Release Date: July 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Achieved an all-time high quarterly revenue of INR252 crores in Q1 FY25.
- Launched new premium products, including Hillfort whiskey and Nicobar gin, expanding the IMFL proprietary brands portfolio to nine.
- Strong partnerships with Diageo and Inbrew, expected to drive future growth and enhance operating margins.
- Commissioned a 130 KLPD ethanol plant, now operating at full capacity, contributing to improved operational efficiency and margins.
- Geographic expansion into new states, including Delhi, Chhattisgarh, and West Bengal, expected to drive double-digit revenue growth.
Negative Points
- High grain prices and elevated costs for packing materials, impacting overall profitability.
- IMFL proprietary revenue growth was nearly stagnant in FY23 and FY24.
- Significant reliance on Madhya Pradesh for revenue, with 40% of IMFL proprietary sales coming from the state.
- Seasonal fluctuations in IMFL licensed brand volumes, with Q4 typically being the highest quarter.
- Ongoing challenges in registering new products in targeted states, which is a lengthy and complex process.
Q & A Highlights
Q: Can you give me the details of the status of the permission received in the new five states where the sales are to be launched with the expected sales in the current year?
A: This year we are launching in two new states, Delhi and Chhattisgarh. Apart from this, we are launching in Maharashtra, Pondicherry, Assam, Tripura, Goa, and Uttar Pradesh. The registration in Delhi has already been done, and the supply should start anytime now.
Q: Your proprietary IMFL revenue was nearly stagnant in FY23 and FY24. Can you give me the volume breakup of the proprietary and also production like Nicobar, and the revenue guidance for the current year?
A: We cannot give SKU-wise breakup due to competition, but overall, we are targeting to grow the IMFL proprietary segment by 12% to 14% in FY25, which is a mix of volume and price growth.
Q: Can you give me the status of our expected premium ready-to-drink launch in Q2?
A: In Q2, we have launched Hillfort. There are two to three products lined up for Q2, Q3, and Q4, including RTD and Tequila.
Q: What is the revenue and EBITDA guidance for the current year and next year?
A: For FY25, we are targeting an EBITDA range of 11% to 13%. For FY26, the range is 13% to 14%. Revenue should grow by 12% to 14% on the top line apart from Ethanol, which will give an additional 300 crores. In FY26, overall revenue should grow between 13% to 14%.
Q: What is the ENA and Ethanol price realization?
A: ENA average realization this quarter was around INR66, and Ethanol is at INR71.8, which is from maize.
Q: Is the company planning to get into the beer segment?
A: No, not as of now. Beer is a totally different beverage, and there is a lot of opportunity in the IMFL segment, so we are focusing on that.
Q: What is the expected project cost for the Malt plant?
A: We are putting up a 6TL Malt plant, which will be expandable. The project will cost around INR80 crores and should be commissioned before March 2021.
Q: What is the total debt on our books, and the cost of that debt?
A: The total debt is around INR65 crores, with a debt cost of approximately 4.5%. This includes term loans, and as of June, we do not use any working capital capacity.
Q: What is the kind of hike that we've been able to get from the government for IMIL?
A: We have received a yearly increment from 600 to 625 this year.
Q: How do you foresee the IMFL licensed brand going forward with the increasing focus on IMFL proprietary brands?
A: We have positioned our brands in different segments to avoid competition. In other states where we are expanding, we are only entering with our proprietary brands, so there is no conflict of interest.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
