Tilaknagar Industries Limited conducted its Q2 FY27 earnings conference call on October 31, 2026, chaired by Chairman and Managing Director Mr. Amit Dahanukar and Chief Strategy Officer Mr. Ameya Deshpande.

Financial Performance Highlights

  • Net revenue grew 173% year-on-year to Rs. 1,035 crore in Q2 FY27 (adjusted for subsidy: Rs. 1,033 crore, 172% growth)
  • Gross profit adjusted for subsidy stood at Rs. 432 crore with margin of 41.8% compared to 42.1% in Q1 FY27
  • EBITDA stood at Rs. 148 crore (14.3% margin), growing 146% YoY (adjusted for subsidy: Rs. 146 crore, 14.1% margin)
  • PAT adjusted for exceptional items and acquisition-related amortization reached Rs. 68 crore (6.6% margin), growing 30% YoY (adjusted for subsidy: Rs. 66 crore, 6.4% margin)
  • Exceptional expense of Rs. 11 crore incurred during Q2 FY27 predominantly for TSMA fees and integration expenses
  • Gross debt stood at Rs. 2,202 crore and net debt at Rs. 2,074 crore as of September 30, 2026
  • Net Sales Realization (NSR) moderated by 0.75% to Rs. 1,174 per case from Rs. 1,183 in Q1 FY27

Operational and Brand Performance

  • Imperial Blue Whisky registered 8.5% secondary volume growth QoQ in Q2 FY27, gaining 100 bps market share
  • Mansion House Brandy registered 7.1% secondary volume growth QoQ, gaining 70 bps market share in Prestige & Above segment
  • Overall volumes increased 160% YoY and 2% QoQ
  • Imperial Blue achieved 40% market share in Karnataka with 900 bps increase QoQ
  • Mansion House Brandy became highest selling brandy in Karnataka in September 2026
  • Company launched Imperial Blue in Kerala during October 2026 with planned launch in Tamil Nadu
  • Imperial Black launched in Uttar Pradesh and Meghalaya during the quarter

Strategic Initiatives and Investments

  • Strategic investment of Rs. 22 crore for 30% stake in Black Tiger Distilleries (makers of Bodega Suprema No. 5 Tequila)
  • Rs. 6 crore already invested with additional Rs. 16 crore to be invested over next 12 months
  • Partnership with Mexico-based PFA tequila manufacturer and Mansha Group (Indian Alcobev distributor)
  • Bodega Tequila currently available in Maharashtra, Karnataka, Goa, and Delhi
  • Expanded luxury brands (Monarch Legacy Edition Brandy, Seven Islands Pure Malt Whisky, Samsara Gin) in Assam

Market Developments and Regulatory Environment

  • Karnataka excise policy reforms benefited Imperial Blue Whisky and Mansion House Brandy
  • Early signals of reform in Tamil Nadu - Mansion House Reserve Brandy saw 25% QoQ volume growth and 50% YoY growth in September 2026
  • Company peaked at 3 million cases of Prestige & Above brandy in Tamil Nadu historically (currently below 0.5 million cases)

Cost and Inflationary Pressures

  • Geopolitical tensions caused inflationary pressures in packaging inputs, particularly glass
  • ENA prices showing inflationary trend with rising fuel and grain costs
  • Impact of inflationary pressures estimated at 2.5% on margins (approximately Rs. 25 crore quarterly impact in Q1 and Q2)
  • Subsidy income reduced to Rs. 2 crore in Q2 from Rs. 20 crore in Q1

Guidance and Outlook

  • Maintain FY27 volume growth guidance: high single-digit to low double-digit for combined business
  • Beyond FY27: mid-teens volume growth and mid-to-high teens revenue growth over next couple of years
  • Target consolidated EBITDA margins of 16%-18% for combined business by FY29
  • Target Net Debt-to-EBITDA ratio below 1.0x by March 2029
  • Expect margin expansion in H2 FY27 compared to H1 FY26 through operating leverage and state mix changes

Integration Update

  • States transitioned out of TSMA under TI operations have been stabilized
  • Last remaining state to be transitioned towards end of FY27
  • Exceptional costs related to transition significantly reduced in Q2 FY27 and expected to continue at similar levels (Rs. 10-11 crore) over next two quarters

Other Business Updates

  • Samsara Gin grew 50% in H1 FY27 compared to previous year
  • SSL business skewed towards H2 (65% of yearly business) compared to H1 (35%)
  • Company working with industry bodies and government authorities on UK FTA matter
  • Annualized net working capital days at approximately 65 days including Telangana overdues of Rs. 550 crore

Management Focus Areas

1. Generate and fulfil demand for brands to deliver double-digit volume growth over 2-3 year period

2. Optimize packaging, processes and supply chain to achieve 16%-18% EBITDA margin

3. Focus on efficient capital deployment and disciplined debt management

4. Expand TI's luxury and premium portfolio using Imperial Blue and Mansion House distribution strength