Mansion House maker to expand into premium brandy and whiskey, chairman says

Tilaknagar Industries Ltd, maker of Mansion House brand spirits, will expand into premium brandies, followed by other categories such as whiskey, over the next 18-24 months, as consumption of expensive alcoholic drinks targeted at affluent consumers continues to outpace that of the mass market consumption.

Amit Dahanukar, chairman and managing director, said the Mumbai-based company plans “tiered pricing” where the brandy will be offered at multiple price points to make inroads in Karnataka, Kabul and other states. Popular markets such as Larnaca, Puducherry, Andhra Pradesh and Telangana. Mint in an interview. Together, these states account for 50-60% of its brandy sales. This category accounts for 85% of the company’s revenue.

“We will look at expanding the premium and luxury segments as the regular segment is always under pressure due to investments,” he said. “There’s also pressure from a lot of states that regulate prices… We’ll be willing to acquire more businesses when something compelling comes along.”

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Icra Ltd said it expects revenue from Indian alcoholic beverage companies to grow 8-10% in fiscal 2025 on the back of stable beer demand, resurgent spirits consumption and increasing consumer preference for premium products. Once the pandemic recedes, the focus will shift to premium spirits.

Icra also expects price hikes approved by some state governments this fiscal to support growth. In the first quarter of fiscal 2025, the industry’s revenue increased by 9% year-on-year, and sales volume increased by 2-4%.

Tilaknagar Industries’ Ebitda is approx. $200 crore in FY24 and aims to double by FY27, with expected growth of 25% annually. Ebitda is a measure of profitability and is earnings before interest, taxes, depreciation and amortization.

“I believe we can grow sales by 12-15%,” Dahanukar said. “Expansion and profitability will depend on premiumization and we will have operating leverage.”

“For at least the next two years we will see our portfolio grow in a similar way, including launching into higher and lower price points in this (brandy) category. But we are open to opportunities, Because the company now has no debt.”

At its peak in March 2019, the company had debt of approximately $Dahanuka said Rs 1,200 crore. “We have restructured our brand. We have received some interest waivers and raised concerns about $350 crore equity in different rounds in FY21 and FY22. It is also used for working capital and restructuring. “

whiskey push

In October, the distillery launched a whiskey in Assam. “For now, this is a targeted investment in selected states, but we will see the response and then decide to expand further,” he said. “But in order to target the northern market, we need a complete product portfolio, including whiskey and so on.”

In the 1980s, the company transformed from a sugar mill to a spirits producer with the launch of Mansion House brandy. The rest of the business comes from rum, with a small contribution from whiskey.

“Our Mansion House whiskey is in the most competitive category, but it is also the fastest growing and largest whiskey in India,” Dahanuka said. “It’s very competitive and growing at a compound annual growth rate of 15%. We do have some capital now to fulfill that long-term desire for whiskey.”

Despite national and local elections held in some states this year, the company reported sales growth of 3-4% in the first half through September. Andhra Pradesh accounts for about 30% of Tilaknagar Industries’ sales. Retailers are not allowed to buy more inventory than usual as states go to polls to prevent any leaks in the system.

Profitable

The company reported net income of $Revenue from operations in the quarter ended June was Rs 40 crore $664 crore, according to its filings with the BSE. During the same period in fiscal 2024, the company reported $257 million profit and operating income of Rs. $6.4 billion rupees. “We expect strong growth in the second half of the year. We will end the year with double-digit growth.”

Tilak Nagar Industries Investment $In March 2023, the company acquired a 10% stake in Spaceman Spirits Labs, maker of craft gin Samsara, for Rs 975 crore. In September this year, the company increased its stake with a follow-on investment $130 million rupees, with a shareholding ratio of more than 20%.

“Craft gin is an emerging category but it’s a crowded space. So we decided to invest in the company rather than invest in the brand organically,” Dahanuka said. The company will now also distribute Spaceman’s products in the southern Indian market and use its own marketing and distribution network as royalties. Nearly 70% of Samsara’s product portfolio is pink gin.

Tilaknagar also acquired 36.17% stake $Goa-based Bartisans is a premium non-alcoholic mixology brand worth £80 million.