Allied Blenders and Distillers Ltd (NSE: ABDL) Q4 2025 Earnings Call dated May. 16, 2025
Corporate Participants:
J. Mukund — Head of Investor Relations and Chief Risk Officer
Alok Gupta — Managing Director
Analysts:
Abhijeet Kundu — Analyst
Chetan Sharma — Analyst
Kaustubh Pawaskar — Analyst
Aman Baheti — Analyst
Sanjay Manyal — Analyst
Kunal Shah — Analyst
Chintan Shah — Analyst
Pritesh Chheda — Analyst
Harsh Shah — Analyst
Asha — Analyst
Akhilesh Bhattar — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Allied blenders and Distilleries Limited Q4FY25 results conference call hosted by Antec Stock Broking Limited. As a reminder, all participant lines will be in the lesser note for. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 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
Yeah. Thanks Abhirat. It’s our absolute pleasure to host the management of Allied blenders and distillers limited for the fourth quarter and full year FY25.
Over to Mr. Mukhan, head of Investor Relations and Chief Risk Officer for further proceedings. Thank you. Thank you.
J. Mukund — Head of Investor Relations and Chief Risk Officer
Good evening everyone and thank you for joining our Q4 525 results conference call. I hope you have received a copy of our results 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 ABD. Mr. Shekhar Ramamurthy, Executive Deputy Chairman. Mr. Alok Gupta, Managing Director. Mr. Anil Sumani, Chief Financial Officer.
Now I would like to hand over the call to our MD Alok Gupta who will give you the summary of the company’s quarterly and full year 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 joining us today for our Q4 and full year financial results of 2025 earning call. And also my apologies for the five minute delay in starting this call. FY25 was our first year as a listed company And I’m pleased to share that it has been a transformational year for ABD marked by record performance, disciplined execution and a strategic progress across key pillars of our growth agenda.
Despite a year of overall low growth, consumer love for premium product continued to fuel growth in the PNA segment. The sparkle of the festive spirit in Q3 also brought some cheer to the industry. The policy environment had its ups and downs but was largely favorable to the business and largely stable input cost environment helped the industry to deliver better gross margins. ABD was well poised to capture these trends with our broad portfolio. Pan India Manufacturing Network. Strong national distribution footprint to deliver both value and volume growth with significant margin expansion.
Now let me share key highlights of FY25. Our consolidated income from operation was at rupees 3541 crores up 6.2% on year to year basis. We reported highest ever EBITDA of rupees 451 crore versus 248 crores in FY24. A growth of 81.7%. EBITDA margin therefore improved to 12.7% in FY25 versus 7.5% in FY24. We delivered highest ever PAT of Rs. 190. Crore versus 2 crore in FY24. On standalone basis, revenue stood at Rs. 3,541 crores, EBITDA at rupees 453 crores and PAT rose to Rs. 200 crores from 7 crores in FY24. These gains were made by multiple factors.
Strong volume growth of 13% in PNA segment, Sharp focus on driving profitable sales through our profit governance model. Cost reduction through a rate reset, packaging efficiencies and a disciplined control over operating expenses. We also enhanced our A and B investment behind our P and A portfolio. In line with our dividend policy, the Board has recommended a final dividend of Rs. 3.6 per share. FY25 was a year of transformation. At ABD we had four broad themes on which we worked. First, premiumization align our portfolio with the consumption trends to gain market share.
We’ve also built our super premium to luxury portfolio in the high growth high margin segment. Backward integration to ensure both supply security and and margin growth margin expansion deliver industry parity, gross margins and expand our EBITDA margins and our fourth theme which is around governance culture strengthening of our internal processes including digitization in identified areas. A special mention for a special brand, Iconic white which grew by 151%, crossed the 5 million case mark and recorded a sale of 5.7 million cases and was also shipped to many countries initiating its growth journey in the international market.
Moving to Q4FY25 in Q4FY25 we delivered our strongest ever quarterly performance. Our consolidated income from operation was 935 crore up 21.4% year on year they reported highest ever EBITDA of Rs. 150 crores which was more than double of Q4FY24 EBITDA of rupees 62 crores. EBITDA margin improved to 16.1 in Q4FY25 versus 8.1% in FY24. We delivered highest ever quarterly PAT of Rs. 79 crores versus a net loss of rupees 2 crores in quarter 4 FY24. Our top line growth was led by PNS segment which grew volumes by 32.7% and was well supported by our mass premium category growth of 13.3% versus Q4 in FY24.
A stable policy environment both in Andhra Pradesh and in Delhi helped us regain market share. And also reflects in our growth. Cox benefit continued on back of rate reset and packaging efficiency. The grain price also softened back off of policy support from FCI. This resulted in our gross margin expanding by 436 basis points to 43.4% as compared to 39% in Q4 FY24. Our significant EBITDA growth is driven by sharp improvement in in absolute gross margins and only a marginal increase in our operating cost. This surplus has flown through to EBITDA. The quarter also includes a one time reversal of provision of Rupees 11 crores. Excluding this EBITDA from operations stood at 139 crore with a margin of 15.3%.
Moving to interest cost, our interest cost in Q4FY25 was at 28 crore broadly in line with Q3 interest cost of Rupees 27 crore. However, this interest cost is significantly lower as compared to Rs. 45 crores in Q4FY24. Our net debt as on 31st March 2025 is at Rs. 766 crores and is broadly in line with Rupees 763 crore as on 31st December 2024. This clearly indicates that in Q4FY25 our card cash flow from operation not just supported our working capital requirement in terms of growth but also our investment in CapEx program and the acquisition of the Fullerton brands.
Our balance sheet is significantly stronger today. Net debt to Equity improved to 0.5 as on 31 March 25 from 1.8 as on 31 March 24 and net debt to EBITDA improved to 1.7 as on 31 March 2025 from 3x as on 31 March 2024 creating a room for future growth investments. FY25 was also year of foundational investments. We made substantial progress on our capex program of rupees 525 crore focused on backward integration. Our newly acquired Ena Distillery in Aurangabad is running at 100% capacity and the produce is being used for captive use. Our project on expansion of 61 million litres over next three years is on track. Currently is under regulatory approval process.
The PET bottle facility in Telangana designed to meet up to 75% of our needs is expected to be commissioned in Q2FY26 and be EBITDA accretive thereafter. The integrated MALT distillery at Telangana with 4 million litre capacity is expected to be operational in Q4. y26 as is on track, these initiatives are margin accretive and are expected to deliver approximately 300 basis point EBITDA margin improvement over the medium term. We continue to strengthen our premiumization strategy with introduction of Arthouse in the luxury whisky segment and the acquisition of Fullerton brand Woodburn, Pomori and also Rock Paper Rumors.
Our strategic distribution agreement with Raus Corporation to introduce Russian Standard Vodka in India is a significant step towards expanding our premium and super premium vodka offering. Our global footprint now extends to 23 countries up from 14 countries last year, reflecting the increasing acceptance of our brands beyond India. As we look to FY26, our focus will be on executing the investments we have made, scaling our premium portfolio, improving distribution reach especially in premium on premise and maintaining our margin discipline.
The macro environment remains supportive with stable input cost policy clarity in major states and hopefully demand resurgence across category on back of high disposable income and other macroeconomic and policy factors. UK FTA expected to be margin accretive as ABD is one of the largest importer of bulk Scotch. This agreement will also benefit our super premium and luxury portfolio by making it more accessible to the consumers.
To support our long term strategic roadmap, we are placing an enabling resolution to raise fund with multiple options such as equity shares, convertible bond debentures and others to take advantage of opportunities as and when they come along. With our credit rating upgraded to a with a positive outlook, we have the flexibility to raise capital efficiently should the opportunity arise.
In summary, FY25 was a transformative year for ABD. We delivered record results, improved profitability, strengthened our balance sheet and laid the groundwork for future ready growth. As we move into FY26, we remain focused on scaling our premium portfolio, maintaining our margin focus on mass premium, realizing the benefit of our CapEx program, continue the cost focus re rate for lower interest cost and driving sustainable value creation.
I thank you for your continued trust and support and for your time and will 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 CHAR and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press char and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Chetan from Systematics. Please go ahead.
Chetan Sharma
Hi, thank you for the opportunity. Firstly, congratulations on a great set of numbers. Have two questions. First question is on Andhra Pradesh. How have the recent policy changes in AP specifically influenced the desired state brand or say SKU mix strategy for abdl? And are there specific segments or brands within our portfolio that are disproportionately benefiting from the new market dynamics in the state?
Alok Gupta
All right, thank you for your question. AP policy we see as largely favorable to ABD on back of the policy. Last financial year we saw our ARR improve from 1.8 million to about 3 million. And we see further opportunities which I will share with you on specific segments. I think there are two price points in the state of Andhra Pradesh that are now growing. The one that is really relevant for us is the price point where Iconic operates. This segment has captured the imagination of consumer in the state of Andhra Pradesh and is roughly about 5 lakh cases a month. We were able to secure approval for Iconic in the month of November.
We have since rolled out the brand and the brand month on month is showing tremendous growth and we are hopeful that we’ll get to an ARR of a million cases in a short period of time. So that’s a very, very large opportunity for us. In the state of Andhra where Iconic will continue to expand its sales, we have seen at the lower price point growth of brandy as a flavor in the tender that is expected to be approved shortly. We have expanded our portfolio where we will be able to operate in this reasonably profitable large volume segment. I hope that answers your question. Happy to take a follow up.
Chetan Sharma
Yeah, that answers my question. Thank you. And second question is on the luxury portfolio. So we have built a portfolio of luxury brands to Zoya, Art House, the Russian Standard partnership acquisitions like Woodburn, Rock, Paper, Rum. Beyond these existing or recently added brands, what is the long term vision and specific plan for further expansion in the luxury segment? Potentially say through new launches, partnerships or acquisitions. And how do you see the overall luxury portfolio evolving in terms of size and brand mix over the next three to four years?
Alok Gupta
All right, thank you. You would recall if you were on the calls earlier, we had spoken about an approach which we called as a right to win approach and not just right to play. We had identified. We identified in the super premium and luxury segment about eight such opportunities of which five are already up and running. Our framework was quite simple. We were looking at segments that were growing faster with targeted gross margins and fewer competitors. So that’s been our framework.
So the portfolio that you see today that is already out in the market will meet this test that these are the price point and the flavors at which we are seeing larger growth, which is indicative of the fact that more and more consumers are gravitating to those flavors at these price points. We’ve already rolled out five brands. We will also roll out three additional brands in FY26. That by and large completes our portfolio that we want to take to the market. The industry is about 400 odd million cases. The super premium to luxury segment is roughly 3%, but it accounts for nearly 20% of industry profit. And that’s why this high margin, high growth segment is of interest to us. In our assessment, the segment will more than double over the near medium term. And we are hopeful to get a high single digit market share from this segment which will impact, which will give us disproportionate growth both in terms of revenue growth and also margin expansion.
Chetan Sharma
Okay, that was helpful. Thank you.
Alok Gupta
Thank you.
Operator
Thank you. The next question is from the line of Costa Pavaskar from ICICI Securities. Please go ahead.
Kaustubh Pawaskar
Yeah, good evening sir. Thanks for giving me the opportunity. My question is again on Andhra Pradesh. So in this quarter of the 20% volume growth or 32% volume growth, what we have achieved in what would be the, you know, growth contribution from Andhra Pradesh market itself?
Alok Gupta
If you give me a minute, I’ll have to get the numbers out for a very specific query. But in the meantime I can confirm to you that the P and A growth for us has been across India, pan India. But give us, you know, a bit of time. We’ll have somebody pull out the number in parallel.
Kaustubh Pawaskar
And so my second question is on margin. So second half. We have seen, you know, EBITDA margins recovering substantially. We have seen strong improvement in the gross margins. Our EBITDA margin sequentially has also improved. You know, as a company, we are targeting around 15% EBITDA margins by FY28. But the way, you know, the mix is improving and we are also focusing on various backward integration strategies. Considering that, do you expect this 15% EBITDA margin by FY20. We can achieve it maybe a little bit earlier than what we are anticipating.
Alok Gupta
You’re aware that there are multiple macroeconomic factors which would impact the margins. Of course, for FY26 we expect a neutral commodity cycle. Therefore we believe that the gross margins will be broadly in line with what we have planned. And therefore we should see expansion in EBITDA margin. I think clearly the plan as of now is to get to industry parity, EBITDA 15% over the next two years. What we have not baked into this EBITDA is the upside that we’ll get on back of fta. We have not baked into this EBITDA the upside that we could potentially get from our luxury portfolio. And what we have not baked into this is the potential upside that we’ll get from our P and a portfolio where we have said that from a 42% salience we’ll go to 50% salience. So the focus is quite clear. Get to the 15% EBITDA margin which is industry parity and also expand the margin on back of these three growth track that I have just spoken about. But we’ve not quantified it for now.
Kaustubh Pawaskar
And what would be the constitution of the bulk alcohol imports for us of the overall raw material force?
Alok Gupta
So we are the largest importer of bulk Scotch in India. As an Indian company, we import scotch worth roughly about 100 crores with 150% duty means about 150 crores of duty. And therefore the duty was to come to half and then progressively reduce, it will add, it will reduce our cogs, expand our gross margins and we see this entire saving to flow through to our ebitda.
Kaustubh Pawaskar
One last one, the capacity expansion which we are planning to do at Punjab. It is additional to our overall Capex plan of around 525 crores. Right?
Alok Gupta
That is right. The capacity expansion in Punjab is a bottling expansion. The expansion that we’ve already announced is of ena which is the raw material that goes into our products.
Kaustubh Pawaskar
Thank you.
Alok Gupta
Thank you.
Operator
Thank you. The next question is from the line of Aman Baheti from NCRED Capital. Please go ahead.
Aman Baheti
Hi. Thank you for the opportunity and congratulations to the ABDL team for a great set of execution. Sir, through our channel checks we have found out that, I mean you have been expanding in the western Maharashtra region quite aggressively in terms of your Zoya Jin and art house and it has been doing really well in this region. So going forward, are we looking at. Expanding in our existing, you know, regions or other regions. What is our strategy?
Alok Gupta
So all the five brands that are in the super premium and luxury segment, the game plan is that by end of quarter one, definitely within quarter two, we expand and roll out into the top market which account for almost 80% of the segment. So the we will see a fairly rapid distribution expansion of the super premium and luxury portfolio.
Aman Baheti
Okay sir, so I mean the contribution like now it’s 5050 PNN mass premium. So we can see that going to 60, 40 maybe in FY26.
Alok Gupta
So the 50% salience is in value terms the volume salience is about 40. Right. Your question is will it go to 60 40. I see over the next two years. That certainly is a possibility.
Aman Baheti
Okay sir, thanks. And one question on our marketing spends. So can you give me approximate figure in terms of top line? What is our marketing spend?
Alok Gupta
So our ANP as a percentage of NSV in the PNA segment is about 6% which we plan to expand over the next two years. Hopefully between 7 to 7.5%. 7 to 7.5.
Aman Baheti
Okay, got it. And sir, are we looking at our own tequila brand anytime soon? Because obviously we don’t have a tequila brand right now.
Alok Gupta
It’s certainly a flavor that is of interest to us. We believe that it’s a category that we need to learn a little better. So we are in the process of getting a better understanding of the category. But we definitely see ourselves participating in time to come.
Aman Baheti
Okay, sure. And a question on our blended mall Scotch. So we are importing it for Art house, right? Currently?
Alok Gupta
That is correct.
Aman Baheti
Okay. And I mean for our is there any plan of our own single malt whiskey and that would be, you know, 100%, you know, backward integrated or what’s the plan on that?
Alok Gupta
So as you know we are building India’s first single malt distillery in the state of Telangana where our current distillery is. This distillery will be operative in Q4FY26 and that will allow us to participate in the Indian single bond market by year two thousand and thirty. So we are quite excited about the way we are building the distillery and the product development activity. That we have. So by 2030 we should have our only Indian single malt from our own unit.
Aman Baheti
Okay. And sir, this single malt contains how many grains? I mean it’s barley with or other grains?
Alok Gupta
No, single malt is only made from barley.
Aman Baheti
Right? 100%.
Alok Gupta
Yeah. No other grain is used for single malt.
Aman Baheti
Okay. Okay. Thank you so much.
Alok Gupta
Thank you. Thank you very much.
Operator
Thank you. The next question is from the line of Sanjay Minial from Dam Capital. Please go ahead.
Sanjay Manyal
Hi sir. Congratulation on the good set of numbers. Just understand about Iconic White. You know this brand has grown tremendously in last few years in such a short span of time from the time of launch. So what exactly has been the reason for such a huge success and which states have been contributing to this growth?
Alok Gupta
The brand has been growing across all markets. So any large market there’s the market of up market of Haryana, Telangana. We briefly spoke about Andhra on the earlier question that I had. So across all markets the brand continues to grow. Even in states like Odisha we are seeing significant growth on the brand. So what has happened over a period of time that the brands that are operating in the segment have been there for more than 25 years. And as part of our consumer insighting we got two incredible insights about the fact that they’re slightly younger consumer, they have complete trust in the existing brand but they were looking at a brand that can talk in their own language, in their own code.
And if you see right from packaging design to where the ANP has been designed on this brand, it is keeping in mind the younger consumer. So what has happened in a very large consumer base of the prestige whiskies, it has captured the imagination of the younger consumer. Also we have positioned this brand in the market in between the Imperial Blue and the Royal Stack price point. So it’s able to get consumers both from the deluxe segment and the semi premium segment. And a little bit of research tells us that irrespective of the consumer it gets from Royal Stag or from Imperial Blue which is the deluxe or the semi premium segment, it is a younger consumer who are adopting this brand.
So by and large our insight was that there is a large opportunity with the younger consumer. They are looking at a brand that is designed to meet their expectations, their sensibility and iconic dialogue. Does that job. We are also adding a significant number of new consumers to the category. And since the brand is being favored by younger consumer, it also gets a disproportionate share of those who have decided to come into the category. So that’s really, in our view, the success of Iconic is talking to segmenting the consumer base and targeting a very, very specific set of consumers.
Sanjay Manyal
That’s great. Just one more question on the FTA part. So is it possible for you to quantify the number, what kind of a benefit you will get because of the reduction in the bulk Scotch taxes on Bulscotch and what I understand broadly that because of the bio brands also getting cheaper, there will be an increased competition from these foreign brands. So which brand in this price point basically would be probably at a 1500 to a 3000 or 4000 rupees sort of category, which would be where you will be competing with these foreign brands.
Alok Gupta
So once the FTA is implemented on an annualized basis, we expect duty saving of anything between 75 crores to 80 crores. That’s the quantum of duty that will come down which could Translate to between 175 basis to 200 basis point of margin expansion. So that’s the response to your first question on the bottle product. I think we have to, for us we have just about built a portfolio. Our route to market and our go to market is on the basis that we are new entrants in the segment. What part of this benefit is passed to the consumer and what part of this benefit is retained by companies?
As margin expansion is yet to be seen, we think it will be a combination of both. So once implemented we really get to see to what extent do the MRPs come down, but certainly the MRPs will come down leading to better accessibility. If you look at our portfolio, our Art house blended Malt Scotch will benefit from reduction in the duty and, and will make us more competitive because we are a bii, therefore, we are quite, therefore for us it’s quite favorable for the portfolio that we currently have. However, we’ll get to know a more certain position once it’s implemented and the market leaders do take some sort of a call in terms of how much to pass to the customer and how much to retain.
Sanjay Manyal
Okay, that’s great. Just as one last. If I can squeeze in basically on the ENA sort of inflation, what I’ve seen over the last six, eight months, what I broadly understand, ENA prices have been stable, what exactly is your outlook on the future? If, suppose, if there is an ethanol price increase further in the new season, which will probably start in September. October. Do you think that inflation still sort of can come back from the next year onwards or what is your basically view on the glass prices? Also if you can elaborate a bit.
Alok Gupta
Ethanol can be made from maize, broken rice and full rice. Whereas portable ANA is made only from broken rice. So it really depends on the FCI policy. 19 January they had announced access to full rise to the ethanol industry thereby offering a better margin on ethanol produced out of full rise. We believe that the policy has worked well to meet the ethanol objective. It has worked well for ethanol manufacturers. Therefore we do expect this policy to be rolled forward. And if that was to happen, we expect the current. We expect that the commodity prices will remain fairly stable.
Sanjay Manyal
Okay. Okay, that’s good. That’s all from answer. Thank you very much.
Alok Gupta
All right. Thank you.
Operator
Thank you. The next question is from the line of Kunal Shah from Jeffries. Please go ahead.
Kunal Shah
Hi. Thank you for the opportunity and congratulations on a good set of numbers. My question is on the balance sheet bit if you see the receivables has grown quite a bit to almost 1750 crores. My question is how much of this is the outstanding receivable in Telangana and where do you see this number stabilizing in the next 12 months or so?
Alok Gupta
So Telangana overdues for us is roughly about 400 odd crores. One bit of good news is that from October, so the entire expansion of receivable in Telangana happened till September because the payments were fairly choppy, they were unpredictable. But from October onwards Telangana has been paying the entire industry, including us on time for the monthly billings. So from October we have not seen any increase in the overdue amount from Telangana. So that’s a bit of positive news.
From the month of March onwards we’ve also started to receive partial payment towards the overdue which is also a step in the right direction. So where we are today, do we have a clear roadmap in terms of by when the overdues will get paid? I wish I had a crystal ball through which I could advise you. But the fact is that in March and April, both the months monthly billing plus a part of overdue is being paid by Telangana. And we believe from whatever we understand that this will only get better.
Kunal Shah
Understood. And any other specific reason apart from Telangana for this increase in receivables that we should be aware of?
Alok Gupta
Yeah. No, I think broadly the increase is about 500 crores. Of which about 300 odd crores is. About 300 crores is Telangana. There were some state market, some other government controlled market where year end receivables gone up, but those are now getting paid, those are now getting paid in April and May, nothing thereafter. In addition our sales volume have gone up. So some bit of increase in receivable would happen on natural basis. But I do not think there is any other number that we need to be worried about.
Kunal Shah
Understood, thank you for that. The second question is on finance cost. So if I see, you know in 2024 and even in prior year used to have this large 40, 30, 40 crores of interest cost on delay in payment of statute reduce. Can you let us know what’s the number for this year and what’s that related to and how is that changing?
Alok Gupta
So immediately after the IPO we paid all these statutory overdues which was around 7th or 8th of July last year. Since then we do not have any statutory overdues in our books. Everything is paid on time. Therefore there is no interest cost associated to delay of statutory dues.
Kunal Shah
Understood, thank you for that. And finally, any qualitative comment you would want to make on how all the new brands which you have launched on the luxury and semi premium side in the last one year or so are doing. I know it’s too early for many of them, but any qualitative direction or some guidance which you can give.
Alok Gupta
I think two things I can say at this point of time. One is each of the product has a very unique blend and a proposition. And in an experience driven consumption economy, I think consumers would like to try out newer experiences. Just as an example with Zoya, we have launched our Watermelon gin and we have launched our Espresso Coffee gin. This is basically a key consumer insight. The two big trends are cocktails and sipping. So. So if you were at home, you want to enjoy a cocktail, you take the watermelon gin, put in a nice gin goblet, add a bit of few cherries to it on crushed ice and your cocktail is ready. And the espresso gin is all about taking a shaker which you can buy off Amazon, put in the Zoya Espresso gin, shake it up and put in a martini glass and you can sip it.
So one thing that I think we are extremely excited about is that the blends are unique, the extensions are unique and consumers will definitely give it a shot. Second is on the packaging, be it Zoya, be it Arthouse, I think, which are our own brands, I think we received not just awards, but we’ve also seen qualitative feedback from the consumer. They just love the design direction. On the newer investments that we made on brands like Woodburn. They are proven brands in the startup ecosystem and they will benefit tremendously from our distribution and manufacturing footprint. So those would be my two qualitative comments on brands that we build ourselves and the brands in which we have invested.
Kunal Shah
Understood? Understood. And the last one is on this JV which you have created any sense on when you’ll start rolling out products and brands from that platform.
Alok Gupta
All super premium and luxury brand. Let’s just take a price point of 2,000 rupees and above. So Zoya Woodburn, Russian standard Art House, Kumori. All these brands will be marketed by ABD Maestro. We now have a 50 people team in place to manage the brand, build new experience in terms of mixology and cocktail to focus on key accounts and premium on premise. And from the 1st of April the team is up and running and hopefully we’ll have much more to talk two quarters down the line.
Kunal Shah
Understood. That’s great to hear. Thank you. Thank you so much for this.
Alok Gupta
Thank you.
Operator
Thank you. The next question is from the line of Chintan Shah from JM Financial office. Please go ahead.
Chintan Shah
Hi. So I had two questions. So one is on growth. So can you shed more light on growth specifically from next one year perspective as well as over next three years and probably if you can talk a bit from the volume perspective as well as from value perspective. The reason I asked is because if you look from a volume perspective, right now we have a brand iconic which is largely driving the volume growth. And beyond that in that prestige segment I don’t see any other brand which has been scaling so fast.
And secondly, all the premium segment that we launched solvent recent and I believe from a volume perspective on our base they won’t be meaningful at least from the next two three year perspective. So putting that in context, if you can throw some light on volume and value growth for FY26 and over next three years, that’s the first question.
Alok Gupta
Okay, thank you. I would break our portfolio into three specific segments or price points. Mass premium, where we have our flagship brand officers choice, our focus will continue to maintain its Gross margin of 40% + we all know that the ant spend on this brand is extremely low so it generates a lot of cash for us. Therefore our guidance or the way we are looking at the growth is high single digit. But maintain our focus on the gross margin in the P and a segment. With officers choice blue iconic sterling V7, they are looking at driving double digit growth. The combination of these two will give us a double digit volume growth but about a mid double digit value growth.
One important point, if I can point out something that we spoke about through quarter 2 and quarter 3 is our margin governance model. One exercise that we carried out last financial year was really to look at state brand combination and weed out state brand combinations where we believe that the margins were below the targeted threshold. Therefore we by design took let’s say some volume cut in state brand combination where the gross margins were not in line with the threshold. So that reset was required one time which has been done last year. Therefore a bit of the sluggishness that you are talking about is on account of not just the market condition but also the fact that we took some voluntary cut on volume where money was not being made on the semi premium, sorry super premium to luxury segment.
As you rightly said, these are early days. What we will see is, what we see is since the volume base is very small, it’s a material to talk about growth because the growth will be in thousand percent. But the impact on the value growth we will see by end of this financial year. So if you ask to sum up the guidance on mass premium, prestige and above and super premium to luxury segment, a double digit volume growth with mid double digit to higher value growth. That’s how we are looking at FY26.
Chintan Shah
Okay. And over say three years, basically we try to say that the value growth would be much higher than the volume growth that currently we’re looking at in FY26. Is that a fair understanding?
Alok Gupta
That’s a fair statement to make.
Chintan Shah
Okay, and just one more follow up on this. So in that case are we looking at any more addition and the prestige segment, you know, something like Conic, which can actually drive up the volumes or the focus would be clearly to do more additions. On the super premium luxury side.
Alok Gupta
We have identified two opportunities. One of them is the semi premium brandy. Very happy to share with you. That we have now launched Golden Mist in the state of Karnataka which will then be followed in the other critical southern market. It’s a high growth, high margin flavor within the deluxe segment. And that is something that we’ll stay focused on. And then in time to come we’ll also look at participating in the semi premium vodka segment. But these two launches in the sort of semi premium segment that we are focused on. In addition we have a beautiful brand called Shrishti. It’s an Indian brand with an Indian soul. The. Blend is made with something called Indian Saffron. We know for sure that Indian consumers are now happy consuming, serving and gifting Indian brand. We’re quite happy with the way the product has shaped up. So These are the three brands that you will see in action in FY26.
Chintan Shah
Got it. Understood. And sorry, just one more follow up on this. So iconic. Basically any sense, if you can give what could be the potential for this brand? I mean where could it reach? I mean we are at 5.7 million right now. So what potential does it hold?
Alok Gupta
I’m trying to, I have several responses. I’m trying to figure out which one to give you from where. From the way I see the brand, it has the ability to be a market leader. It’s just a matter of how fast and how soon.
Chintan Shah
Okay? Okay, got it. Understood. And just one last question. That is from a balance sheet perspective. So while you clearly explained on the receivable side, so there is a sharp increase on the inventory side as well. So why would that be? Could you explain that? And lastly if we look at the debt, so we started at 760, then we raised equity, paid up the debt and we are again back to 800 crores for reasons that you already explained. But going ahead over the next 12 months, how do we see the trajectory? Do we expect all this to normalize and we go back to a debt free status or will continue to have a significant portion of debt on our balance sheets?
Alok Gupta
So on the net debt, I think an important point to note is that Our net debt FY25N and FY24 is pretty much in the same range. The important point to note is that last year the net debt of 749crores was all working capital. Right. Whereas the net debt as of FY25 of 766 crores has a portion of working capital but it also has the investment that we made into our CapEx program and acquisition. So I think that’s an important number to keep in back of the mind. So of 766 crores net debt about 182 crores is what we have invested towards capis and acquisition. So broadly if you look at the working capital that is invested in the business is about 580 crores versus the 750 crores in previous year. It is in the presentation it is slide number 12. If you get a time do take a look at it. It will give you a full waterfall in terms of how the IPO proceeds were used, what has been the operating cash flow and how it has been deployed. So the investment into working capital has actually come down.
Chintan Shah
Okay, got it. But just a clarification. What explains the increase in inventory?
Alok Gupta
The increase in inventory is largely in a few Southern depots and one market of north. And we will see this getting corrected within quarter one.
Chintan Shah
Okay. Got it. And just one more follow up. I mean, one clarification. At the end of this year, what kind of minted position should we look at? That’s the last question from. Thank you.
Alok Gupta
Sorry. So one correction that I wanted to make. The inventory I think you’re referring to is our packaging and raw material inventory. This increase is largely towards the scotch that we are buying from a supply security point of view. And this is by design, largely we have a rate advantage and quantity that is available. So that increase is largely related to a strategic buildup on the Scotch inventory that we have in mind. Okay, a new question. Tell me.
Chintan Shah
No, just the net debt position as of what we’re expecting by the end of the 26th. The fundraiser would be largely to take care of that instead of fair understanding.
Alok Gupta
The fundraiser. That enabling resolution. That’s an important point to note. It’s an enabling resolution. We see. We feel that there could be opportunities that come our way and therefore we should be ready in terms of the necessary permission and we will raise the fund as and when an exciting opportunity comes along.
Chintan Shah
Okay. Okay, fine. Thank you so much for answering the questions.
Alok Gupta
Thank you.
Operator
Thank you. The next question is from the line of Pritesh Chera from Lucky Investments. Please go ahead.
Pritesh Chheda
Sir. I have two questions and both on the margin side. So first question is between the 2/4 quarter 3 and quarter 4. If you see the margin movement largely from the other expenses line, despite the fact that the Q4 side of the business is lower. Easy to do with a particular way where how costs are booked in your company. Because these are the first quarterly that we are seeing last three, four quarters. So is it to do with quarterly phenomena in the way the cost of booked?
Alok Gupta
No, it is largely due with the fact that Q3 is a festive year and significant A and P investments happen in Q3 and they come down in. Come down in Q4. Yes, and part of the reduction that you see is related to amp only.
Pritesh Chheda
Okay. Yeah. So it’s the way these costs are booked. Okay, my second question. No, you go ahead, sir. You finish your answer.
Alok Gupta
No, no, I was just saying that that’s largely in line with the. With the. The festive season and the non festive. I was just doing a follow up. Please go ahead.
Pritesh Chheda
No problem. Okay. My second question is you had a. This is on a margin bridge. So earlier in your calls you said that 15% is a margin that we are looking at and that included two expansion items. One is the mix change because of the prestige and above rising in failures. And second is the ENA integration. And over and above that there’s a third change which is coming as a Scotch benefit. So is it fair to assume that up to 15% margin is what earlier two assumptions were there. And the third assumption which get added and expands the margin is Scotch benefit provided it is retained and not passed on. If it is passed on then we restrict the margin to about 15% as of now as a margin bridge.
Alok Gupta
Right. I’ll try and put this in perspective. Our FY25 EBITDA margin is north of 12%. The CapEx program that are currently under build are ENA, PET and Malt. ENA. Partial capacity is running 100%. Additional capacity is under approval. PET plant will be up and running in Q2, FY26 and the Malt unit be running in Q4 of FY26. We expect 100% benefit of this to come by March 27th. Which is roughly 300 basis point coming from these three programs. So on back of an exit of 12% EBITDA margin in FY25 and 300 basis point margin that will come on back of this capex program is where we are projecting a 15% EBITDA. What is not factored into this 15% EBITDA are three things which are covered. One, it does not factor the gain on bulk scotch due to duty reduction. What it does not factor is our improving PNA salience. And what it does not factor is our super premium to luxury portfolio which is at early stage. Does that give you a bridge? How do we get to 15 and not part of 15?
Pritesh Chheda
Okay. Now on the ENA at the time of IPO we had this whole hundred percent own ENA program. So that goes through its implementation in this time frame with the CAPEX or what happens.
Alok Gupta
So with the CAPEX that we have announced we should get to about 66% captive ENA which is one distillery in the state of Telangana and the other distillery in the state of Maharashtra. We need to. We need to have. We need to built another 16 million liters capacity for which you have identified the state where we want to go and the work is on.
Pritesh Chheda
Okay, so that’s how you. So that’s how you mentioned. 60 million liter is awaiting EC and 60 million meter is under million liters under implementation.
Alok Gupta
Exactly.
Pritesh Chheda
Okay. Okay. Okay. This explains a lot. Thank you so much.
Alok Gupta
Thank you very much for your question. Yeah.
Operator
Thank you. The next question is from the line of Harsha from Bandhan amc. Please go ahead.
Harsh Shah
Hi sir. Good evening. Thanks for taking my question. I have two questions. The first one is. If we were to look at the EBITDA per case and directionally, basically I wanted to understand how is Iconic, you know, EBITDA per case versus the company average.
Alok Gupta
So Iconic is still in a in a growth phase both in terms of volumes and in terms of the investments that are going behind the brand. Therefore any guidance on what our current brand EBITDA is will be little out of context. So if I can understand your question better, maybe I can give you a more sharper response.
Harsh Shah
So basically let’s say that okay, I understand that it’s in investment phase. So let’s say gross contribution level, gross profit level, what would be the GP per case directionally of iconic versus the company average.
Alok Gupta
So iconic versus company average. Iconic would be about 3% lower than the company average at point of time. And just to sort of give you a quick peek into how this will correct. So first, as you would recall, we have launched this brand with the Mono carton. How were within 12 months. After the 12 months period is over, which is part of our seeding program, we remove Monocardon. So at some of the newer market like Andhra and Delhi and many other markets got added in the last financial year, in this financial year and thereafter, the mono cartons will remove that will improve the gross margin because that packaging cost will go away. Second.
Harsh Shah
The market, how much would that be? If you quantify that, let’s say the 3%.
Alok Gupta
What I’m doing is I’m giving you three things that will happen that should bridge the gap and get it to company average. The first is going to be removal in a progressive manner. So by end of FY27 we are through with the Monocardon removal. So thereafter all sales of Iconic will happen without Monocartin. The second is the market bottle utilization. The market bottle utilization network sort of matures both in terms of volume which now Iconic has achieved at 5.7 million cases.
And secondly it is in term of developing the supply chain network because these bottles sort of flow from micro consumption point and then flows into a facility. So the market bottle utilization for Iconic would also correct over the next let’s say within this year we should be able to get it to the company average, right? So these two combinations primarily one is market bottle utilization and second is the monocartin. And third is optimization of some fixed overhead. We’ll get it in line with the company average.
Harsh Shah
What can you double click on the market? What we realization and. So what exactly do you mean by that? I mean
Alok Gupta
Essentially means like in the beer industry, you know, a new bottle is rotated. Yeah. So similarly
Harsh Shah
Right. Return bottle that is basically slightly lower compared to the company average. And as basically you get it up probably you will get that to company average.
Alok Gupta
Yeah, you got it. And these three things will get the gross margin in line with the, with the other brands.
Harsh Shah
The third thing you mentioned. I’m sorry I just. The third thing you mentioned was on this front.
Alok Gupta
Some fixed cost optimization.
Harsh Shah
And despite that your EBITDA per case to come back to the company and it would take some time as the investment basically would continue.
Alok Gupta
Yeah. With these three things gross margins will be in line with the, with the other brands. The NSV, the ANP investment, investment to NSV is about 6%. So the brand EBITDA will be in line.
Harsh Shah
And you spoke about the you know, state brand mix. Working on a state brand mix and you know cutting down on the states or brands where it was a bit detrimental. But if you could call out the top three state brand mix for us, what would that be?
Alok Gupta
The top three state brand mix will be the state of Telangana, the state of Andhra Pradesh, the state of up.
Harsh Shah
These will be the three officers choice or choice.
Alok Gupta
Therefore it’s a market leading brand in the state of Telangana. In the state of Andhra Pradesh also up. Second brand which is becoming a big brand, Andhra. We started selling this brand only in the month of December. Making month on month progress. Should hit a million case ARR over the next two or three months. Telangana already doing extremely well. And same is the case with up.
Harsh Shah
Got it. And what keeping question, what would be this quarter’s numbers? Let’s say volume and value. Crore.
Alok Gupta
Sorry, which quarter are you talking about? Last quarter?
Harsh Shah
Yeah, fourth quarter is numbers extra. Andhra Pradesh. What would that be?
Alok Gupta
For Andhra Pradesh?
Harsh Shah
I’m saying that the company level growth is 2021% volume value and volume right at the company level. I’m saying if we were to exclude Andhra Pradesh, what would have been our growth in fourth quarter?
Alok Gupta
Okay, give us a minute to calculate that specific number for you.
Harsh Shah
And until then I mean could you kind of Talk about your capex outlay for 26 and 27?
Alok Gupta
Okay. So the specific response to your question is Overall growth is 21% and without Andhra the growth would be between 15 and 16%.
Harsh Shah
Got it. Thank you. And sir, last bit. On the capex outlay for F20 and F27.
Alok Gupta
Capex outlay?
Harsh Shah
Yeah.
Alok Gupta
So the 527 crores of capex that we’ve announced, roughly 25% has already been invested in FY25. 60% of this will be invested in FY26 and the balance 15% in FY27.
Harsh Shah
Okay, got it sir. Thank you so much.
Operator
Thank you. The next question is from the line of Asha from Boring amc. Please go ahead.
Asha
Hello. So my question was related to QIP proceeds of 1000 crore. How are we going to use that?
Alok Gupta
So ma’ am, this is an enabling resolution. There is no plan to raise this money. Idea is to be future ready. If an exciting opportunity was to come along, we should be able to exercise this option. So as of now it is an enabling resolution.
Asha
May I know we have an IT assessment order. What is that pertain to and what is our stance on it?
Alok Gupta
We have contested the IT order. We’ve been able to get a stay against that order. And we are confident that we should be able to have a favorable outcome.
Asha
And could you please let us know if current Q4 pat is sustainable going forward?
Alok Gupta
Current Q4 pat is sustainable going forward. I think Q4 has one exceptional item of 11 crores at an EBITDA level which is a writeback. And like I was explaining to on the earlier question that Q4 also has a lower A&P spend. So Q4 should not be seen as a reference point for, you know, sort of forward outlook on pat.
Asha
Okay, got it. Thank you sir.
Alok Gupta
Thank you.
Operator
Thank you. The next question is from the line of Akhilesh Bhatir from Ikigai Asset Management. Please go ahead.
Akhilesh Bhattar
Thank you. Thank you for the opportunity. I want to understand the time to market it takes for you to launch a brand and the life cycle behind that. And for you to receive the feedback from the market if the brand is actually working and for you to actually produce more on that brand. So can you please explain me the life cycle behind that?
Alok Gupta
An interesting question. Broadcast. Probably four or five critical phases. One is really a desktop stage in terms of which segment, which price point, what margin, what’s the right to win? What’s the sort of concept that will work with the consumer. It could take anything between six months to a year. It’s backed by research, it’s backed by first hand insighting, it’s backed by getting a better understanding of what we get as that right to win.
The second phase really is packaging concept development where it could take maybe up to another six months, commercial production could take another three months. So pretty much it could be between 18 months plus minus, from an idea to a physical form in which the product is available. The third phase really is actual product testing. In parallel of course we are doing the blend development. So the third phase is really product testing both on blend packaging and in addition communication design and communication testing. So these are three phases.
The fourth one that we follow as a discipline is we pick up two or three markets and we do a prototype launch like we have done for Iconic. Currently Shishti is through as an example with the prototype launch we were selling it in Haryana up and in the market in east. And we like to build what we call a playbook, essentially ideas to make sure that as we scale the brand we are reasonably sure on return on investment. So once we believe that we have a playbook is that when we start expanding into other markets, other co markets which could take depending on the label approval cycle because each state has its own requirement and some states window open at different times of the period could take up to 12 months.
And then the fifth stage really is scaling up the brand so broadly from start to finish. It could be about a three year affair from the time you conceive an idea to the time you actually launch it and then scale it up. So for that purpose having a robust pipeline of new product is extremely important because the market or the consumer would only get to see it when you launch it. But for us to be able to come to that point of launch, it could take up to 18 months.
Akhilesh Bhattar
Got it. Thank you.
Operator
Thank you. The next question is from the line of Ishane Kalochia from NV Alpha Fund Management. Please go ahead.
Unidentified Participant
Hi, congrats on your great numbers. I like to ask about how you intend to compete with the other rising players in the same sector. Example Selaknagar Industries, Piccadilly Agro, United Spirits, etc. And like grow your own market capital.
Alok Gupta
So it’s a very eclectic choice that you’ve taken because each of these companies has a very specific portfolio. As an example is a largely brandy player, operates in south. So we have to think about competing with Tiraknagar only with our brandy portfolio. And we’ve developed a brand called Golden Mist which has just got rolled out in Karnataka and will progressively roll out into other states. We believe that there is a need for an alternate brand in every segment and quite happy with the progress we made on Golden Mist. Picadli on the other side operates largely in the single malt category where we do not have product for now but on back of our single malt distillery that we are building in Telangana we will launch our own single malt. That’s a question for a future because it’s a couple of years down the line before our single malt gets launched.
Diageo of course has a very well diversified portfolio. They operate in prestige whiskies with McDowell’s number one and withdrawal challenge in the premium segment and thereafter the super premium and the luxury segment. As far as the prestige whiskey segment is concerned, we’ve already covered Iconiq. We believe that the mega brands in these segments are more than 25 year old and there is a place for a newer brand and Iconiq is sort of riding on that insight.
As far as the super premium and luxury segment is concerned, the consumer demonstrated consumer behavior here is very different which is about experimentation, which is about trying out a new brand which is looking out for the new flavor. Therefore, consumers are actively seeking newer brands and newer flavors. And to our mind the trick really is to constantly provide newer experiences. And earlier on I spoke about Zoya, that on back of the Zoya launch we also launched a Zoya Watermelon and a Zoya espresso Gin. And we are also working on a couple of very interesting other flavors that will fit into what we call as either the shipping culture or the cocktail culture.
So these three companies would need from a competitive competition point of view, I think the focus will always be consumer backed. Who’s the consumer? What’s the need that we can fulfill, how the brand needs to be designed? That remains a common theme irrespective of what segment we are operating in.
Unidentified Participant
Follow up to that question. Are you, is there anybody that you do recognize as a direct competitor and are you taking any —
Alok Gupta
So the Alcobep category, unlike other consumers. Category is not driven by the penetration PCC code. So when we talk about segment expansion, it is not about consumers who don’t drink to tell them to drink or consumers who drink tell them to drink more. So we have to recognize that the consumption in the Alcobest segment is driven by, you know, macroeconomic factors which are around the social hazard, which is around education, digital literacy and access to social media. So I think these are factors that really shape the market. Therefore, in terms of. More in terms of a question of what we believe the competition is, I think it’s to do with how the society at large is adopting Alcobev as a category. We are seeing some moderation with the Gen Z consumer. It is quality over quantity. And therefore our outlook is in time to come. We need to start looking at value growth as a better measure of growth than just a volume growth.
Unidentified Participant
All right, thank you so much.
Alok Gupta
Thank you.
Operator
Thank you. The last question is from the line of Harsha from Bandhan amc. Please go ahead.
Harsh Shah
Yeah, hi. Thanks for taking my question again today. One broad question. What would be the industry level volume and value growth for fourth quarter in IMFN?
Alok Gupta
Which quarter did you talk about? SAI fourth quarter?
Harsh Shah
Fourth quarter. Yeah.
Alok Gupta
Just 10 seconds before I answer your question. The PNA segment grew just about 2% in quarter four, right?
Harsh Shah
2% in volume, sir,
Alok Gupta
In volume terms and we grew about 32. The overall industry was flat in quarter four and we grew about 19%.
Harsh Shah
Overall. It’s basically popular. Plus P and A put together was flat in terms of volume and in terms of value.
Alok Gupta
Siri does not track value. The industry does not track value. So I hazard a guess, but I think increasingly value should become an important KPI. Internally we have started to measure value with a very sharp focus.
Harsh Shah
Got it. And one last question is for our company for FY25, what would have been the growth for OCW and Sterling Reserve?
Alok Gupta
So OCW, the whiskey, the mass premium whiskey do grew by about 13% last financial year. We did not grow. So we were the same volume by and large. So In a degrowing 13% environment, we were able to hold on to our volumes. And if I may just remind that. We did take some volume cut in markets where we felt that the gross margins were not in line. Therefore, we’re quite happy that in a significant degrowth market we’ve been able to hold on to our volumes.
Harsh Shah
And for Sterling Reserve.
Alok Gupta
Sterling Reserve Degrew a bit. Last financial year though, the segment, the P and A segment had a single digit growth. So that is something that we are working on right now.
Harsh Shah
Okay. And this degrowth is what mid single digit kind of or somewhere in that range or.
Alok Gupta
No, it’s been a double digit degrowth for the brand. But like I said, we are currently working on addressing that gap.
Harsh Shah
Is there some bit of cannibalization by Iconic wise? I mean, in your assessment or that would not be the case?
Alok Gupta
Absolutely. The brand has gone to do 5.7 million cases. It has acquired consumers both from deluxe whiskey segment and from the semi premium whiskey segment. We’ve not done any quantitative research. However, when we are in the retail outlets and we ask a question to a retailer that, you know, where is the growth coming from? Typically our sense is about 80% growth of iconic is coming by people upgrading to Iconic from a lower price point, which is the deluxe whiskey price point. And about maybe 20% is coming from younger consumer of a semi premium segment. So it has tak1en share from all brands, including brands from our own portfolio.
Harsh Shah
Got it sir. Thank you so much.
Alok Gupta
Thank you very much.
Operator
Thank you. As there are no further questions, I would like to hand the conference over to the management for closing comments.
Alok Gupta
Well, thank you very much for your time. I hope we’ve been able to address the questions that you have and we’ll catch a quarter down the line.
Operator
Thank you. On behalf of Antique Shock Broking Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.