Allied Blenders and Distillers Ltd (NSE: ABDL) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Jayathirtha Mukund — Head of Investor Relations and Chief Risk Officer
Alok Gupta — Managing Director
Analysts:
Abhijeet Kundu — Analyst
Abneesh Roy — Analyst
Aditya Soman — Analyst
Kunal Shah — Analyst
Sanjay Manyal — Analyst
Kaustubh Pawaskar — Analyst
Harsh Shah — Analyst
Akhilesh Bhatter — Analyst
Nikhil Kapoor — Analyst
Dhiraj Mistry — Analyst
Nikhel Gupta — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Allied blenders and Distillers Limited Q1FY26 results conference call hosted by NTECH Stockbroking Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you for asking questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded.I now hand the conference over to Mr. Abhijit Kundu. Thank you. And over to you, sir.
Abhijeet Kundu — Analyst
Thanks. It’s our absolute pleasure to host the management of Allied Vendors and Distillers Ltd. For the Quarter 1526 results conference call over to Mr. Mukul. Head of Investor Relations and Chief Risk Officer for further proceedings. Thank you.
Jayathirtha Mukund — Head of Investor Relations and Chief Risk Officer
Thank you, Arjeet. Good evening everyone and thank you for joining our Q1 FY26 results conference call. I hope you have received a copy of Prijal’s presentation. I would like to urge you to go through this along with the disclaimer slides. Today we have with us from the Management of EBT, Mr. Alok Gupta, Managing Director and Mr. Anil Sumani, Chief Financial Officer. Now I would like to hand over the call to our MD, Mr. Anu Gupta who will give you the summary of the company’s quarterly performance before we open up for Q and A. Over to you Alok.
Alok Gupta — Managing Director
Thank you Mukund. Good afternoon ladies and gentlemen. Thank you for all joining us today for the Q1 FY26 earning call of Allied Vendors and Distillers Ltd. This quarter marks approximately one year since our public listing and I’m pleased to share that ABD has entered FY26 with strong momentum.
We have delivered our fourth consecutive quarter of profitable growth, validating our strategy of prioritizing profitable volume growth, portfolio premization, cost focus and agile investment in backward integration to enhance margins. Our consolidated income from operations reached rupees 930 crores in Q1FY26, representing a 22.5% increase over the same period last year. EBITDA grew at 56.4% year on year to 119 crore with EBITDA margin expanding to 12.8%, an improvement of 277 basis points on year on year basis as compared to 10% in Q1FY25.
Profit after tax for the quarter surged 5 times to Rs.56 crores as compared to Rupees 11 crores in Q1FY25. In the quarter we delivered 8.5 million cases up by 17.2% on year on year basis accompanied by a 6.2% increase in realization per case driven by favorable product mix and price optimization. In the mass premium category, the overall volume growth was stable with sales volume maintained at 4.4.6 million cases in Q1FY26 as compared to Q1FY25 mainly due to controlled sale on account of continual adoption of state profit governance metrics.
However, the P AND A portfolio volume growth continues to outperform the industry reflecting consistent progress in our premarization agenda. The P and A category witnessed a strong growth of 46.9% across multiple markets. This growth resulted in increasing our overall PNA salience to 46.2% in volume terms and 55.8% of the sales volume value in Q1FY26 as compared to 36.9 and 46 point. Respectively in Q1 FY25. Overall the growth was not only witnessed in opening up of markets such as AP and Delhi but also certain well established states of North India. Now coming to our overall EBITDA performance. The year on year performance was driven by continued strategic focus on maintaining a profitable brand mix across key states, continuous cost benefit on back of rate reset, packaging efficiency, stable commodity prices particularly on ENA resulting in improved gross margin by 448 basis points to 43.2% in Q1FY26 as compared to 38.7% in Q1FY25. On the opex front, the employee cost at Rs 50 crores in Q1FY26 which is 5.3% of our income from operation as compared to 46 crore in Q1FY25 which was 6.1% income from our operation which is mainly on account of setting up of AVD Maestro in Q1FY26 and our new distillery in Maharashtra which was acquired in third quarter of last year. The other OPEX cost of this 238crores in Q5 Q1FY25 is higher by 37.2% as compared to 173 crore in Q1FY25 mainly on account of high promotion, sales and distribution of established brands and new brands in the super premium to luxury portfolio and certain increases in the state range. Overall on net basis the EBITDA margin improved to 12.8% in Q1FY25 as compared to 10% in Q1. Now let me discuss about the performance of our key brands. I Conic White, the fastest growing millennial spinach brand global for second year in a row, continued to expand its reach across Indian market and has now owned seven international markets in just 30 months. Since launch it has joined the ranks of the top 20 global whiskey brands resonating strongly with the younger consumer and supported by our extensive retail distribution. During the quarter the brand witnessed growth across all states in India and we expect the strong growth momentum to continue. Our flagship brand Officers Choice retained its number one position in the Indian Mass Premium category and continues to be India’s number one exported spirit brand. It remains a critical driver of our profitability and cash flows generating 40% plus gross margin and benefiting from scale brand sell and efficient train spreads. We remain sharply focused on sustaining high margin performance through continued operational discipline for our regional power brands Officer Choice Blue, we are focusing on key markets to strengthen its presence while launching fresh and. Engaging campaign to Connect better with the consumer for the fourth billionaire brand Sterling with a V7, we are currently focusing on driving new consumer trials and deepening engagement through sharp strategic campaigns. We recently did a campaign in Maharashtra and based on the encouraging response, we are expanding this initiative to five other big states. The Quarter Also Significant this quarter also had significant progress in expanding our premium offering. We launched Golden Mist, a new prestige brandy in Karnataka in the month of April 25 and more recently in July 25 in Dalangana. The brand is crafted using French oak cask aging and designed to cater to evolving premier consumption preferences. Meanwhile, AVD Maestro, a super premium and luxury brand subsidiary is scaling rapidly with expanding presence in key Indian cities and select international markets. Brands such as Zoya Gin, Art House, Blended Mod Scotch Whiskey and Woodburn Whiskey are gaining traction among aspiration driven consumers and are well positioned to capture high margin growth opportunities. We also expanded into the super premium and luxury vodka segment with launch of Russian Standard Vodka through a partnership with Rous Corporation. This global brand is now available in key markets from Maharashtra, Goa and West Bengal. On the international front, ABD global footprint has expanded from 14 countries to 27 countries, nearly a 2x expansion complementing our strategy to build a strong consumer franchise across geographies. In addition to our presence in Middle east and Africa, we have secured approvals for export to Canada, South America, New Zealand and to European Union region. Moving to our capex program our 545 crore capex program is progressing well and we are on track. The PET manufacturing facility in Telangana is on track for commissioning in Q2 FY26. We expect the commercial operation to start from September 25th. The margin accretive benefits would start flowing in line with the expectation. The single malt display is progressing well towards a Q4 FY26 launch. In commercial operations we will witness margin accretive benefits to start flowing from April 26 onward. The ENA display in acquired in December 26, commenced operation in February 2025 and is currently operating at 100% capacity. Regulatory approval for capacity expansion are under process. As already stated, these backward integration initiatives are margin included and are expected to support approximately 300 basis point of EBITDA margin improvement from Q4FY27 onwards at the working capital. On the capital front, strong focus on collection and inventory management has resulted in reduction in overall net working capital. We incurred CAPEX payout in line with the planned CAPEX saving. With strong profit performance, net working capital optimization and planned capex related payout we generated free cash flow which helped marginal reduction in our net debt to rupees 754 crores as on 30th June 25th as compared to 766 crore as of 31st March 2025. This led to a marginal improvement in net debt to equity to 4.7 in June 25 as compared to 0.498 in March 25 and net debt to EBITDA from 1.5 in June 25 as compared to 1.7 in March 25. We continue to maintain tight control over working capital with strong focus on optimizing the table. Additionally, industry wide receivable from Telangana state is anticipated to normalize gradually further supporting working capital stability. The external environment continues to support our strategic direction. Consumer sentiment remains upbeat with experience led consumption expected to fuel premium category growth. The new tax regime has enhanced disposable income further encouraging trading up behaviour. Input costs including grain, ENA and glass remain soft and are expected to stay stable. Most states have finalized regulatory updates resulting in relatively stable policy backdrop. The anticipated UK FTA is expected to improve margins particularly beneficial for ABD as one of the largest importer of bulk Scotch and will enhance accessibility of our super premium and luxury offering. As we look ahead in FY26. ABD will remain focused on driving next sales value growth, strengthening operational excellence, advancing portfolio diversification, optimizing working capital and ensuring on time execution of our projects. We are confident that ABD is well positioned to participate meaningfully in India’s evolving premium consumption story and deliver sustainable value creation. Thank you once again for your continued interest and support. We now open the floor for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Avnish Roy from Nuama. Please go ahead.
Abneesh Roy
Yeah, thanks and congrats on very good numbers. My first question is on Golden Mist. You have entered the prestige category. So wanted to understand which market. Will be focusing which are the key competitors here. And if you could also comment on Maharashtra, I did hear your media interview but in Maharashtra post tax hike have most most of the players passed it to the end customer or in in many cases the companies are absorbing the tax side which could impact the margins. That is first question.
Alok Gupta
Thank you. Avnish Golden Mist is a brandy in the prestige segment. The two key competitor in this segment are Napoleon Brandy and Mansion House. As we know that more than 95% of brandy sale comes from four Southern states. We are currently available in Karnataka and in Telangana and are looking forward to launching this brand.Also in the state of Andhra Pradesh and other smaller territories like Pondicherry and Orissa where we see sale of prestige brandy. That should all happen within this within this financial year.
As regards Maharashtra, I think most of the marketers have passed on the tax incident to the customer. Some reduction in the margin and by and large all the key competitors, the key players have tried to retain and protect their margins and minimize margin losses wherever they could. Like I said in several media interviews, I think for us to be able to give a view on the overall volume and margin impact, I think the only way to do is by having a greater clarity on the MML policy which is yet to be announced by the government.
Abneesh Roy
Right. Second question is post IPO last few quarters we have seen very good recovery in your margin profile in the PNA salience. So if you could talk about feet on street, what is the what is the change in the last one year and similarly in terms of point of sale and on trade premises, your visibility. What has gone in terms of effort, what has gone in terms of the investment and next two years as you further scale up in terms of all these niche investments, in terms of the brands and more launches, where do you see the brand spend point of sale and seat on street
Alok Gupta
Also we have roughly 500 people Freedom Street. That’s the total workforce involved in our sales operation. We covered more than 90% of the outlets which are permit to sell alcoholic beverages. Fundamentally, post IPO three changes have happened. Change number one, That happened immediately prior to IPO but got implemented in the IPO year is that we move from volume target to profitable volumes to a margin governance metric. And we redefined the brand and the SKU in each state where we wanted to grow to make sure that the capital is allocated behind profitable state brand skus. The second change that we made was that we realized the sales promotion incentive for our sales team from volume to value with focus on P and A. And the third change that has happened starting this financial year is that we have launched a new sales incentive initiative called Jeep which covers pretty much 90% of the workforce. We have put it on an app where each ESC can actually see the performance that he or she may be recording during the course of the month and essentially create greater visibility and greater pull and push towards their target. We also instead of annual targets, move to quarterly payouts. So essentially these three things have happened. Focus has gone from volume to value. Within that focus on P and A. And now on back of the new program that we put in place with better incentive, faster incentive, we are hopeful that we continue to drive the growth that we are seeing in our business. As regards on premise, I’ll broadly divide on premise into two types. One is key accounts and premium on premise. The coverage of key accounts and premium on premise will be done by ABD Maestro. Just as an example, now we have got listing with three of the largest national hotel chains where the luxury products will get placed in their bars and in the mini refrigerator in the rooms. The traditional on premise will continue to be covered by the ABD’s team. I hope that answers your question.
Abneesh Roy
Yes, quite useful. Last question. India is seen largely as a whiskey market. Now your two new developments. One is Golden Mist is a is a brandy offering and similarly Russian standard vodka. Again vodka, those are smaller opportunities and both have very strong entrenchedness. Brandy Obviously Tilak Nagar is a big player and vodka Radico is a big player.
So wanted to understand why these smaller opportunity and within these smaller opportunities are you targeting essentially again a bit more of the premium end where you’ll be able to really expand the market and long term where how do you see your own risky contribution to sales? What is the plan in terms of the diversification?
Are these more of niche opportunities? Or do you think over five years the whiskey contribution will be lesser in terms of diversification?
Alok Gupta
Well, at a macro level, contribution from whiskey over the last 30 years has remained about 65%. So I think we continue to love and enjoy whiskey as a flavor and we do not expect significant changes in the flavor mix basket. Whiskey will continue to be north of 60%. Other brown spirits, brandy and rum will be about 30 and 5% is white.
So I think pretty much that’s a stable state over the last 30, 40 years. If you were to slice the industry of the 410 million AlcoBev cases last year, roughly 160 million cases were at the prestige price point, which is a price point of, let’s say between 700 rupees and 1000 rupees. Of this 160 million, roughly 40 million is non whiskey, which is brandy and vodka.
Golden Mist operates at a prestige price point which is roughly 16 to 18 million cases, growing high double digits, excellent margin and by and large it has got a sales concentration in the southern region. So Golden Mist is a brand that will operate in a high margin, high growth prestige branding market in the southern region. We also have a reasonably strong distribution.
So it’s not as large as Whiskey. But in 16 million cases, a double digit market share gives us an opportunity to create yet another millionaire brand. Similarly, Brandy is going to look at prestige vodka which is another 1415 million cases. Again, a reasonable double digit market share gives us an opportunity to build another million brands.
So I think these are smaller as compared to whiskey. But each of these opportunities gives us the ability to create another millionaire brand. As regards Russian Standard, Russian Standard competes with super premium and luxury vodka across the world. They sell this brand in almost 60 countries and they compete with the the global leading super premium and luxury vodka.
Therefore this brand helps us on the luxury side provide consumer another exciting option whether it would form of a sipping or cocktail or any other mode of consumption. So the Russian Standard does not compete with Magic Moment. It competes more with the like of Tito Absolute and Grey Goose.
Abneesh Roy
One quick follow up, last question. In both these two sub segments you mentioned double digit market share. That will be a very good achievement but obviously not easy. What will lead to this? Because this is obviously largely a media dark industry and obviously current entrance players will not let it go easy. What will lead to. To this double date share and what is the confidence level in this?
Alok Gupta
So if you were to look at, if you were to look at two trends in the alcobab industry, first trend is premiumization. If you were to go a little bit on history, premiumization was more visible in whiskey as a flavor. But if you look at last two or three year trend, premiumization is happening across all flavors.
Therefore it’s happening in Drum, it’s happening in Brandy, it’s happening in of course all wines. Secondly, if you look at the growth of flavored variants within even Drum and Brandy, that indicates that consumers are increasingly wanting to experiment and experience newer variants.
So I think the way we see the opportunity is that yes, there is an established player there, but the consumer, especially the younger consumers would be looking at experiencing newer experiences and therefore the way we are positioning, for example, Golden Ms. It’s more to talk to the slightly younger consumers who have adopted Brandy as their preferred choice.
But it talks to them in a language that, that they would relate with. So yes, it’s an upper task but we’re quite committed to make progress there. As regards the confidence level would not have launched this brand. The confidence level in our key consumer insight and our go to market strategy, we didn’t believe we had a good chance of success.
Abneesh Roy
Your thanks. That’s all for my take. Thank you.
Alok Gupta
Thank you, Avish.
Operator
Thank you. The next question is from the line of Aditya Soman from clsa. Please go ahead.
Aditya Soman
Yeah. Hi, good evening. Two questions from me. Firstly, thanks for your sort of detailed presentation which really is fairly transparent and gives out a lot of data. But I wanted to just ask on you’ve laid out the pricing structure for P and A and Mass Premium and other brands and other price points. But I just want to understand how the margin structures also vary as we move from sort of mass premium to prestige. If you can answer it on sort of a price per bottle or in terms of percentage margins, that would be super useful.
Alok Gupta
Sure. So if you were to look at some of our listed peers, you would see that, I mean if you look at listed peers where the P and A share of sale is between 70% and 90%, the gross margins are roughly about 42 to 44%. Right. So our Mass Premium segment, which is Officer’s Choice, operates at a gross margin of north of 40%. So it makes the same margin as a percentage that any other PNU does. When we look at our P and A prestige segment in whiskeys and in brandy as we speak, we are currently just a shade below 40. And a quick response to that is that some of the brands are new. As you know the function of the margin here is in terms of market bottle utilization, some bit of LPP rationalization. So over the next few quarters we are on the view that we should be able to cross the 50% hurdle rate on the P and a brand as regards premium and super premium is concerned that portfolio runs at gross margin close to about 55%.
Aditya Soman
Thank you, that’s very clear. And just in terms of the opportunity on the super premium and let’s say super premium luxury, could you give us some sense of where you see this entire space being in terms of the number of cases for ABD in particular over let’s say a five year period or what your aspiration would be
Alok Gupta
The segment, the super premium to luxury segment, a price point of 2000 and above is roughly 3% of the 410 million case market. So say about 12 million cases, right? It’s growing at the highest rate in the Alphabet space, high double digit on back of the India UK fta, some reduction in the bio and the BII prices and some bit of margin improvement in the BII Scotch prices.
Our view is that this segment could more than double in the next four years. Therefore from a 12 million case the segment could be sitting north of 20 million cases. For us this is a year of getting our portfolio ready, building capability in terms of distribution on key on premise and understanding social media space and mixology and cocktails.
And we built this whole team under abd. Maestro, I think the way we are looking at is that of this 20 million cases, if we can get a high single digit market share over the next two or three years we’ll be in a good space power. I think by quarter three of this financial year you have a better sense on trend and timeline because we are now just about getting into distribution expansion.
Aditya Soman
Understand? That’s very clear. Thank you so much.
Alok Gupta
Thank you Aditya.
Operator
Thank you. Our next question is from the line of Kunal Shah from Jaffries. Please go ahead.
Kunal Shah
Hi, thank you for the opportunity. My first question is on your volumes and the benefit that they have received from Andhra Pradesh and Delhi which you mentioned in the opening remarks. If you can quantify it in some way, probably both on PNA and overall.
Alok Gupta
Let me have somebody work on this number. Is there another question that you have otherwise? Allow me maybe a minute.
Kunal Shah
So the next question is what’s the total, let’s say cost base or OPEX that ABD Maestro will incur, let’s say on a full year basis and let’s say two, three years out. What are your revenue aspirations for this business if you can give some directional insight on both.
Alok Gupta
So I think here is an interesting data point. For every 1% volume contribution from the ABD Maestro portfolio, the value contribution is really 9%. So that’s the impact it has in terms of the value growth this year. It’s all about getting the portfolio right and building the go to market in terms of distribution and special services or special skills that it requires in terms of cocktail and mixology. We have five brands ready now and we are looking at adding two or three more brands to this portfolio within this year.
So that we believe will give us the portfolio width that we’ve been wanting. It’s a combination of whiskies, both Scotch whiskey, non Scotch whiskey, Indian whiskies, gin, vodka and one other major white that we’re looking at. And like I was responding to, I think Aditya earlier that our outlook is that how do we build a high single digit to you know, a double digit, I would say high single digit, double digit market share over the next couple of years.
So the segment is currently 12 million cases and growing north of 20%. Year on year we expect this segment to get bigger and bigger. So like I said, I think by H2 we will be in a better position to provide some indication on where we stand. But so far the distribution expansion is on track.
Kunal Shah
Understood. And any comment on the cost structure, I mean operating costs that this entity would have on a quarterly basis or yearly basis.
Alok Gupta
So the brands that are part of the abdm, which are luxury brands, we are for the next two years following a very simple thumb rule that they need to be whatever money they make at a contribution level we will reinvest in the brand and therefore the only expenses that will come is towards running the organization. And year three is when the brand or the business will become EBITDA positive. So first two years going to be the years of investment.
Kunal Shah
Understood? Understood. The second question is on Sterling Riza. So I remember last call you had mentioned that the brand had seen declines in FY25 and I heard your opening remark on some initiatives you’re taking. But can you give more details and by when do you see this brand turning around?
Alok Gupta
Well, I think on SRB 7 we have put a very clear path, stabilize and grow. I think by end of, by end of H1 we’re already in quarter two. We should see the brand stabilizing and towards the festive season. We are hopeful with the marketing program we put behind this brand we should start seeing the green shoots. On your earlier question of. Let me understand your question is that what part of our growth will come from Delhi and AP or individually, what will be the growth in these states?
Kunal Shah
No. So what, let’s say if I were to take these two out, what would have been the growth for the business involving.
Alok Gupta
That’s your question. Just another 30 seconds. I think the data then came to me was what is the growth in the respective states.
Kunal Shah
No worries, we can probably take it later. Yeah. And then just one last bit on Iconic White. I, I mean 5 million cases plus last year. Any, any sense you can view on where you see it this year? I mean do you see any initial signs of now incrementally the brand plateauing out or I mean anything on those lines? If you can share.
Alok Gupta
No, the brand continues to grow. It is on a very strong wicket. We are seeing quarter on quarter growth and I will just Request what’s the Q1 number for Iconic? So just to answer your first question, that if you were to take Delhi and Andhra out, if you were to take Delhi and Andhra out versus a 17% volume growth, our growth would have been about 13%.
So that’s the contribution of Denny and Andhra in the overall growth and Q1. The brand has done roughly 2.2.3 million cases. As you would recall last year we’ve done 5.7. So in Q1 the brand has done roughly 50% of what we sold in full year. That will give you some indication of where the brand could head this year.
Kunal Shah
Understood? Understood. Understood. That’s very clear. And just last one, bookkeeping. I see a very sharp reduction in excise duty in the quarter. Any specific reason? I mean has some state changed their.
Alok Gupta
Yeah, this is a state of UP where the owners of excise duty has moved from the manufacturer to the wholesaler. Therefore essentially this is, this is reflecting in the reduction of our gross sales value on like to like basis. If there was no change in the UP, you would have seen an incremental 300, 350 crores of GST. But we are happy with this change because it also means that we’ve been able to release some of our working capital from the state of gc.
Kunal Shah
Understood. Understood. Thank you. That’s all from my side.
Alok Gupta
Thank you. Thank you.
Operator
Thank you. Next question is from. From the line of Sanjay Manyal from Dam Capital. Please go ahead.
Sanjay Manyal
Hello sir, have few questions specifically on Iconic White. I believe the contribution. So just want to understand what would be the contribution from the state of Maharashtra and what would be the impact of this excise hike which has happened last month.
Alok Gupta
I will just give it to you. See on Maharashtra I deeply believe that only once we get the MML pricing will we really get to know where does IMFL fit. So very difficult to speculate what will happen to the industry. Right. Iconic in the state of Maharashtra was operating at a price point of quad price point of 680 rupees.
And now it is moving to roughly 900 rupees. So that is a change in the pricing. Relative competitors are Imperial Blue which has also gone from 680 to 880 and McDowell’s number one which has gone from 640 to 900. So from a relative MRP parity it continues to be competitively priced versus benchmark competition. But there is about a 25 30% increase in the MRP. So we’re yet to see and we’re yet to see what impact will have on the segment.
Sanjay Manyal
And from a Maharashtra state perspective means Iconic Wide is a bigger brand. What kind of contribution you have from the Maharashtra state?
Alok Gupta
So Maharashtra contribution is less than 10%. The number that I shared earlier of about to 2.3 million less than 10% comes from Maharashtra.
Sanjay Manyal
Okay, okay. And secondly, you have launched this
Alok Gupta
One point about iconic Maharashtra specifically. Like I said, I will wait for the MML duty structure to be announced. I think the way, the way I’m looking at Iconic specifically Maharashtra is that it has got the high price point has moved from 780 rupees to 1070 rupees. I think the way we have to understand this cascade in Maharashtra, not just at the price point level but what will happen to consumers who are earlier at 780 who have now moved to 1070.
Will they take something like an iconic 900 or spend 1100 rupees? So I think consumers will be faced with these choices. And our view is that fingers crossed Iconic could actually benefit a little bit from this price change. Because as consumers from higher price segment start looking at what their alternatives are, Iconic being a newer and a fresher brand could benefit from. But like I said the jury is out. So just also keep in mind that the royal stack price point is moving from 780 to 1070. Royal challenge moving from 780 to 1070. So movement from 780 to 900 is relatively easier versus 780 to 1070. So just keep this in back of your mind. However like I said that what choices consumer make we will find out.
Sanjay Manyal
Sure. And you mentioned 2.3 million cases for the quarter. Can we say the saliency of for the quarter on quarter is similar. So are we looking at anywhere between 9 to 10 million cases for the year or maybe lower?
Alok Gupta
I wish I had a crystal ball to answer the question. But you know I’ve said this earlier. This brand has the ability to be a market leader. So I mean if you can see the performance of the brand even in this financial year in context of where I think this brand could be. Let me just answer the question.
Sanjay Manyal
Sure. So secondly on the overdues, what is our expectation that this overdue from Telangana by when we can expect that the full payment, you know we can get.
Alok Gupta
It is status quo in Telangana. So regular payments are being released overdue. A very tiny portion was released in the month of April and May. But June and July we have not seen release of any overdue payment. So I think clarity will emerge after the Panchayat elections which are slated in the month of August. But that’s when the government will be available for re engaging on the Tamil Nana overdues at industry level. That is really what our understanding is at this point of time.
Sanjay Manyal
And one last question I have about the UK fda. What I believe that the custom duty reduction is very gradual over the next 10 years. So you think really will benefit given the fact that over the next 10 years this can be offset by the excise hikes by this respective state government. Really a very.
Alok Gupta
The reduction is from 150% to 75% and thereafter reduction to 40% over the next 10 years. So there is one big reduction now to 75%.
Sanjay Manyal
That’s immediately. You are saying
Alok Gupta
Immediately. And then over the next 10 years 75 needs to come down to 40. So all from our modeling perspective we have taken the first 75 reduction. What happens thereafter we’ve still not baked into or modeled into our projections.
Sanjay Manyal
Okay, that’s all from my side. Thank you. Thank you very much.
Alok Gupta
Thank you Sanjay.
Operator
Thank you. Our next question is from the last. Line of Ko Pavaskar from ICICI Security. Please go ahead.
Kaustubh Pawaskar
Yeah, thanks for the opportunity and Congrex for good set of numbers. Most of my questions have been answered. Just have question on one of your initial comments of 300 dips expansion in ETA margins from Q4FY27. So you mean to say whatever benefits which you are going to derive from backward integration would start flowing in from FY 2024. Is it all right understanding because some of the facilities we are going to start from Q2FY26. So initially the view was like from Q2 some of the benefits should start flowing in and the incremental benefits what we are expecting should come in from your Q4 of FY27. So just wanted to understand.
Alok Gupta
Absolutely right. The full benefit will come. The full benefit will accrue from Q4FY27. Partial benefit from our ENA distillate in Meenakshi in Maharashtra have already started to accrue and the PET project will start in September 25th. So that benefit will start accruing and. And by Q4FY26 our single malt is still up and running. So benefit will start accruing. So accrual we will start seeing accrual. Sorry, we’ll start seeing ebitda positive impact EBITDA impact starting Q2FY26 and it will scale up gradually but the full impact will be visible to us in quarter four FY27.
Kaustubh Pawaskar
Thank you. Follow up question on Iconic this quarter we have seen 2.5 million cases of sales volume. So is it mainly because of the fact that we are expanding into various states or even the repeat attraction to the brand is quite strong. Any understanding on that?
Alok Gupta
So from a footprint expansion, Iconiq was launched across all states of the country in the last financial year. So a footprint expansion is largely now in the international market. We have now shipped Iconic to about seven new countries and we’ll expand the footprint going forward. But from a domestic perspective we have finished our entire national road in the last financial year. So the volume that you’re seeing is just repeat consumer and newer consumers that are coming in.
Kaustubh Pawaskar
Any practices on the other launches, what you have done in past six to seven months, which of the brands expect to be. I’m not saying that it will be a next iconic, but closer to that where you are seeing good traction.
Alok Gupta
So I think we are excited about all new brands. However, if you pick brands that can give us scale in terms of volume and are also high margin then I would say Woodburn as a brand we are extremely excited about. It’s a 3000 rupee MRP product. It’s what I call daily affordable luxury which is 100 rupees a day kind of a thing.
So I think that’s a, that’s a brand we are really excited about. If you look at our golden Ms. Brandy that we recently launched in a large 15 million segment, high margin, high growth, we’re extremely confident about that. It can give us scale and the margin. We also have a hidden gem in our portfolio brand called Srishti which is an Indian brand with an Indian soul.
We are currently selling it in three markets of North. We are extremely happy with the early results that we have and the playbook that we have on the brand and we’ll expand it in the course of the year. The idea of picking up these three brands is largely from the fact that these three brands offer a scale and high margin.
Of course the work that is happening on Zoya with its two flavor variant which is watermelon and espresso started to deliver good results for us. So we’re excited about. I think these three brands can will give us scale and margin bump up.
Kaustubh Pawaskar
One final question on Maharashtra you said that it is very difficult to comment on the impact as of now on the XRCP hike. Maybe from the customer point of view but on the Horeka are you seeing any kind of impact of saying like they are, you know, is there any down trading as you’re talking about as an opportunity for you?
Alok Gupta
If you look at the super premium, premium, super premium and luxury segment, the increase in MRP is marginal. It’s not even. It’s single digit from 3 to 5%. Right. So the structure of the excise duty is such that it is increasing. It has increased the excise duty on the mass premium and the prestige price point has offered MML as a category be it more affordable mrp. But in the premium, super premium and luxury there’s hardly any change in mrp. Therefore from a Horeca perspective we do not expect that this policy will impact any which way the current consumption pattern. Thank you very much.
Operator
Thank you. The next question is from the line of Harsh Shah from Bandhan amc. Please go ahead.
Harsh Shah
Yeah. Hi Alok, thanks for taking my questions up. Firstly, if we look at your volume six of iconic Disc motor there would be a volume degrowth. Right. And question here is that you know even in the previous session we’ve spoken about the brands were excited about, right? Wood Burns and Zoya and the other brands. But I mean how do we think of let’s say brands which are already OC Blue or Sterling Reserve, how do we think of those brands? Because even I mean they are also how do we think of spending behind those brands? How do you think of getting growth back in those brands?
Alok Gupta
So harsh. My earlier response was in context of the question that amongst the new brands that we are launching which are the one we are excited about? So the response was in context of the new brands, not in context of the portfolio. So that’s an important point I wanted to make if you were to ask me a brand that we are excited about.
We are extremely excited about Officer’s Choice. It’s a flagship brand, largest exported brand out of the country. The margin governance framework has got our gross margins north of 40%, closer to 43%. This brand requires fairly low levels of LPB and promotional support. So net retained cash is very high and we have our guidance is single digit growth with focus on our gross margin because this really is a cash cost. So very, very excited we are doing some cover our brand.
So there are different reasons for each brand. There’s a different reason to be excited about. So that’s Office’s Choice. We are doing some very interesting work in terms of innovation on this brand which hopefully quarters we can talk about. So as market leaders we are thinking about how do we expand the segment, how do we bring excitement in the segment.
So we’re working on that. Office’s Choice Blue. It used to sell more than a million cases in the market of Delhi. And because there was policy uncertainty in Delhi, we had taken a back step in Delhi and our volumes were down to about 10 12,000 cases a month which is about 150,000 cases a year.
Now that the policy for Delhi has been announced for the next nine months we are ramping up Delhi in terms of our market share and therefore Officers Choice Blue has always been a regional powerhouse and therefore there are two or three states. Delhi of course is the leading state here where we will see volume growth coming back on Officers Choice Blue, the third brand, SRB7 we have covered, stabilize and grow and we are. Targeting towards H1, able to stabilize the brand. And then from H2 we’ll start seeing some green shoots on the brand. So those really are our three core brands. I’ve covered Golden Mist and Shishti, which is a new brand in our portfolio. One more notable mention here would be that two of our premium brands, especially Khiron where we have 25% share in the domestic market, the brand is approved in the defense vertical. And this year SRB 10 and Chiron, we will focus on CSG as a channel from the export footprint. Again the growth will come entire thesis of India and beyond. Not just India. We have grown our footprint from 17 countries to 17 countries in FY 24 to 23 countries in FY. We are already operating in 27 countries and we are looking at expanding our footprint further. So from 17 countries in FY24 by end of the year we are looking at at least a 2x increase which means at least 33 to 35 countries where we start exporting. So like I said, different brands give us different opportunities. As far as Iconic is concerned, the market share it is getting, it is getting market shares from brands like McDowell’s Number One and Imperial Blue and needless to say even OC Blue. So we also see the two brands together as to how OC Blue and Iconic together are getting the market share. So I hope that provides you a response to the question that you were looking for.
Harsh Shah
Got it, Very helpful. Secondly, basically when I look at your presentation, we are currently at 46% in terms of PNA volume. Volume share, right? And you’ve called out an aspiration to reach 50 PNA volumes in three years. Right. That is something which I mean, and let’s say given it, you know, your slide on your new launches, everything we are doing is in prestige, right?
So I mean the 50% would, I mean it’s something which we should be there I think by the end of this year. Right. And so I mean in terms of target, I think wouldn’t a PNA volume contribution be much higher given what we are talking about doing in terms of ABD micro and see that what we are seeing in Iconic Israel over next year and 60, I mean it’s very low number.
I mean, what are your thoughts on that?
Alok Gupta
No, when we had indicated that you would like to be 50% at that point of time, we were only 37% of DNA. Right? Which is FY24. Of course we ended the year with about 42%. We are at 46 percentage. So we continue to grow the way we are growing. Especially with addition of Golden Mist and rollout of Shishti in many markets we should be looking at closing down the gap between 46 and 50. There is massive amount of work that we are currently doing on offices choice as a brand and we are hopeful that and this is largely in the space of innovation and sort of engaging the consumer differently. So we are also hopeful that we are able to stimulate growth in this price point or in this segment which is high single digits. So honestly if we are able to get officers choice to grow high single digit, we’d be quite happy with hitting 50% because it’s really a big cash generator for us.
Harsh Shah
Even in terms of your margin bridge. Right. So we are currently PTM business, we are at 13% EBITDA and aspiration is 15% right. Over next three years will that margin bridge be linear in a way that we see expansion every year or as you, as you previously commented that this is a year of you know, building your ABD maestro portfolio which would also mean that you would want to invest more in terms of brand building this year. Right?
So I mean will it be like taking one step back and then two steps ahead or will it be a linear challenge?
Alok Gupta
I think let’s put it this way, we are currently, let’s say at about 13% EBITDA margin. There are two big levers of margin expansion. One is FTA. Let’s say Q4 of this financial year should come into play. That itself should add about 200 basis point margin improvement. And second is the backward integration which we have said by Q4FY27 we should realize the put 300% benefit.
Right. So it’s a stage, it’s a staged, so it’s not linear in many ways it is linked to very specific milestone. In addition there are two areas of investment. One is on brands, both the ABD portfolio. We are looking at improving our ANP as a percentage of NSV by 75 to 100 basis point this year, another 75, 200 basis point next year to ensure that brands like OC Blue and Sterling, B7 and Iconic continue to get the A and P support.
So the numbers that I’m sharing with you is after providing for that investment and also ABD Mastro, like I said for the first two years is likely to lead investments and Therefore going from 13% to north of 15% is after providing for investments in the brand and also people process and tech infrastructure. We are trending, we are moving from ECC to Hana for example this year. That’s a big transition for us in terms of the tech platform. I earlier spoken about how we are putting our sales force practices including our sales incentive program Jeep on our, you know, as part of our automation program, our risk practice. We are looking at investing in our SNOP digitization practice. So the numbers, the outlook that we’ve given on EBITDA is after providing for investments on our core brands, investment on ABDM investment and also investment in people, tech and processes. So you will see over the next balance 7/4 you will see gradual progression on the EBITDA numbers.
Harsh Shah
Okay, just one data point on one previous participant asked you about the operating cost structure for ABB Maestro. I mean can you share a number there? I mean in terms of annual basis, F26, F27. What would be the kind of cost structure there in terms of opex?
Alok Gupta
I think little early days like I said, I think on ABD Maestro. Let’s talk in quarter three. We’ll have a better sense on ABD Maestro. Right now the focus in H1 is the portfolio. We are building two hubs for manufacturing. One is in Aurangabad which is Maharashtra to service the market of west and south. The second hub is in Haryana.
You know Haryana is the largest market in north. So second hub is in north which is Saha unit in Haryana which is going live this month. Has gone live this month. So brands, manufacturing. The team is in place listing in on key accounts. We already have three large national hotel chains where we’ve got our listing. So I think the focus right now is just about getting the fundamentals in place so that we can grow from there. But I think Q3 onward we should be able to talk a lot more about numbers there.
Harsh Shah
Got it. And just one last question from my side. I mean after this exciting hiking Maharashtra, what’s the consumer behavior which you are picking up? I mean the last one month
Alok Gupta
Too early. The retail still has stock of the old prices, right? I think towards first week of August the new MRP inventory will roll out. We are as keen as you are to understand what will happen in Maharashtra. But these are early days.
Harsh Shah
Fair to say July had. No, July had very less primaries.
Alok Gupta
It’s not about primaries. The distributor and the retail outlets were carrying enough and more inventory. So from a consumer point of view, let’s say retailer was carrying X week of inventory and the distributor was carrying five week of inventory. Therefore from a consumer point of view, even now in many markets old MRP stocks are available. We have started to see the new MRP stocks coming on the shelves. So I think by 7th and 10th of August we’ll start getting the retail audit in terms of what’s happening to consumers. Consumer behavior. Anything that I tell you right now is. Will hold. No. Good. Because it’s a mixed situation. Old mrp, new mrp.
Harsh Shah
Okay, my question is more from. I mean the primary, I think your sales to distributors. Right. So was that. I mean impacted in July because of the, you know, Talking about old MrP.
Alok Gupta
Everybody. Everybody’s impacted. Understand? Everybody wants to understand what will happen in the market. Absolutely. Goes without saying.
Harsh Shah
Thank you so much for that.
Alok Gupta
Thank you.
Operator
Thank you. Our next question is from the line of Akhiles Bhattar from Ikigai Assets. Please go ahead.
Akhilesh Bhatter
Hello. Congratulations on a good set of numbers. I just want clarification regarding your guidance for working capital this year. So you mentioned that Telangana Receivables are again coming at a very slow pace. So how should we look at working capital this year? Would it be a big drag similar to what it was last year?
Alok Gupta
No, not at all. I think operations, the EBITDA that we generate this year should be more than sufficient to meet the entire growth capital requirement for the business. In fact, it will leave free cash on the table. So the only reason, the only reason we may need to borrow is for our project that we’ve already discussed. But from an operation point of view, the business is self sufficient and will generate free cash. And if the Telangana money was to go in, we’ll see significant reduction in our net debt as well.
Akhilesh Bhatter
Okay,
Operator
Thank you. Our next question is from the line of Nikhil Kapoor from LIC Mutual Fund. Before that, a reminder to all participants. Please make sure you’re asking two questions for participants. Nikhil sir, please go ahead.
Nikhil Kapoor
Hi sir. Congratulations on a great set of numbers. Just one question. Most of my questions have been answered. Just one thing. I know too early days. But this new category of Maharashtra made liquor which was talked about in the excise policy. Would we be able to quantify if any benefits that will flow to us under this category?
Alok Gupta
The answer is yes, we have. What this category will need is capacity. And we have geared up and ramped up our capacity in mms. So we definitely see an upside on the volumes.
Nikhil Kapoor
Difficult. To qualify it too early days.
Alok Gupta
So the reason is that only the duty structures announced which is 270 base price. But until we don’t get to see contours of policy is very difficult to understand.
Nikhil Kapoor
Understood. Thanks. That’s all from my side.
Alok Gupta
Thank you.
Operator
Thank you. Our next question is from the line of Dheeraj Mistry from ICICI Securities. Please go ahead.
Dhiraj Mistry
Yeah. Yeah. Hi Alok. Hi Muka. Sorry I joined a bit late. But I would like to know what is the growth rate excluding let’s say EP market and Telangana Delhi market which was kind of a one off and that market has reopened. Sorry if you have answered that question.
Alok Gupta
Happy to answer the question. Again our Q1 growth is 17% and without Andhra in Delhi India his growth would have been about 13 14%.
Dhiraj Mistry
Got it. Got it. And see more from this like new product launches. So definitely we have increased our aggression in terms of product launches in luxury and premium segment. But now that the incremental many players have been coming in this segment and this space is in which is getting more crowded in a way. What is the growth trajectory let’s say going ahead you expect from this and how does saliency of this or let’s say the profitability of this segment would move in three to four years period of time. Especially when we are into investment phase in this segment.
Alok Gupta
Your question is related to the super premium luxury segment.
Dhiraj Mistry
Yes, yes.
Alok Gupta
So like I said of the 410 million cases the volume sale is about 3% translating to about 12 million cases. It accounts for 20% of industry profitability. A typical case NSV is about 8 to 10x versus brands that operate in prestige segment. Gross margin profile about north of 55%. Our outlook is over the next two years whatever money we make on the brands, we will reinvest in the brands.
Therefore we do not expect these brands to contribute to our ebitda. There will be some costs associated with the organization and manpower but the brand will take care of themselves. From a marketing A and B point of view. And year three we are targeting the EBITDA for it to start contributing to EBITDA. But from just a unit economics comparison NSV is about 8x of the prestige segment.
Margins for us are let’s say 40 odd percent on our EBITD portfolio where margins are about north of 55%. But back to on a much higher NSV. Therefore if over the next three or four years we can get to a single digit market share of 15%. 20 million case segment. That’s about a million cases. It should make a significant difference both in terms of top line and bottom line.
Dhiraj Mistry
Got it. Got it. And for next three years basis it would be more of a margin dilute view from the portfolio level point of view. Or let’s say on an aggregate basis level
Alok Gupta
For the first two years.
Dhiraj Mistry
For the first two years. Got it. Got it. Okay. And sir, lastly on this backward integration, the benefit of this, let’s say the pet bottle which is should be fin in that’s a couple of months of time. What kind of saving we are expecting on an annualized basis from this project.
Alok Gupta
The pet project alone should be analyzed edition should be north of 30 crores.
Dhiraj Mistry
Okay, thank you. Thank you. That’s it from my side and once again congratulation on good sets of number.
Alok Gupta
Thank you very much.
Operator
Thank you. Our next question is on the line of Nikhil Gupta from YU Capital. Please go ahead.
Nikhel Gupta
Yeah, hi. My first question is I think related to rock paper. I think it’s quite some time we have approved the investment. So what’s the. What’s happening on that front? Can you please elaborate?
Alok Gupta
Thank you for this question. It’s just been. It has been getting the quarter one on track and growing. Nothing else. Just a matter of finding time and hopefully we’ll announce soon.
Nikhel Gupta
Okay, so the investment has been already made or it’s still not a signing chase?
Alok Gupta
No, we’ve not. We’ve not made any investment in the business so far.
Nikhel Gupta
Yeah, so that’s what I was trying to ask. I mean I think we approved in the quarter four.
Alok Gupta
Like I said, we just got busy with our quarter one operations and therefore it just, you know we felt that let’s put all our energy behind getting the quarter one off on a good start and depending closure and the investment thereof. We’ll focus in quarter two now.
Nikhel Gupta
Okay, and how are we, what’s our target? Like how many cities we want to expand that and what’s the dream? What’s the target setting for that?
Alok Gupta
This brand operates in sort of a premium super premium rum segment. The size of the Segment is a 50 million cases. It has one notable competitor. So the idea would be over the next couple of years to target a double digit or a higher market share. The relevant market in terms of numbers would be about 10 to 12. The brand is already registered and operating in seven of those 12 markets. The balance five we will need to open up over the next few quarters. And we have distribution in place. So once we get this brand up and running, we should see quick results coming out.
Nikhel Gupta
Understood. Thank you very much.
Alok Gupta
Thank you.
Operator
Thank you. Our next question is from the line of Netik from AV Alpha Fund. Please go ahead.
Unidentified Participant
Hi sir, thanks for taking the question. So my first question is, you know, when I actually look at your numbers, you know, and I compare poq, while our revenues are sort of similar but our expenses, you know, have increased. So just wanted to, you know, if you could quantify where we have spent the extra amount, that would be really helpful.
Alok Gupta
So we’ve had a slightly higher expense on people creation of the ABDM team. Also our Merashi Distillery also announced the increments for FYI. So there has been an increase in our people cost. The second big element is higher investment in the. In the ant behind the brands. The two big ticket item where bulk of the investments have gone in.
Unidentified Participant
Got it, sir. And just wanted one clarification. You mentioned that due to the UK fta, the import duty coming down, the benefits would be closer to 400 basis points, is that correct?
Alok Gupta
200 business.
Unidentified Participant
Thank you.
Alok Gupta
All right, thank you.
Operator
Thank you ladies and gentlemen. As there are no further questions, I now hand the conference over to the management for closing comments. Please go ahead. Thank you. And over to you.
Alok Gupta
Well, thank you once again for taking the time out. I hope you know we’ve been able to provide you data queries and clarifications to the extent possible. However, if there’s anything that remains unanswered or you need a follow up, please reach out to Mukun. We’ll be happy to provide the data. Thank you once again for taking the time out.
Operator
Thank you on behalf of NTEC Stockbroking Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Sam,