Synopsis:
Tilaknagar Industries has transformed into a leading Alcobev player, posting robust growth with Q1FY26 revenue up 30.7 percent YoY and PBT more than doubling. The landmark Imperial Blue acquisition and capacity expansion signal a strategic shift towards pan-India presence and diversification, though rising debt and regulatory pressures remain key risks.
The Indian alcoholic beverages industry has been undergoing a transformation, driven by rapid premiumization, favorable demographics, and evolving consumer preferences. Rising disposable incomes, urban lifestyle changes, and an increasing shift toward premium spirits have positioned the industry for sustained growth. Brandy and whisky, in particular, have seen strong traction, supported by regional preferences and expanding distribution networks.
Tilaknagar Industries Ltd, with a market capitalization of Rs. 9,583 crore, is a prominent player in this space. The stock is currently trading at Rs. 494 and has delivered a return of 101.9 percent over the past six months, reflecting strong investor confidence.
Company Background and Business Model
Founded in 1933 as The Maharashtra Sugar Mills Ltd by Mahadev L. Dahanukar, the company pivoted in the 1970s to focus on alcohol production. Today, Tilaknagar is best known as the maker of India’s highest-selling premium brandy, Mansion House Brandy. The company owns a portfolio of over 15 brands spanning brandy, whisky, gin, rum, and vodka, with particular strength in the ‘prestige and above’ categories.
Operations are spread across 21 manufacturing units in 10 states, of which 4 are owned and 17 are contract manufacturing facilities. The company follows an asset-light model, with nearly 70 percent of production routed through contract units. The flagship facility at Srirampur, Ahmednagar district, houses both a 100 KLPD grain-based distillery (currently non-operational) and a 50 KLPD molasses-based distillery.
Segment Mix and Geographic Footprint
Brandy dominates the company’s portfolio, accounting for 91 percent of volumes in FY25, with sales of 10.82 million cases. This concentration has historically tied Tilaknagar’s fortunes to the southern Indian markets, which contributed nearly 86 percent of total sales in FY25. The company is also active in institutional channels such as CSD and PMF and exports to Africa, the Middle East, Southeast Asia, and Europe.
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Q1FY26 Performance
The company reported its highest-ever first quarter volumes since FY15, with sales reaching 32.1 lakh cases, up 26.5 percent year-on-year compared to 25.4 lakh cases in Q1FY25. Despite robust growth, the net sales realization (NSR) per case declined 1 percent quarter-on-quarter and 5.3 percent year-on-year, primarily due to price reductions in Andhra Pradesh.
On the financial front, revenue stood at Rs. 409 crore in Q1FY26, compared to Rs. 406 crore in Q4FY25, a sequential growth of 0.7 percent. Profit before tax rose from Rs. 77 crore to Rs. 89 crore, an increase of 15.6 percent QoQ. Net profit also expanded 15.6 percent QoQ to Rs. 89 crore.
On a year-on-year basis, revenue rose sharply by 30.7 percent from Rs. 313 crore, while profit before tax more than doubled, rising 122.5 percent from Rs. 40 crore. Net profit climbed 15.6 percent YoY from Rs. 77 crore.
Imperial Blue Acquisition – A Game Changer
A landmark move was announced with the acquisition of Imperial Blue from Pernod Ricard, valued at approximately EUR 413 million (Rs. 4,150 crore), making it the largest transaction in the Indian alcoholic beverage industry by an Indian company.
The deal, which includes normalized working capital of EUR 70 million and deferred consideration of EUR 28 million payable in FY30, will bring into Tilaknagar’s fold a business with over 22 million cases sold annually and revenue exceeding Rs. 3,000 crore as of LTM March 2025.
The acquisition perimeter covers 16 units, including 2 owned facilities, along with a trademark and supply arrangement with Pernod Ricard India and a long-term concentrate and bulk alcohol supply agreement with Chivas Brothers.
Post-acquisition, Tilaknagar is expected to triple its scale, reduce dependence on brandy, and emerge as a pan-India IMFL player with a much stronger presence in the whisky category.
Expansion and Capacity Plans
In addition to the Imperial Blue acquisition, the company is strengthening its manufacturing base. The Prag Distillery bottling unit in Andhra Pradesh is being expanded from a capacity of 6 lakh cases annually to 36 lakh cases, with an investment of Rs. 59 crore. This move is designed to meet rising demand in one of India’s fastest-growing IMFL markets and further safeguard supply security.
Financial Position and Balance Sheet
The company achieved a net-debt-free status in September 2024, well ahead of schedule. As of Q1FY26, Tilaknagar reported gross debt of Rs. 39.1 crore and a net cash position of Rs. 163.4 crore, underlining its improved financial health. However, the Imperial Blue acquisition will necessitate significant borrowing, which could alter the company’s leverage profile and weigh on its financial risk metrics in the medium term.
Distribution Strength
Tilaknagar has built an extensive distribution network covering nearly 40,000 outlets across India. Sales are routed primarily through state corporations, direct sales, and distributors, ensuring strong access in key regions. The company’s presence in international markets adds further diversification.
Written By Manan Gangwar
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