumers continue to outpace mass-market consumption. The Mumbai-based company plans to “price ladder” or offer its brandy at multiple price points, tapping into popular markets including Karnataka, Kerala, Puducherry, Andhra Pradesh, and Telangana, chairperson and managing director Amit Dahanukar told Mint in an interview. Together, these states make up 50-60% of its brandy sales.
The category contributes 85% to the company’s topline. Also read | From Dubai to Tokyo: Indian spirits soar as single malts tickle global palates “We would look at expanding the premium and luxury segments because the regular segments are always under pressure due to investments,” he said. “There is also pressure from many states where prices are regulated .
.. When something compelling comes along, we would be open to acquiring more businesses.
” On expansion mode India’s alcoholic beverages companies are estimated to see their revenue expand 8-10% in FY25, led by steady demand for beer and a revival in consumption of spirits, along with increasing consumer preference for premium products, according to Icra Ltd. Many companies turned their focus towards premium spirits after the pandemic ebbed. Icra also expects the growth to be supported by the price hikes granted by a few state governments in the current fiscal.
In Q1 FY25, the industry’s revenue rose 9% over a year earlier, while volumes grew 2-4%. Tilaknagar Industries, which reported an Ebitda of about ₹ 200 crore in FY24, targets to double it by FY27, growing at an estimated rate of 25% every year. Ebitda, a measure of profitability, is earnings before interest, tax, depreciation and amortization.
“I am confident that we will be able to grow the volumes by 12-15%,” Dahanukar said. “The expansion and profitability will be on premiumization and we will have operating leverage.” Also read | Beer to cost more, premium liquor may get cheaper in Karnataka: Reports "At least for the next two years we will see our portfolio growing on similar lines, including introductions at both higher and lower price points in this (brandy) category.
But we are open to opportunities as the company is now debt-free.” At its peak in March 2019, the company had a debt of about ₹ 1,200 crore, Dahanukar said. “We restructured our brands.
We received some interest waivers and raised about ₹ 350 crore in equity in different rounds as well in FY21 and FY22. It was also used as working capital and restructuring." Whisky push In October, the distiller launched a whisky in the state of Assam.
“Right now, it's a targeted investment in a select state but we will see the response and then decide to scale it further,” he said. “But in order to target the north of the market, we will need a complete portfolio with whisky, etc.” The company switched from being a sugar mill to making spirits in the 1980s with the launch of its Mansion House brandy.
The rest of the business comes from rum, and a small fraction is contributed by whisky. Also read | Aristocrat maker plans to raise ₹ 300 cr for new single malt, brandy and more “Our Mansion House whisky sits in the most competitive category but it is also the fastest growing and the largest in India,” Dahanukar said. “It's ultra-competitive and growing at 15% CAGR.
We do now have some wherewithal to have long-term aspirations in whisky.” The company’s reported 3-4% volume growth in the first half ended September even though there were both national and local elections this year in some of the states. Andhra Pradesh accounts for about 30% of the sales for Tilaknagar Industries.
Across the states going to polls, retailers are not allowed to pick up more stock than usual to prevent any leakage in the system. In profit The company reported a net profit of ₹ 40 crore for the quarter ended June on a revenue from operations of ₹ 664 crore, according to its filings with the BSE. For the same period in FY24, the company reported a ₹ 25.
7 crore profit and a revenue from operations of ₹ 640 crore. “We expected H2 to grow strongly. We will end the year on a double-digit growth.
” Tilaknagar Industries invested ₹ 9.75 crore for a 10% stake in Spaceman Spirits Labs, the makers of craft gin Samsara, in March 2023. In September this year, it increased its stake by a follow-on investment of ₹ 13 crore, taking its holding to over 20%.
Also read | Festive consumption, auspicious wedding dates to keep demand for spirits strong “Craft gins are an emerging category, but it is a crowded space. So instead of organically investing in the brand, we decided to invest in this company,” Dahanukar said. The company will also now distribute the products for Spaceman in the southern Indian markets and use its own marketing and distribution network as a royalty arrangement.
Almost 70% of Samsara's portfolio is pink gin. Tilaknagar also acquired a 36.17% stake for ₹ 8 crore in Goa-based Bartisans, a premium non-alcoholic mixer brand.
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