Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Allied Blenders and Distillers Ltd (NSE: ABDL) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Jayathirtha Mukund — Head of Investor Relations and Chief Risk Officer
Analysts:
Abhijeet Kundu — Analyst
Abneesh Roy — Analyst
Presentation:
Operator
Ladies and gentlemen. Good day and welcome to Allied blenders and distillers Q4NFY 26 post owning conference call hosted by Antique Stock Broking Limited. As a reminder, all participant line will be in the listen only mode and there will be opportunity for you to ask question after the presentation concludes. Should you need assistant during the conference call, please signal an operator by pressing Star then zero on your touch tone 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
Hi. It’s our absolute pleasure to host the management of Alert Vendors and Distillers Ltd. For 4Q26. Over to Mr. Mukun, 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, Abhijit. Good evening everyone and thank you for joining our Q4FY26 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 EBD Mr. Shekhar Ramanurthy, Executive Deputy Chairman, Mr. Alok Gupta, Managing Director, Mr. Amar Sinha, Managing Director designate and Mr. Ramakrishna Ramaswamy, Chief Financial Officer.
Operator
Now I would like to hand over the call to our MD Mr. Alok Gupta who will give you the summary of the company’s quarterly performance before we open up for Q and A. Over to you Anup.
Jayathirtha Mukund — Head of Investor Relations and Chief Risk Officer
Thanks Mukul. Good afternoon everyone and thank you for joining us today for Q4 and full year FY26 earning Call of Alike Blenders and Distillers Ltd. We are absolutely pleased to report another quarter of strong and consistent performance marking our seventh consecutive quarter of profitable delivery. Post listing FY26 stands out as a defining year for ABD where disciplined execution accelerated premiumization, focus invested and a prudent capital allocation enabled us to deliver record annual profit while simultaneously strengthening the foundation of long term sustainable growth on a consolidated basis.
Income from operation for FY26 stood at 3949 crore registering a growth of 11.5% year on year. We reported highest ever EBITDA of 568 crores a growth of 28.5% over last year. EBITDA of 451 crore and EBITDA margin expanded by 163 basis points to 14.4%. We delivered highest ever PAT of rupees two hundred and twenty crore reflecting the benefits of improved gross margins, premium mix enhancement, operating leverage and disciplined cost management. The above PAT excludes tax expenses which including interest for earlier year of a total of R 45.45 crore.
Adjusted for the same, the adjusted pack for FY26 would have been Rs 266 crore which is 36.3% over last financial year. Packed of rupees 195 crores, our standalone business also delivered its highest ever annual financial performance during FY26. Income from operation grew by 10.4% to 3909 crores while EBITDA increased by 33.4% to 604 crore. Standalone EBITDA margin improved significantly by 267 basis points to 15.5% while PAC grew by 34.1% to 268 crore highlighting the strength and profitability profile of our core operations.
Looking at the overall performance for the year FY26 reflects the continued execution of our future ready transformation agenda. Our well defined four strategic pillars continue to drive overall performance. First, premiumization continues to accelerate with P and A contributing 47.2% of overall volume and 57.3% during FY26. Second, ABD Maestro strengthened our entry into the super premium and luxury segment through our asset line built buy and partner approach enabling us to establish a diverse portfolio across multiple flavor profiles and price points in record time frame.
Third, our backward integration projects progress well and remains on track helping improve supply chain security and structural cost efficiency enabling margin expansion. Finally, disciplined execution, neutral to favorable commodity and packaging cost environment and operating leverage collectively enabled meaningful margin enhancement with gross margin expanding to 45.6% and EBITDA margin improving to 14.4% during FY26. Complementing this momentum is the continued success of Iconic White which crossed significant milestone and recorded sales of 10.7 million cases during FY26 and continues to be the fastest growing millennial space brand globally.
Reflecting the company’s strong financial performance and confidence in the long term growth outlook. The Board of Directors has recommended a dividend of 270% which is rupees 5.4 per equity share of rupees 2 each for the financial year FY26 for the approval of the shareholders at the ensuing annual general meeting of the company. Moving to Q4FY26, we delivered another quarter of healthy consolidated performance supported by resilient consumer demand trends and improved realization across all key markets.
Income from operations for the quarter stood at 1020 crores reflecting a growth of 9.1% year on year and EBITDA increased by 21.2% to a record 182 crores. For the quarter, EBITDA margin expanded from 16.1 to 17.9 highlighting continued improvement in business quality and operating leverage. Growth during the quarter continued to be led by PNA category which delivered strong year on year volume growth of 20.5% reaching to 4.4 million cases. The segment contributed 57.7% of overall sales during the quarter reinforcing the strength of our PNA portfolio and improving mix profile.
We also witnessed progressive transformation normalization in the Telangana during the quarter with improving trade confidence and stabilization in market operation and supporting recovery trends with the mass premium and other segment quarter on quarter volume growth of 5.6% was driven by southern and eastern market. However on a Y on Y basis the segment remained flat. As we continue to prioritize profitable state brand mix optimization from a profitability perspective, gross margin expanded sharply by 480 basis points on yoy basis to 48.2% supported by a favorable commodity and a packaging cost environment along with backward integration benefits.
These gains were partially reinvested towards brand building initiatives across core brands and luxury portfolio as well as trending organizational capability. As a result, the EBITDA margin expanded by 179 basis points year on year basis to 17.9%. EBITDA growth during the quarter was driven by premium mix improvement, favorable input cost, operating leverage and initial benefits flowing from backward integration project. The increase in depreciation during Q4, FY26 and FY26 was primarily attributable to accelerated depreciation arising from reassessment of useful life of certain plant assets including the pet bottle manufacturing facility.
From a cash flow perspective, FY26 marked a significant improvement in operating cash flow generation. Operating cash flow improved sharply to Rs.362 crores and during FY26 driven by strong profitability and sustained working capital discipline, our improved cash generation and disciplined financial management have further strengthened the balance sheet. Net debt to EBITDA stood at 1.7 times as of March 26 comfortably within our stated framework of below 2x. Similarly, net debt to equity remained at 0.6 well below our internal ceiling of 0.758 even during the peak CAPEX phase, we continue to maintain a prudent capital structure by investing aggressively towards long term profitable growth.
Our capital structure continues to provide adequate headroom to support future growth plans. During the year we also made significant progress on our phased backward integration and supply chain optimization capex initiatives. Phase 1 PET bottling manufacturing facility in Telangana was successfully commissioned during Q2FY26 and has already become an EBITDA accretive from Q3 onwards. MOD discrete project in Telangana is expected to become operational during H1FY27. Similarly, Ela Distillery expansion project in Maharashtra is expected to become operational during H1FY28.
The expansion will significantly enhance captive blending and ENA capabilities and improve long term raw material security. Phase two of our strategic backward integration expansion this includes investment across Uttar Pradesh, Maharashtra and Arunachal Pradesh aimed at strengthening bottling and ELA capabilities across key growth markets. These projects are expected to be strongly value accretive and structurally improve our profitability profile over the medium term. While phase one initiatives are expected to contribute approximately to 300 basis points towards EBITDA margin enhancement by FY28, the newly announced phase two projects are expected to provide an incremental margin improvement of nearly 100 basis points by FY29.
EBITDA Maestro continues to play a pivotal role in shaping our long term premium and luxury journey. Through this platform we have successfully established a differentiated super premium and luxury portfolio across whiskey, gin, vodka and rum category through our Asset light built by partner approach. During the year we further strengthened the portfolio with launches such as the Collective, a limited edition 34 year old single malt scotch whiskey. The Collective has had a strong consumer response with over 50% of the allocations already secured through pre order and sale.
This validates the growing appetite for experience led ultra luxury offering in India. We continue to invest in premium consumer engagement, mixology, LED activation, expanding key market, travel, retail and CSG presence, positioning ABD Maestro as a key long term growth engine for the company. Finally, our export business continued to deliver strong momentum during FY26. Export revenue grew by 14.1% year on year to rupees 235 crores supported by asset light and high margin operating model. We also expanded our international footprint significantly from 23 countries to 36 countries during the year.
However during the quarter four exports were partially impacted by geopolitical development and war related disruption in select international market. As we enter FY27 the ongoing trend of premiumization continues on the back of growing consumer preference for high quality and experience driven consumption. We believe this structural trend will continue to support our premiumization journey and help us build scale with value. Accordingly, we remain sharply focused on driving premiumization led value growth and consistently increasing the salience of our T and A portfolio.
At the same time in Mass Premium portfolio our focus remains retaining market leadership in Whiskey segment in terms of volume and gross margin and continue to innovate to expand market size. In addition, we continue to see encouraging opportunities emerging from relatively under penetrated premium channels such as CSB and Travel Retail. During FY26 we secured CSV approval for key brands including iconic Sterling Reserve B7, Chiron and Jolly Roger RA. This strengthens our presence in one of the industry’s largest and most profitable channels with an estimated industry size of 12 million cases annually.
Going forward we expect CSG to become an important growth lever particularly for our prestige and our portfolio supported by increasing premium brand acceptance with wider channel penetration. We also strengthened our presence in Travel retail channel through ABD Microsoft with launches across Bengaluru, Delhi, Mumbai and Lucknow International Airport. We believe travel retail will continue to play an important role in enhancing premium brand visibility, engaging affluent consumers and supporting the global positioning of our luxury portfolio amongst both domestic and international travelers.
Somebody wrote on a few key brands Officer’s Choice Whiskey For Officers Choice Whiskey, the focus is on stabilizing performance through brand refresh and improved market relevance. Efforts are centered on strengthening the consumer connect, enhancing visibility and selectively investing in key markets. The objective is to arrest decline while enabling gradual recovery and retention. Also in certain high volume key southern markets of Telangana and Haiti, driving growth at value price point in the Whiskey category to cater the consumer demand.
Additionally, as highlighted in our Q3 FY26 earning call, we see a compelling opportunity in Andhra Pradesh Mass Premium Brandy segment, a large 12 million case market where ABD had limited prior presence. With necessary approvals now in place, we have commenced participation with our flagship brand Officers Choice Brandy in this attractive and high growth segment which is expected to contribute meaningfully over the medium term. Through a combination of above, we expect Mass Premium and other category to grow by low to mid single digit.
Now in our Prestige and Above segment we remain focused on driving aggregated market share in the Whiskey category through our three millennia brands Iconic White, Officer’s Choice Blue and Sterling Reserve B7. We expect to maintain the growth momentum in Iconic White through further penetration across key market and expanding in CSD and international markets as well. The approach on Officer’s Choice Blue is anchored on broader brand reset to restore salience and competitiveness in the Deluxe segment.
This includes strengthening brand queues, improving visibility and driving consumer reapplazel. The focus remains on rebuilding consideration, accelerating recovery in core market. As regards serving as a B7, the strategy is focused on reinforcing its premium positioning and improving brand momentum. Marketing efforts are directed towards enhancing consumer engagement, strengthening brand salience and driving relevant across key consumption occasions. This is expected to support steady performance within the prestige and above segment.
We are also in the pipeline to launch a new vodka offering in the P and A category to further strengthen our participation in the large volume high growth white spirits category. Through a combination of above we expect PNA category to grow at high teens by FY28. For AVD maestro FY26 was a year of establishment while FY27 will be the year of growth and market scale up. We also remain focused on expanding across key markets, strengthening presence in travel, retail and CSV channel, scaling consumer engagement and accelerating portfolio visibility across luxury and super premium categories.
We are evaluating the launch of additional Scotch offering and further variants across established brands, leveraging improving market access opportunities under the FTA framework. Overall we expect the top line growth at a consolidated level to be in the range of mid to high teens at the backdrop of higher investment in further scaling up iconic wine and SB growth of the other three millionaire brand and establishment establishment of super premium to luxury portfolio of ABD Maestro. Together these initiatives provide us confidence of delivering mid teens top line growth in line with our stated guideline as regards our EBITDA outlook.
The EBITDA will be supported by above and above stated top line growth momentum and further aided by benefits from backward integration initiative and potential upside from upcoming UK FTA alongside expected Telangana price increase. These gains will be partially offset by rising inflationary environment, ongoing geopolitical uncertainty impacting input cost, incremental ESOP charge which was not applicable last year and continued investment to investment behind our brands through calibrated marketing and AMP spend to support long term growth.
From CapEx perspective we are focused on disciplined execution of strategic investment in EBITDA iterative backward integration projects. We continue to maintain disciplined capital allocation and expect leverage metrics to remain within the company’s stated guardrail on an annualized basis through the CAPEX cycle. With the integrated value chain, disciplined execution, prudent capital allocation and increasing consumer engagement across categories, ABD is well poised to deliver long term profitable growth and sustainable shareholder value.
Thank you for your patience. Listening over to your booker so we can start the Q and A now.
Questions and Answers:
Operator
Thank you ladies and gentlemen. We will now begin with the question and answer session Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are request to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question comes from the line of Amnesh Roy from Noama Wealth Management Ltd. Please go ahead.
Abneesh Roy
Yeah, thanks and congrats. My first question is on the near term margin. FY26 was a very strong year in all parameters and in H2, FY27 you will see the UK FTA benefits kick in. And if you could elaborate on where is the Status Currently, is Q2 also possible or we should build in from H2 only? Why I’m asking. This is clearly glass bottles. There’s a clear inflation. The beer companies highlighted this quite clearly. And now petrol diesel hike will keep happening which means distribution cost for every company will go up.
FNPG companies have taken around 4 to 5% hike. So if you could tell us any price hike you’re getting from any state and how do you see margins? You discussed that in some detail but if you could clarify H1, how do you see the margin?
Jayathirtha Mukund
Thank you. Avnish. I think if you were to look on what could positively drive the margin you already covered, FTA basically, as we understand, Q2 looks like a distinct possibility that the FDA will come in place. So that’s a tick. The second important upside will come from Telangana price increase. As you know, the committee has already been formed and they have requested all marketers and manufacturers to provide necessary details in terms of what price increase is required. This is a very important one for the industry, especially for us, given the fact that it’s a very, very large market for us and we’ve got a very, very large base.
So this will not just incrementally impact margins but significantly impact margins. The third is that in many markets announcements have already been made and wherever it was possible, the industry, including us have taken the price increases. So that third one. So these really are three things that are sort of common to environment. The fourth and more importantly for us is our CAPEX cycle. If you would recall our guidance was that by FY28 we see about 300 basis point improvement in our gross margins.
And your question is limited to FY27 but just to conclude and by FY29 an incremental 100 basis points. So these are three or four areas where we believe our margins will have a positive kick up as Regards the geopolitical related inflationary pressure for time being our assumption is that this issue will resolve over the next month or so and some bit of correction and normalcy will come in the market. So our view is that if this issue was to resolve over the next couple of months we will see some short term pressure.
But overall for FY27 we should be able to by and large deliver margin no different than FY26.
Abneesh Roy
Sure that’s helpful. One follow up on this is in Telangana that price hike you think that can come in the near term and in Karnataka I had a specific question. The number of slabs have been reduced very sharply and alcohol content and taxation there is some level of linkage. Is it negative for officers choice in any way or and do you see opportunity in some of the other brands but slight negative for officers choice in Karnataka?
Jayathirtha Mukund
I think Karnataka we have to keep in mind that the policies yet to be implemented therefore drawing any conclusion at this stage may not be prudent. Having said that if the policy was implemented in the manner that it is currently outlined or discussions are on, definitely an up for the PNA segment. We are seeing iconic doing very well in the state of Karnataka and therefore it could get a hockey stick opportunity in Karnataka. We do expect moderation to happen in the lower slabs and if that moderation takes place we believe for a brand like Officer’s Choice it could be neutral to positive.
Having said that it’s a very very small market for us. I mean we put together two on officers choice maybe about 300,000 cases annually. Therefore the bigger opportunities in the PNA segment but the policy is yet to be implemented. As far as Telangana is concerned I think our view is a bit conservative but optimistic. We are of the view that the price increase will definitely come through. Whether it will happen in the next two months or not is not the way we are looking at. We are hopeful that in Q2 sometime this price increase should come through but better to plan from an H2 perspective.
Abneesh Roy
Your last quick question and I’ll end there. So my question is to Amar Sina. So firstly in terms of his role and experience, obviously fantastic role and experience at Radico, White and Mackay. I wanted to understand his initial thoughts on Allied Blenders and what will be his long term vision and how does the leadership transition happen, Any bifurcation in the role in the near term and when does the transition happen.
Jayathirtha Mukund
So thank you for the question. I’ve obviously joined ABD Health with a lot of optimism because as my friend just mentioned Alok has already set the ball rolling for the company to move to the next level. But I see great opportunities in this company. Why? Because it is at probably the same stage as it was as Radico was when I joined them 10 years back. So we have a great set of brands in AVDL with oc, OC Blue and Iconic is the fastest growing brand in the world today and of course B7. So there are four millionaire brands which itself is an asset for the company.
Besides that, ABDM has launched premium to luxury brands, 10 of them and I believe that since they have launched products in every category and price point, hopefully most of them will fructify and do well. So it’s the time right now for the next three years is for me to consolidate and grow the ABDM brands and at the same time nurture brands within the ABD setup and take them to the next level. Iconic is one product which I am hopeful is going to play a major role in my entire initiative because it is in the segment which is a 70 million plus market and I think it has aggressively moved into this space and is vastly gaining market share.
So this is one product that I am winding on. I would certainly like to. We would certainly like to revive Officer’s Choice Blue. You can see the new face of officers choice in Q2 that will add to the growth momentum of the company. Officers Choice I personally believe has a great brand equity, the mother brand somewhere. This segment has taken a beating in the last couple of years but as far as we are concerned we still have more than 40% market share and with some very strong markets like Telangana, mb, Andhra, Rajasthan, I believe it’s time to strengthen these markets with Officers Choice again with a new look.
So I think these are as far as brands are concerned as far as the next three years are concerned. I have divided my task into a couple of cohorts. The first one I said is top line and portfolio build up which as far as brands are concerned I have talked about. We see a revenue growth in the next three years to reach high teens. The premium and above segment, I believe that it should cross the 50% mark as far as volume is concerned and as far as value is concerned it should be between 70 to 75% mark.
We have. Okay, so as far as we are concerned that takes care of the top line and portfolio buildup. The next one is backward integration benefits which means optimization of infrastructure. One ENA. We have initiated projects to produce ENA which will take care of 100% of our captive consumption and in the next three years. We need to make sure that the growth takes into account this factor and helps us achieve utilization of the ENA capabilities that we have. So. So I’m not finished. I’ll just complete it quickly.
We have initiated projects of producing 4 million litres of malt at Rangapore and obviously my objective is to have MALT consumption used for our own products in the premium categories and at the same time over the next three years launch our new single MALT in the AVT portfolio. As far as the PET plant is concerned, we have commissioned a project which takes care of our 70 to 75% of our requirement. As you know that the normal regular segment of in the Alco PEP space is very huge. So we will make sure that this consumption, the production is used for our captive consumption and that brings down our cost substantially.
The third cohort would be margin enhancement from a level of 45%. It would be my endeavor that over the next three years we take it to 48 to 50% because gross margins in the ALCOPEP space in India are still very low and I think there’s huge potential. And with the CAGR growth expected to be in excess of 8 to 10% in the years ahead, this should be a distinct possibility. Premium migration is the name of the game. EBITDA margin, hopefully with a 40, 50% gross margin, I think should cross the 20% mark easily over the next three years.
The return on capital, which is a prudent capital allocation that I see should be in the region of 25% over the next three years. So that’s all.
Abneesh Roy
Thanks a lot. That was very detailed and a lot of insights. So that’s all from my side. Thanks a lot.
Jayathirtha Mukund
I think just to answer the second part of your question on transition, I think we are already at a fairly clear stage of transition and hopefully should announce it within this quarter and I think things are progressing very well.
Abneesh Roy
Thank you.
Operator
Thank you. The next question come from the line of Nitin from HDFC securities. Please go ahead.
Abhijeet Kundu
Thanks for taking my question. Some of the question got answered in a detailed update from Amazon. My first question pertains to PNA volumes. Congratulations on another year of robust growth in iconic. I’d like to know the aspiration for the next year and in terms of you can help us understand like how many change the brand is present and how many states we are aspiring to go in. FY27
Jayathirtha Mukund
Nitin, thanks for being on the call. So your question is not clear about the state, if you can repeat. Thanks very much.
Abhijeet Kundu
Yeah, I just want to Understand like iconic has grown 88% this year and what is the aspiration we have for 27 and also based on like how many number of states we are present and what is the plan ahead like how many more states it will go into.
Jayathirtha Mukund
Thank you. Thank you Nadin. So from a distribution footprint point of view, we have a hundred percent distribution in the domestic market, be it government market, wholesale or retail market. We are present across all states in the country. We have been able to get approvals for Iconic in CSD channel which is a very large segment and the billing has started. So we are very happy because CSG becomes another avenue for growth. In addition, we are currently exporting Iconic to six countries. We believe this footprint could multiply on an accelerated basis largely because of the repeat orders that we are getting.
So the growth of the brand will continue to come from domestic CSD and international market. Rather than answer your question of what we expect the brand to do on FY27 which interestingly is already running at about a 12 million plus ARR, I think our aspiration is that we believe truly that Iconic can be a market leader brand and how quickly we can get there is really what keeps us excited.
Abhijeet Kundu
So that’s very good. And second in terms of this ABD maestro’s performance for FY26 and your aspiration for 27 and how is the brand available in on trade off trade.
Jayathirtha Mukund
So Abd Maestro Buy and Large is at a stage where they have the core portfolio ready. We have 10 very interesting differentiated brands. In addition, we shall be adding two more brands to this portfolio. So I think they are through the portfolio consolidation. It’s a 70 member team now which is working at ABB Maestro largely looking at key accounts. The brands are now available in about 13 states as we speak exiting March 26 and the further expansion is planned during the financial year. Since these are super premium to luxury brand, the focus is also on travel retail and we are currently available in four travel retails and more to come.
And we’ve also started shipping these brands into some of the international markets. So in FY27 we will see two new brands roll out into at least 10 more domestic markets. Expansion of travel retail and expansion of the international for Prince of X Energy. The game plan for Abd Maestro
Abhijeet Kundu
And what is the AR for this ABD Maestro portfolio?
Jayathirtha Mukund
The ARR the next year. The next year outlook. Well, we’re hoping to hit essentially if not higher in terms of top line.
Abhijeet Kundu
Can you repeat that? I didn’t get it. I’m
Jayathirtha Mukund
Saying as far as Abd Maestro is concerned they are hoping to cross 100 crore mark soon in terms of annual revenue.
Abhijeet Kundu
Okay.
Jayathirtha Mukund
The ideal season is all I’m saying. We are we’ll hit a century if not higher.
Abhijeet Kundu
And last question pertains to this on net debt to equity like seems to be stretched in FY27 because of the accelerated capacity are doing. Do we have the flexibility to cross the maximum ceiling or will we will do the phase sort of expansion so that ratios are within limit.
Jayathirtha Mukund
We are quite committed our entire capex investment will be a combination of internal accruals and borrowing whenever required. But we do not intend breaching these covenants at all.
Abhijeet Kundu
Sure. That’s all from my side. Thank you and all the thank
Jayathirtha Mukund
You.
Operator
Thank you. Our next question comes from the line of Mehul from JM Financial Ltd. Please go ahead.
Abhijeet Kundu
Hi sir, thanks for taking my question. My first question is obviously on your overall sales growth guidance of mid teens and PNA sales growth guidance of close to high teens. Now if you can for the PNA sales growth while you did allude to how Iconic will grow and obviously to some extent add Maestro will be in the scale up mode in FY27 but X of iconic and exof led Maestro we do have OC Blue and Sterling era. I just wanted to understand what are the issues, what is the issue with actually OC Blue and Sterling Reserve and how do you see these brands playing role in FY27 growth?
Jayathirtha Mukund
All right, thank you very much. Let me just also add to the mix a bit about Mass premium. So in addition to the point that Amar made that we are doing, we are trying to do a few things. We have now approvals for OC Brandy in the state of Andhra and we see another millionaire brand in making in OC Brandy in this financial year. So I think that’s something that we are excited about again. So I just thought I’ll add that to the mix as far as Iconic is concerned. I’ve already sort of responded to Nitin’s queries so that gives reasonably good view to you.
ABDM brand I think is an interesting point that we keep making that as we keep scaling up ABDM portfolio for 1% volume contribution that comes to ABD it translates to roughly 9% value growth. So when we’re talking about our mid teens value growth I think we have to keep one thing in mind that ABDM will not necessarily move the volume growth leverage but it substantially impacts the value growth we want as regards OC Blue and SRV7 essentially both these brands are now more than 10 years old. They are operating in highly competitive segment with strong number one and two brands.
I think now that we are able to provide right amount of A and B capital to these brands combined with newer packaging. I think all we have to do is to address the issue of represent this brand to the consumer, put the right amount of amp so the brand is on top of mind and it drives back sales. So this is one agenda point that is going to keep us busy this year.
Abhijeet Kundu
And you think that the decline will get arrested for these two brands in FY27 and they’ll be back to positive growth trajectory?
Jayathirtha Mukund
Yes. So the marketing program that we put together on SRV 7 we first experimented in some of the some of our key markets and which is giving us enough confidence. Not only we are able to arrest the growth, we are able to bring in growth of low single digit. So we are able to see that the marketing. The idea was that instead of just putting amp money in one go like a bull in China shop approach, let’s make sure that we test that what we are doing on the brand is actually delivering. Now that we are satisfied that the marketing program that we put on SRB 7 indeed not only growth is also able to bring some growth back.
We are happy to contribute a larger AMC sum towards the brand. OC Blue is a very interesting brand because it’s a regional powerhouse brand. So the focus is not in phase one. The focus is that in the pockets of strength. How does it get back to its leadership position and then the opportunity of rolling out in some of the other markets. I think a point that Amar has made in Q2 we are rolling out perhaps a best in class packaging, never ever seen packaging on OC glue. And we are hopeful that the consumers will love it.
Abhijeet Kundu
And so your guidance on the margins and you said that in FY27 you should be able to at least maintain the margins. You are saying this with respect to Q4 margins or you are saying that you would like to your EBITDA margins will be closer to FY26 overall. EBITDA
Jayathirtha Mukund
FY26 overall margins.
Abhijeet Kundu
Okay. And so okay, you are not looking at. I mean this is like a base case assumption that there is no. I mean expansion won’t be there in FY27 or this is a conservative estimate that you know, FY27 won’t see a bit of margin expansion over FY26.
Jayathirtha Mukund
It’s neither conservative. I think the way to look at is when we look at the overall numbers we will see in Q1 and early parts of Q2, some stress on margin on account of West Asia work. As we get into Q2 and X2, three or four things are going to happen. FTA should kick in the Lingala pricing, we should kick in the Capex benefit should kick in, the season should kick in. So what we’ll see is somewhat of margin contraction in Q1 early Q2. We then will see margin expansion happening and as we’re exiting the year we will see through further margin expansion.
So the guidance that we are giving is that the FY27 overall margin we should be hold on to the FY26 if not better it. So that’s the way we are looking at it. Could it be better? The answer is, you know, the answer is obviously that’s the endeavor but that’s the base comfort that at overall level FY27 margin will be equal to FY26 margin. And if this war was to sort of wind up quickly then we could see even a better position emerging.
Abhijeet Kundu
Understood. And on the ESOP chart that you mentioned, what is the kind of chart that one can see in SR27?
Jayathirtha Mukund
I think on a quarterly basis you could see a number about 5 to 6 crores. And
Abhijeet Kundu
Last question of ABD master, obviously you did allude to 100 crore kind of revenue guidance for FY27. But how should one look at the profitability of this portfolio? Not from an FY27 perspective but let’s say from a two to three year time frame when do you see this portfolio break even or Is it or 100 crore you will see a break even. Any thoughts on the profitability of this portfolio?
Jayathirtha Mukund
Sure. I think the way we had put together the three year plan for a Mini Maestro was that year one it’s going to be EBITDA negative which you can see in the numbers we will target towards CM2 neutral which is the business being able to invest back in the brand from its own internal accrual. So we’ll try and get to as close to a CM2 neutral and in year three it will become a CM3 or EBITDA neutral company. That’s our three year outlook. So the idea is to drive the top line with some clear financial margin margin guidelines in terms of go from CM3 negative to CM2 neutral to CM3 neutral.
So that’s really the way we are looking at it.
Abhijeet Kundu
Understood. Thank you so much sir. That’s all from my side. All the best.
Jayathirtha Mukund
If I could just add one more point. Nehul, I think we’ve not spoken about it, you know our bottling unit that we are planning to put in up, you know we have fairly large volume base there. Now the 27 rupee franchise fee will not be applicable. This will happen sometime in H2. So if you can just multiply 27 rupees into the portfolio we have that’s incremental margin on a brand like Officer’s Choice which is going to just change which is going to change favorably the overall margin position. So I think I’m just trying to maybe be repetitive.
We will see some margin contraction Q1 early Q2 and thereafter we should see margin expansion and overall delivering an FY comes I think Amar wants to add.
Abhijeet Kundu
So
Jayathirtha Mukund
The
Abhijeet Kundu
UP distillery and
Jayathirtha Mukund
Working plant that we plan to put is going to give us substantial leverage into the margin accretion. And as far as brands are concerned UP we will definitely as we said, as Anok said that we gain the benefit of 27 rupees franchise fee. And today we are the second largest company in UP. It’s happened very very quickly and we will get this franchise duty benefit on this large volume 1, 2 sometime next year we will also look at adding more brands which will add to the portfolio and profit margins.
Thank you Mehrun.
Abhijeet Kundu
Understood. So just to summarize while you know while 27 first half might have some pressures but FY28 you are pretty confident at least you have the right levers to get that 300bps expansion that you have been that you are targeting.
Jayathirtha Mukund
Mehul, if you recall we have increased our guidance we had earlier our guidance was 17% EBITDA margin by FY. If you would notice we have increased it to 18% and we do stay with that.
Abhijeet Kundu
Great sir, thank you so much for this.
Operator
Thank you. Our next question come from the line of Dheeraj Mirc from Jeffries. Please go ahead.
Abhijeet Kundu
Yeah. Hi, good evening sir. My first question is on gross margin expansion. So the 300 best gross margin expansion we have seen or roughly 300 crore of gross gross profit expansion, what amount would be because of backward integration and what would be because of the raw material price benefit or let’s say price hike
Jayathirtha Mukund
For the current financial year. As you know that only the PET unit by and large is operational and the margin expansion on account of that would be about 30 basis point or so. Right. And balance is purely on account of price increases, control on our trade spend and of course ongoing focus on the state branding. So this is reasonably sustainable. And as the project keeps kicking in the margin we keep on expanding. Got it.
Abhijeet Kundu
Some of the very, very, very quick questions are what are the view from Telangana? Now
Jayathirtha Mukund
Do you want to share all the questions with me while I pull the information out?
Abhijeet Kundu
Got it, Got it, yeah. And one is that the Iconic Wild Growth is phenomenal, no doubt about it. But when I look at the price point of O.C. Blue and sterling Reserve, which is very close to Iconic Light, I know the product positioning and everything is quite different. But in your sense, does it cannibalize Iconic White growth? Cannibalize growth of Sterling Reserve B7 and OC Blue.
Jayathirtha Mukund
Okay, so let me respond to this. See, Iconic White interestingly operates at a price point between equal to Deluxe and somewhere higher than Deluxe. So it’s stable to get consumer both from the Deluxe segment and the prestige segment. That’s about 120 million cases. One thing that whenever we are in the retail outlet, we talk to our retail partners and we ask them what is the source of growth. They consistently reaffirm that Iconic White continues to grow and get share both from Deluxe consumer and from the prestige consumer.
But they also qualify it is a younger consumer. So I think that is very heartening for us because we are adding about India is adding about 12 to 13 million consumers of legal drinking age of which some of them will take informed choices and then they will look at what is trending amongst the youngsters, then the brand Iconiq should get disproportionate share versus the other brands. So that’s really the growth engine of Iconic. To your question, that is it taking shares away from SRB 7? It is taking share away from all brands operating in that segment, including SRB 7.
So therefore the way we look at it is that if the segment is about 120 million cases OC Blue, Iconic and Sterling B7 put together, right, we are looking at about 1820 million cases. And this is 20 million cases of 120 million cases segment. And in the earlier speech I said that we are looking at a strategy which is how through a combination of three brand and very specific, perhaps geography led initiative, how do we continuously get higher market share from this 120,000,000 K segment? There is bound to be some.
Abhijeet Kundu
Yeah. So just from the salesperson perspective, when he goes to the market and all, let’s say if he is getting high volume from Iconic, does it. Let’s say he’s an indifferentiation for the salesperson to push OC Blue versus Iconic White versus Sterling Reserve.
Jayathirtha Mukund
I think fundamentally this is part of our entire budgeting process which happens at a salesman level. So at the start of the year we would know at each salesman level what’s the market potential, what’s happening, the segment or the competitive intensity. So the targets get agreed at a brand level. Therefore every TSP is aware that what is the target that has been agreed to. The entire incentive speed structure is aligned to those targets. So I think there is honestly great amount of clarity in terms of what needs to be driven.
Which brand needs to be driven in what market. Like I said, ideas to look at overall aggregate shares.
Abhijeet Kundu
Yeah, you are talking about Telangana
Jayathirtha Mukund
Q4FY26 over Q3FY2026. We are seeing reduction both in the overall receivables and in the overdue receivables.
Abhijeet Kundu
There’s
Jayathirtha Mukund
Nothing pending from the previous year which is from the previous last two years which is 524, 2425. There’s nothing pending. They have cleared up the news and very soon the balance which will also be clear.
Abhijeet Kundu
Got it. Got it. And sir, my last question is very broad. On premium category strategy. Let’s say we have been quite aggressive on premium entry level of PMA and mixed prestige segment. While our product innovation or let’s say any pipeline to launch in premium strategy where many people, let’s say market leader are quite aggressive in expanding that market.
Jayathirtha Mukund
I’m going to request Amar to take this question to do with future. I think he’s best positioned to share his needs. Okay, so can you just repeat the question once?
Abhijeet Kundu
So in premium segment where let’s say Signature then Blender’s Pride and then recently Radico has launched Morpheus Whiskey. In those segment many action has been taking place while as a company we are not seeing any product launches in that segment.
Jayathirtha Mukund
Okay, so let me say that that’s an important segment. That’s an important segment of more than 20 million cases. And there have been fairly high degree of success that’s been seen with some new brands that have entered. So we recognize the potential of this space and we are also working on a premium brand and we hope to launch it in very soon. I would say in H2 you will see the launch of a premium brand from the Nvidia portfolio.
Abhijeet Kundu
Okay, thank you very much and all the best for future.
Jayathirtha Mukund
Thank you. Thank you.
Operator
Next question comes from the line of Karan Kamdar from Choice Institutional Equities. Please go ahead.
Abhijeet Kundu
Hello sir. Congrats on a great set of numbers yet again sir. While near term margin presence is explained quite well. What I wanted to know is that how are we planning to build into the luxury portfolio and how far out Would you see single malt coming out from our end like a proper premium single malt?
Jayathirtha Mukund
Yeah. So I think over the next three years we do see a single malt being launched from our portfolio. We are working towards it and it’s too soon to share any further details on it, but we are conscious, you see, we are setting up a malt plant which is going to be quite big in its own way. It’s a 12 KL plant and hopefully you will see in the next three years a good product coming out.
Abhijeet Kundu
Okay. Okay, sir, any plans to sort of capture the 3000, 4000x Maharashtra price market? As I understand that is a huge market with great margins. So any, any color on that, that side of the market. That is what I understand
Jayathirtha Mukund
You’re talking about 3,000 to 4,000 consumer price.
Abhijeet Kundu
Retail price. Yeah, retail.
Abneesh Roy
Retail XRR.
Jayathirtha Mukund
Yeah. So first of all, as far as we are concerned, we already have brands within the ABDM portfolio that’s going to be playing in that price segment in Maharashtra. We’ve got Woodburns, which we are going to promote aggressively. Now we’ve launched an Irish whiskey which is ours, that we will promote aggressively. There’s a designer whiskey Yellow that is close to that segment that’s been going to be promoted aggressively. And sooner or later, of course, ABD from its own portfolio will probably explore launching a brand as well.
Abhijeet Kundu
Thank you so much. Thank you for the opportunity.
Jayathirtha Mukund
Thank you, Kauram.
Operator
Thank you. Next question comes from the line of costume. Powerskar from ICSE Direct. Please go ahead.
Abhijeet Kundu
Yeah, thanks for giving me the opportunity and congrats for a good set of numbers. Sir, I have just one broader question which I want to ask about the Prestige and Above brand. So now if you look into the segment, 16.9 million Christmas volumes, what we actually FY 26 out of that 10.7 million cases have been achieved by Iconic. So would like to understand like once Iconic attains such a scale, which other brands would you like to grow? You know, parallelly like Iconic, which can be a millionaire brand over the period of time.
I’m not asking from one or two year perspective. We have done lot of launches in the recent past. So you know, we must be having some sense that this brand can, you know, attend such a scale and can be a millennial brand for us and can help us to achieve that, you know, whatever we are targeting in terms of prestige and above, you know, consistently growing in terms of volumes and also in terms of contribution.
Jayathirtha Mukund
Thank you. The segment that you’re talking about, actually of the 420 million cases is about 160 million cases. 120 million cases is whiskey and 40 million is non whiskey, largely brandy and vodka segment. So our approach in the 120 million case segment is to leverage iconic SRV7 and OC Blue and to aggregate drive market share year on year. That leaves an opportunity in 40 million cases which is non risky, which is brandy and vodka. And I think Amar has already shared that. You know, we are planning to launch a deluxe vodka.
We already have under a market prototype a brandy. So looking into medium and long term, the aspiration is to build a successful prestige brandy and a prestige vodka because that segment is now voluminous 30 to 40 million cases. So that we see as the next phase of growth.
Abhijeet Kundu
Okay, okay. And I have one booking this year. Our inventory days have gone up. So any particular reason for it?
Jayathirtha Mukund
You’re talking about increase in inventory? I think one large. There are two big drivers there. One is that we have done some proactive buying of scotch. Keeping in mind what’s happening to the rupee depreciation against pound, we’ll still get the duty benefit because we are storing everything under FTWZ so we face the duty at the time of rebonding. So that’s one reason. And ABD Maestro are high NFC product and they are made in smaller batches. So these are the two reasons why you would see an increase in our inventory.
Abneesh Roy
Thank you and all the best.
Jayathirtha Mukund
Thank you. Thank you Kauster very much.
Operator
Thank you. Ladies and gentlemen. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. Reminder to all the participants. If you have a question you may press star and one. As there is no further question from the participant, I would like to turn the conference over to management for the closing remarks. Over to you.
Jayathirtha Mukund
Thank you very much. Thank you very much for taking the time out. I know it’s been a busy day for you. You have other calls to jump on. So really appreciate your time and look forward to you guys joining us back for our next quarter.
Operator
Thank you.
Jayathirtha Mukund
Thank you
Operator
Ladies and gentlemen. On behalf of Fantix Drug working, that concludes this conference. Thank you for joining us and you may now disconnect your lines.