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Nimish Maheshwari    


Mumbai, India

I'm Nimish, Co-founder of Beat The Street. We're the ultimate financial platform with 65k investors, focusing on financial market awareness through research and analysis. Our mission is to promote financial literacy and informed investing.

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Contributor since: 2023

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TILAKNAG IND

Comments: 0 | Likes: 1 | Current Price: ₹ 236.5


Cheers to Transformation: Tilaknagar Industries Ltd's Remarkable Turnaround

Tilaknagar Industries orchestrates a striking turnaround, evolving from losses to sustained profitability, solidifying its leadership in India's premium liquor market. With a resilient financial rebound, the company's strategic innovations, including flavored brandy and product renovations, align with a forward-looking management vision aiming for net debt-free status by FY25. Tilaknagar's success marks a testament to resilience and strategic acumen in the competitive realm of IMFL.


Introduction:
From battling losses to savoring consistent profitability, Tilaknagar Industries Ltd has scripted a remarkable turnaround story in the Indian Made Foreign Liquor (IMFL) industry. Let's uncork the details of this journey, exploring the company's evolution, recent developments, and future plans.

About the Company:
- Core Business: Tilaknagar Industries is a key player in the production and distribution of IMFL.
- Expertise: Boasting over five decades of expertise in the alcoholic beverage manufacturing industry.
- Market Position: Dominant as India's leading and the world's second-largest brandy brand in the premium liquor market.
- Global Recognition: Ranked as the 11th fastest-growing spirits brand globally.
- Regional Presence: Commands an impressive 86% share of total sales in South India.

Recent Developments:
- Innovation in Branding: Pioneered the introduction of flavored brandy, targeting the younger population of India.
- Product Renovation: Successful transformation of Blue Lagoon Gin, yielding positive results in Assam and West Bengal.

Brand Portfolio:
- Offers a diverse range with 15+ brands in brandy, whisky, gin, rum, and vodka.
- Key Brands: Mansion House Brandy, Courrier Napoleon Brandy, Madiraa, Mansion House Whisky, and the recent launch - Blue Lagoon Gin.

Manufacturing Facilities:
- Operates one owned facility, three liquor subsidiaries, and collaborates with 15 strategically located leased/tie-up units across India.
- Facilities include distillation plants and an IMFL Bottling Plant in Maharashtra.

Distribution Network:
- Robust nationwide distribution network, leveraging state corporations, direct sales, and distributors.
- Exporting products to East & South-East Asia, Africa, the Middle East & Europe.
- Approximate reach to 40,000 outlets in India.

Revenue & Geographic Split FY23:
 Revenue Split:
  - Brandy: 93.15%
  - Rum: 4.97%
  - Whisky: 0.86%
  - Vodka & Gin: 1.02%

Geographic Split:
  - Domestic: 92.02%
  - Exports: 7.98%

From Setback to Comeback:
FY15 to FY20:
- Lowest Revenue: ₹114,732 Lacs.
- Highest Losses: ₹-28,786 Lacs.
- Lowest Net Worth: ₹-28,722 Lacs.

FY21 to FY23:
- Comeback Revenue: ₹247,678 Lacs.
- Comeback Profits: ₹7,215 Lacs.
- Net worth as of FY23: ₹48,292 Lacs.

Industry Outlook:
- India's liquor industry is among the fastest-growing beverage markets globally.
- IMFL expected to reach 441 million cases by 2027.
- Whisky dominates with a 66% share, followed by Brandy at 19% and Rum at 13%.

Q2FY24 Financial Highlights:
- Revenue: ₹354 Cr (Up 16.4% QOQ & 29.19% YOY).
- PAT: ₹37 Cr (Up 42.30% QOQ & 164.2% YOY).
- EBITDA: ₹144.7 Cr (Up 18.02% YOY).
- EPS: ₹1.93 (Up 44.02% QOQ & 129.7% YOY).
- OPM: 13% vs 11% last year Q2.

Quarterly volumes also touched all time high at 28.5 lacs cases in Q2 FY24.

Management Outlook:
- Financial Performance:
  - Improved EBITDA margins to 13.4% from 11.4% in Q2 FY23.
  - Secured a 4-year term loan to refinance debt, aiming for net debt-free status by FY25.
  - Reduced debt from ₹1199 in FY23 to ₹141 as of Q2 FY24.
  - Operating cash flows used to reduce debt.
- Brand Strategy:
  - "A Warm Welcome" concept gaining traction.
  - Expected launch of a premium brandy in Q3 FY24.
  - Mid-teens volume growth targeted for FY24.

Refinanced the existing debt of edelweiss ARC via taking fresh loan from Kotak and cash reserve inside the company.
This term loan to be repaid in the upcoming 4 years.
Target Net debt free by Mar-25

Management

Conclusion:
Tilaknagar Industries Ltd's journey is not just a financial turnaround; it's a testament to resilience, innovation, and strategic vision. From adversity to prosperity, the company is not just pouring spirits; it's crafting a legacy in the ever-evolving world of IMFL. As the company continues to set new benchmarks, here's to Tilaknagar Industries Ltd, a toast to transformation and sustained success in the spirited realm of premium liquor. Cheers!

Disclosure:

I/we have no positions in any stocks mentioned, but may initiate a position.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.

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