Tilaknagar Industries Ltd – Investor Presentation Summary

Key Operational Highlights

  • Q2 FY27 Imperial Blue volumes: 5.5 million cases (1.5% QoQ growth)
  • Q2 FY27 Ex-Imperial Blue volumes: 3.4 million cases (0.5% YoY decline, 2.0% QoQ growth)
  • H1 FY27 Imperial Blue volumes: 10.9 million cases
  • H1 FY27 Ex-Imperial Blue volumes: 6.7 million cases (1.6% YoY growth)
  • Secondary volume growth: Imperial Blue +8.5% QoQ, Existing business +6.7% QoQ
  • Imperial Blue gained 100+ bps pan-India market share in Q2 FY27
  • Mansion House Reserve Brandy achieved 25%+ QoQ volume growth with 50% YoY growth in September 2026
  • Mansion House Brandy emerged as #1 in Karnataka in September 2026

Key drivers of operational performance: Market share gains in Karnataka, Andhra Pradesh, Uttarakhand, Assam and Rajasthan; successful stabilization of TSMA transitions; strong brand performance in existing markets.

Financial Highlights

  • Revenue: ₹1,035 crore in Q2 FY27 (172.8% YoY growth)
  • EBITDA: ₹146 crore in Q2 FY27 (adjusted for subsidy)
  • PAT: ₹66 crore in Q2 FY27 (adjusted for exceptional items and amortization)
  • EPS: Reported diluted EPS of ₹0.89 in Q2 FY27
  • Margins: Gross Profit Margin 41.8%, EBITDA Margin 14.1%, PAT Margin 6.4% in Q2 FY27
  • YoY comparison: Revenue growth 172.8%, EBITDA growth 145.8%, PAT decline 57.7%
  • QoQ comparison: Revenue decline 1.0%, EBITDA decline 12.4%, PAT decline 29.5%

Drivers of financial performance: Continued inflationary pressures across packaging inputs (particularly glass) and ENA prices; favorable state-mix impact; cost optimization initiatives offsetting some inflationary pressure.

Key Risks: Ongoing geopolitical tensions causing inflationary pressures; rising fuel and grain costs impacting ENA prices; packaging material cost increases.

Balance Sheet Snapshot

  • Net Debt: ₹2,074 crore as of September 2026 (increased from ₹1,911 crore in March 2026)
  • Equity: ₹3,018 crore as of September 2026
  • Total Assets: ₹6,263 crore as of September 2026
  • Intangible Assets: ₹3,203 crore as of September 2026
  • Cash & Cash Equivalents: ₹72 crore as of September 2026
  • Trade Receivables: ₹1,555 crore as of September 2026

Financial Health Insights: Net debt increase due to complete working capital-cycle investment; target net debt for March 2027 below March 2026 levels.

Capex & Cash Flow Health

  • Capital Expenditure: Not specified
  • Free Cash Flow: Not specified
  • Operating Cash Flow: Net cash from operating activities (₹4) crore in H1 FY27
  • Net Debt Movement: Increased from ₹1,911 crore (March 2026) to ₹2,074 crore (September 2026)

Investment Rationale: Strategic investments in premium portfolio expansion; cost optimization initiatives; market share growth.

Strategic & R&D Initiatives

  • Investments in Innovation: ₹22 crore strategic investment in Bodega tequila (30% stake acquired)
  • Premium portfolio expansion: Seven Islands Pure Malt Whisky, Monarch Legacy Edition Brandy, Samsara Contemporary Indian Gin, Samsara Pink Gin
  • Geographic expansion: Entry into Assam following West Bengal expansion

Expected impact on growth: Luxury and super-premium portfolio expansion across key markets; leveraging Imperial Blue's distribution network for new product introductions.

Strategic Rationale: Building a stronger, more diversified and increasingly premium-focused spirits company; addressing white space in high-growth tequila category.

Industry Trends & Business Environment

  • Macro/Industry Trends: Karnataka excise policy reforms benefiting P&A category; early signals of reform in Tamil Nadu (largest Brandy market in India); India's tequila market grew at ~60% CAGR between 2020 and 2025
  • Impact on Company: Policy reforms driving growth in key markets; inflationary pressures from geopolitical tensions affecting input costs

Management Commentary & Growth Outlook

  • Strategic Outlook: Focus on delivering profitable growth in Imperial Blue and Mansion House with clear vision on long-term value creation
  • FY Guidance: Target net debt for March 2027 below March 2026 levels; cost savings expected to result in 250-400 bps margin expansion on acquired business
  • Market Share Targets: Continued market share gains across key states
  • Risks and Opportunities: Ongoing inflationary environment; working on supply chain efficiencies and innovations to manage rising input costs; confident of mitigating inflationary pressures over short to medium term

Integration Update

  • >90% Imperial Blue volumes under TI operations (balance under TSMA)
  • 1 state remains under TSMA (maximum Q4 FY27 exit)
  • Average monthly TSMA expenses: ~₹2.6 crore in Q2 FY27
  • 40+ units post TSMA exit for steady state business
  • Big 4 advisor engaged for integration consultant

Cost Optimization Initiatives

  • Employee Cost: Existing team set-up in South India with efficient cost structures
  • Packaging: Non-disruptive initiatives for changes in packaging to reduce costs
  • Customs: Reduction in custom under India-UK FTA from 150% to 75% for scotch import
  • Bottling Charges: Entering new arrangement with bottlers
  • General, IT & Admin Overheads: Leaner cost structures