In the morning trading session of Tuesday, the shares of the third largest spirits company in India, in terms of annual sales volumes between FY14 and FY24, surged 1.5 percent to Rs. 354.95 on BSE.
With a market capitalisation of Rs. 9,787 crores, the shares of Allied Blenders and Distillers Limited opened in the green at Rs. 351.9, up by nearly 0.7 percent, as against its previous closing price of Rs. 349.65.
Company Guidance:
Allied Blenders & Distillers Limited (ABDL) is aiming for double-digit revenue growth in FY25 after settling all its debts, which were cleared using proceeds from the initial public offering (IPO).
Managing Director Alok Gupta highlighted that the company currently holds only working capital with no outstanding debt. He also mentioned in an interview with NDTV Profit that they expect a nearly 50 percent reduction in interest costs, which will increase available cash to fuel growth.
Also Read: NBFC stock to buy now for an upside of 30%; Are you holding it?
Primarily known for its whisky production, ABDL launched its first premium gin in January, and is now preparing to introduce several premium alcohol brands as part of its growth strategy.
The Managing Director noted that there is considerable activity in the market, stating that the outlook for this segment indicates that achieving a double-digit market share within the next three to five years would place the company in a favourable position.
ABDL introduced Zoya premium gin in Haryana in January, and it is set to launch in approximately 10 markets. According to the Managing Director, the company also plans to launch luxury vodka, malted scotch, and a premium dark rum in the near future.
With the festive season approaching and the company’s entry into the premium segment, the Managing Director indicated that the second half of FY25 appears more promising compared to the first half, which he described as “choppy” for the business.
Regarding the new liquor policy in Andhra Pradesh, Gupta noted that the changes are expected to enhance ABDL’s performance. He expressed optimism that with the introduction of private retail, the company could return to its previous sales level of 4 million cases, if not exceed it.
The company is committed to achieving volume growth that outpaces the industry. In the whisky segment, ABDL aims to enhance market share through its 4 millionaire brands while maintaining profitable growth in the Officers Choice brand.
To improve profitability, ABDL will focus on optimising its state brand mix and continuing cost-saving measures in input costs, while enhancing process efficiencies and advancing automation.
Additionally, the company will work on optimising its working capital cycle by streamlining supply chain efficiencies.
Previous News:
On 22nd August, Allied Blenders and Distillers Limited, known for producing Officer’s Choice whiskey, announced a strategic partnership with Lexplosion Solutions to deploy Komrisk, an advanced regulatory compliance management software.
This collaboration aims to strengthen ABDL’s compliance framework, ensuring consistent and robust regulatory adherence across its expansive national footprint.
By utilising Komrisk, ABDL is set to enhance its operational excellence, reinforcing its dedication to integrity and leadership in the industry.
The deployment of Komrisk is anticipated to provide ABDL with a competitive advantage by improving operational efficiencies throughout the organization. This includes centralised compliance management for all facilities, such as bottling units, the ENA distillery, regional offices, and various regulatory domains, along with real-time updates and alerts.
Additionally, ABDL will be able to streamline workflows related to compliance tasks, thus improving the efficiency and effectiveness of managing statutory regulatory requirements.
Financials:
The company experienced a marginal decrease in its consolidated revenue from operations, reporting a year-on-year decline of 6.8 percent, from Rs. 814 crores in Q1 FY24 to Rs. 758 crores in Q1 FY25.
This drop in operating revenue was primarily due to delayed receivables from a key market since H2 FY24, which has also impacted the industry overall. This situation continued to affect the company’s overall servicing needs and short-term volume growth in Q1 FY25.
The net profit increased from a loss of Rs. 3 crores to a profit of Rs. 11 crores, during the same period.
On a year-over-year basis, EBITDA rose from Rs. 53 crores in Q1 FY24 to Rs. 76 crores in Q1 FY25, registering a growth of 44 percent.
This strong EBITDA growth was fueled by a significant improvement in gross margins, which improved from 34.5 percent in Q1 FY24 to 38.7 percent in Q1 FY25.
Additionally, the growth was supported by cost-saving initiatives related to packaging materials implemented in FY24, despite higher input costs, particularly for ENA, and a strong focus on state brand mix.
Shareholding Pattern:
As per the July 2024 shareholding pattern, the Promoters hold a 80.91 percent stake in the company, Foreign Institutional Investors (FII) hold a 3.83 percent stake, while Retail Investors and Domestic Institutional Investors (DII) hold an 11.73 percent and 3.52 percent stake in ABDL, respectively.
Stock Performance:
Allied Blenders and Distillers Ltd. was listed on the stock exchanges on July 1, 2024, following its initial public offering (IPO) that took place from June 25 to June 27, 2024, with a total issue size of Rs. 1,500 crores.
The IPO consisted of a fresh issue of nearly 3.56 crore shares valued at Rs. 1,000 crore and an offer for sale (OFS) of around 1.78 crore shares worth Rs. 500 crore.
Since the date of the listing, the stock has delivered nearly 10 percent of positive returns, as well as about 6.7 percent returns in the last one month.
Also Read: Solar stock jumps 3% after receiving order from Coal India for power plant
About the Company
Incorporated in 2008, Allied Blenders and Distillers Limited is an Indian-made foreign liquor company engaged in the business of manufacture, purchase and sale of alcoholic beverages/liquids in four categories: whisky, brandy, rum, and vodka.
Written by Shivani Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
