Tilaknagar Industries Shares Zoom 13% After Release of Q2 FY25 Results

Tilaknagar Industries Limited (TI), renowned for producing Mansion House Brandy—India’s largest and the world’s second-largest-selling brandy—has reported its financial results for the quarter ending September 30, 2024.

Q2 FY25 Performance Overview

In Q2 FY25, TI saw a 5.8% growth in net revenue from operations, which rose to ₹374.9 crore, compared to ₹354.4 crore in Q2 FY24. The slower growth was attributed to the transition to a new policy in one of the company’s key states. EBITDA for the quarter improved significantly by 39.1%, reaching ₹66.0 crore, up from ₹47.4 crore in the same period last year. After adjusting for subsidy income, the adjusted EBITDA stood at ₹55.6 crore. The EBITDA margin expanded by 422 basis points, from 13.4% in Q2 FY24 to 17.6% in Q2 FY25.

PAT (Profit After Tax), excluding exceptional items, saw an impressive increase of 82.4%, rising to ₹58.2 crore from ₹31.9 crore. The reported diluted earnings per share (EPS) stood at ₹2.99. Volumes grew by 3.1%, reaching 2.94 million cases, while the net sales realization (NSR) per case expanded by 0.2% to ₹1,274.

H1 FY25 Performance Overview

For the first half of FY25, TI reported a 4.5% increase in net revenue from operations, which grew to ₹687.9 crore, compared to ₹ 658.5 crore in H1 FY24. EBITDA for H1 FY25 showed a growth of 35.3%, reaching ₹116.1 crore, up from ₹85.8 crore in H1 FY24. After adjusting for the subsidy income, the adjusted EBITDA stood at ₹100.2 crore. The EBITDA margin improved by 385 basis points to 16.9%, compared to 13.0% in H1 FY24.

PAT, excluding exceptional items, increased by 70.5%, rising to ₹98.3 crore from ₹57.7 crore in H1 FY24. Reported diluted EPS for the period was ₹5.05. Volumes grew by 2.0%, totalling 5.47 million cases, while the NSR per case expanded by 0.2% to ₹1,264.

Other Developments

As of September 2024, Tilaknagar Industries reported being net debt-free, with a net cash position of ₹25 crore. The company also launched Mansion House Whisky in Assam within the semi-premium segment. Additionally, TI made follow-up investments in Spaceman Spirits Lab Pvt. Ltd., the makers of ‘Samsara Gin’ and ‘Sitara Rum.’ The company also invested in Round the Cocktails Pvt. Ltd., which produces ‘Bartisans,’ a brand of ready-to-pour cocktail mixers made with all-natural ingredients.

Commenting on the performance, Mr Amit Dahanukar, Chairman & Managing Director, said “I am happy to share that we have turned net debt free as of September 2024. From a peak debt of more than ₹1,100 crore in March 2019 to achieving net debt-free status, we have come a long way. This transformation was achieved through a combination of financial prudence and achieving industry-beating profitable growth. From a Q2 business perspective, we have delivered our highest-ever EBITDA at ₹66 crore. Our margins expanded on the back of a superior brand mix as well as cost optimization initiatives.”

He further added, “All this despite subdued volume growth on account of transitioning of RTM in our key state of Andhra Pradesh (“AP”) in Q2. With retail going private in AP from 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 new product launches across categories. The worst of the inflationary cycle seems behind us, and we expect to grow our profitability despite increasing investments in A&SP, providing meaningful ‘Share of Voice’ to brandy as a category.”

On November 05, 2024, Tilaknagar Industries shares opened at ₹310.25 and touched the day high of ₹331.75 at 10:15 AM.

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