Fratelli Vineyards Limited (BSE: 541741) Q4 2025 Earnings Call dated May. 30, 2025
Corporate Participants:
Gaurav Sekhri — Chairman & Managing Director
Aditya Sekhri — Director
Hemant Arora — Chief Business Officer
Rajesh Garg — Chief Financial Officer
Analysts:
Priya Sen — Analyst
Girish Kumar — Analyst
Chetan — Analyst
Janvi Shah — Analyst
Smith Gala — Analyst
Amit Mehendale — Analyst
Deepesh Sancheti — Analyst
Rohit Ohri — Analyst
Unidentified Participant
Madhur Rathi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Fratelli Vineyards Ltd. Q4 MFI 25 Earnings Conference Call hosted by Coindia Advisors. As a reminder, all participant lines should be in the listen only mode 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 Start then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms. Priya Sen from Coindy Advisors. Thank you. And over to you, Ms. Senior.
Priya Sen — Analyst
Thank you, Ranj. Good afternoon everybody and welcome to Fritelli Vinyas Limited earnings conference call to discuss the Q4 and FY25 results we have on the call, Mr. Gaurav Sekri, Chairman and Managing Director. Mr. Aditya Sekri, Director, Mr. Rajesh Garg, Chief Financial Officer and Mr. Hemant Arora, Chief Business Officer.
We must remind you that the discussion on today’s call may include certain forward looking statements and must be therefore viewed in conjunction with the risk that the company faces. May I now request Mr. Gaurav Sekri to take us through the company’s business outlook and performance subsequent to which we will open the floor for Q and A. Thank you. And over to you, sir.
Gaurav Sekhri — Chairman & Managing Director
Hi, good afternoon. Am I audible?
Priya Sen — Analyst
Yes, sir.
Operator
Yes, go ahead.
Gaurav Sekhri — Chairman & Managing Director
Okay, thank you. Welcome to the Q4N FY25 earnings conference call of Pateli Vineyards Ltd. The financial results and investor presentation have been shared and I trust you’ve had a chance to review them. FY25 has been a year of strategic execution for Fidelity during which we focused on setting up robust systems and processes that are laying the foundation for our next phase of growth and scale up.
Before I present the key milestones and achievements of the year, I would like to begin with a brief overview of Foteli’s operating model and the legacy of the business. Fratelli holds a leading position in the Indian mine industry with a market share of approximately 30% and is widely regarded as one of the country’s most trusted and respected winemakers. Our business is built on a foundation of deep expertise in viticulture and phonology which is with a clear focus on crafting premium and super premium wines that meet the evolving taste of discerning consumers.
As a fully integrated enterprise, we manage every stage of the winemaking process from vineyard cultivation and grape harvesting to production, bottling and distribution. This fully integrated model allows us to maintain rigorous quality standards, ensure consistency across vintages and foster innovation across our product portfolio. We operate two strategically located facilities, our mother facility being in Ahlus, Maharashtra and another facility at Bijapur, Karnataka.
Our flagship facility in Akluj has a capacity of 4.8 million litres and also houses our canning line where we produce Tisht, our innovative wine in a can offering. Bijapur adds an additional 0.6 million litres to our capacity. This year we’ve increased our total installed capacity by 1/3, bringing it to 5.4 million readers. This expansion has not only strengthened our ability to scale but also enhanced our product quality supporting better margin realization.
Our vineyard ecosystem is a key competitive advantage for Fratelli and unique to us. It is anchored in 400 acres of vineyards which are farmed by us and supported by over 1000 acres under long term contract farming. This integrated model ensures food traceability, consistency and supply resilience at scale.
Today our wines are available across approximately 25,000 touch points nationwide. Internationally, we continue to expand our footprint in high potential markets including the uk, us, Italy, Japan, Dubai and Australia, demonstrating the growing global appeal for our brand. With a 15 year legacy and expertise, Pateli continues to redefine winemaking whether through our premium award winning labels, innovation in new formats or our expanding market presences.
Our portfolio is anchored by marquee brands like Jenour and Sate and the Master Selection range, each reflecting our commitment to quality and craftsmanship. This year we made meaningful progress on both innovation and progress. We upgraded our tech stack to support faster and sharper decision making. On the product side, we introduced exciting additions to our portfolio. Our first Pinot Noir as well as the Master Selection Late Harvest and our latest offering is Shotgun, a ready to drink crafted product to engage younger consumers and expand the category.
We also strengthened our leadership in the Wine in a Can segment, taking it deeper into tier 2 cities and unlocking new consumers and demographics. Another exciting milestone was the launch of our first four room bar and coffee place in partnership with Blue Tokai in Koramangala, Bangalore. This is a unique wine meets coffee experience designed to engage urban consumers in a more immersive way.
Looking ahead, we remain firmly focused on elevating our premium wine portfolio, deepening our investments in hospitality and expanding our presence across emerging Tier 2 and Tier 3 markets. As a professionally managed family led enterprise, we are leveraging our strong foundation to drive sustainable growth, creating enduring value and delivering exceptional experiences.
We wish to set new standards for the wine industry in India and with this I would like to welcome Aditya to take us through some of these strategic and financial Updates for Fashion IFA. Over to you Aditya.
Aditya Sekhri — Director
Thank you. Hi everyone. In FY25, 73% of our revenue was contributed by the Premium and above segment, reinforcing our strong brand positioning and the shift in consumer preference towards our quality. Our revenue stood at 182 crores, reflecting the impact of supply chain streamlining measures and broader macroeconomic headwinds. Gross margins improved by 200 basis points year on year driven by an enhanced product mix and operational efficiencies.
EBITDA remained under pressure due to elevated investments in long term strategic initiatives. This included category development, infrastructure updates and sustained brand building efforts. We continue to strengthen internal capabilities throughout this year, onboarding new talent, expanding the team and laying the groundwork for future growth. The brand remains well positioned to scale profitability in FY26 with clear visibility on margin recovery through cost optimization and enhanced operating leverage.
Going forward, our priority remains on driving EBITDA recovery while continuing to invest in capacity, brand development and systems that will support long term sustainable growth. Our focused premium portfolio and our brave commitment to crafting exceptional wine experiences have been instrumental in reinforcing Grand Seasons as well. Strategic partnerships have amplified our reach in visibility this year and our presence at Maki Wells such as Nyka Land, Probine, Nagpur Fest and Diwala Beano allow consumers to engage directly with our brand and also to experience our new offerings of the market selection and our newly launched Pinot Novada as well.
First time these platforms continue to be vital touchpoints in deepening consumer connection and driving premiumization for us. We continue to scale tilt our wine and can offering by strengthening its presence at high energy cultural and music festivals such as Pancad and Tune Music Festival. These platforms are key to our strategy of integrating wine into contemporary casual consumption occasions, broadening category appeal and accelerating trial among younger urban consumers. This is a deliberate step in our ongoing effort to redefine how wine fits into India’s evolving lifestyle landscape.
We also introduced our innovative RTD offering Shotgun, a bold, convenient format designed to appeal to a wider and younger consumer base. With its vibrant packaging and easy to enjoy profile, Shotgun is helping us tap into new consumption locations and expand our presence in the fast growing RT segment. Currently, the RG industry in India is roughly $150 million.
Looking ahead, we are poised to benefit from enhanced production capacity in the strong harvests, both of which will support the increased demand across our premium portfolio. With our robust and differentiated product mix, expanding routes to market and continued investment in brand led consumer engagement, we are strategically positioned to strengthen our leadership in the premium and wine segment. Backed by operational discipline and a long term vision, we remain confident in our ability to drive sustained top line growth and a margin expansion while shaping the future of wine consumption in India.
With that, I conclude my remarks and request the moderator to open the floor for questions.
Questions and Answers:
Operator
Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two 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 comes from the line of Girish Kumar with Valpro. Please come in.
Girish Kumar
Hello. Am I audible?
Gaurav Sekhri
Yes, Please go ahead.
Girish Kumar
Thank you. Sir, I have three questions. The first one is what’s your outlook on the wine industry over the next few years in India? And the second one is, are you seeing any slowdown in the demand for wines, especially from premium urban consumers? And the third and the last one is what innovation or new strategies are you exploring to drive future growth?
Aditya Sekhri
Sure, I can take this question. So as we mentioned in our previous earnings call as well, last year was an aberration not only for us, but for a lot of the other Alphabet as well. But our outlook as mentioned previously as well remains consistent. You know, we’re looking to grow at a figure of 15 to 20% year on year and therefore our outlook remains consistent with that. With respect to demand, we’ve seen a robust recovery in Q1 and we see that continuing this year as well going forward.
Girish Kumar
And innovation studies, are you in school trying to grow? What innovation or strategies are you exploring to drive the future growth?
Aditya Sekhri
So we’ve launched it about three years ago, which is scaled up well and it’s the largest player now in the wine artery segment, especially with respect to wine and a can. And we’ve recently launched shotgun as well. And with short run we believe that the total restful market, especially pertaining to wine, we feel we can dramatically increase that. And obviously the updates will come in the following quarters because we just done a soft launch in Q4 and more updates will be given to you in the following quarters.
Girish Kumar
Fair enough. Thank you, sir. Thank you.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Chetan with systematic scope. Please go ahead.
Chetan
Hi. Thank you for the opportunity. I have a few questions first on the distribution strategies. So as the company is expanding its distribution footprint into tier 2 and tier 3 towns where it is already witnessing growing traction, are there any differentiated product development or marketing strategies being tailored specifically for these markets as yet different than the metro urban centers? And additionally our innovative products such as cans and RTD being strategically positioned for these regions.
Gaurav Sekhri
Hi, Gaurav, Shakesi here. So, you know, tier two, tier three cities, some customization is done to have a better reach, you know, while the broad initiatives remain fairly consistent between metro cities and tier 2, tier 3 cities. But, you know, sometimes some level of vernacularity comes into play. There is also need of samplings and tastings because in many cases wine people understand or have a desire to try wine, but they have probably not experienced it before.
So one needs to customize those aspects. But otherwise initiatives are not that dramatically different from metros. And we have a very complete range of wine products in terms of price points, in terms of taste profile, etc. So we have something for everyone and we kind of see our audience and then accordingly, we will propose them to try those category of wines.
Chetan
Okay, thank you. Second question is on the product mix and margins. So currently say over 70% of the company sales are derived from premium and luxury wines, which significantly, we can say contributes to EBITDA. However, in fiscal 25, EBITDA margins are impacted due to the increased investments in brand building initiatives.
So how is the company balancing its focus on maintaining a high margin premium product mix with the necessary investments to support the growth of, say, the emerging potentially lower margin segments such as RTD’s and CAN. Okay, specifically, I mean that, are there any initiatives in place to ensure that the rising volumes from the newer categories do not dilute the overall premium mix or the company’s margins?
Gaurav Sekhri
Yes, sure, sure. So, Gaurav, again, let me attempt to answer a question. And if AMOS or ADI wish to add, they can elaborate. But you know, essentially we have a certain expectation benchmark of gross margins and EBITDA margins from product as well as regions, which we keep a close eye. And it has to meet our criteria to qualify for it to become a product. That is, that is a given to begin with. Of course, premium products, luxury products will tend to offer you better margins. And our focus is that our premium range of wines have been growing at a CAGR of 15% over the last few years.
So while we expand TAM by introducing products like wine in a can, short term, even filling some categories of products which may have been lacking in the past, our focus remains at number four in premiumization because having owning and controlling our own vineyards, that is where our expertise lies is to make high quality wines where we are delivering extremely high quality experience at a much lower price compared to imported wines. So that is really our key focus area. I think that should sufficiently have answered your question.
Chetan
Yeah, yeah, that was helpful. And just last question on the expansion of this cultivation area. So the company had planned a capital expenditure of approximately 5 crores for the expansion of its vineyard area by additional hundred acres. Could you specify the expected timeline for the commencement of say commercial yield from this?
Gaurav Sekhri
Sure. Typically it takes about three years for us to get a viable yield out of any new plantation. So this capex is underway in a place called Jamli in Abadhara district where we have already planted approximately 40 acres. The net planting area we will get in this land is about 100 acres. About 100 acres. And we’ve planted about 40 as of now. And the big chunk is getting done in this financial year. And usually it’s a three year, you know, timeline to get lease.
Chetan
Okay, thank you. That was helpful.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Chan Misha with Marble Arc Capital. Please select Misha. Please go ahead with the question. Misha, if you have muted your line, unmute yourself and go ahead with the question.
Janvi Shah
Hello. Hello?
Gaurav Sekhri
Yes, yes. You’re audible ma’ am. Please go ahead.
Janvi Shah
Hello everyone. Thank you for. Thank you so much for giving me this opportunity. My question is that that our sales are down by 1% YoY in Q4FY25. So what was our volume variant for Q4FY25?
Gaurav Sekhri
You are asking for the variance of volume between FY24 and FY25. Have I understood your question correct?
Janvi Shah
That is one part of the question. I also wanted to note the Q4FY25. Q4 of FY25.
Gaurav Sekhri
Okay. It’s along the lines of our. We’ve lost about 30 odd crores of top line from 215 to about 180 odd crores. And in terms of the drop in revenue or drop in volume, it is almost similar. But give us about two minutes and we’ll come back to you with an exact percentage.
Janvi Shah
Sure. And you’ll help me with both, right? Q4 FY25 and the full year FY25, which is 2425.
Gaurav Sekhri
Sorry ma’ am, can you repeat the question?
Janvi Shah
Yeah. My question is that you will be cutting back to me with both the numbers, right? The Q FY25 and the full year FY25.
Gaurav Sekhri
Sure. My colleague Heman CBO is going to answer that.
Hemant Arora
Hi, ma’ am. Volume dropped by 13% in F5 basis.
Janvi Shah
Oh, it dropped by 13% in FY25.
Hemant Arora
Yeah. Sorry?
Janvi Shah
In Q4 FY25.
Hemant Arora
It’s almost.
Gaurav Sekhri
We’ll come back to you, ma’ am, on the Q4 number shortly. Do you have a third question?
Janvi Shah
No, this is the only question, the only two questions that I wanted to know.
Gaurav Sekhri
Sure, sure. We just give you the Q4 variance in volume as well. But you got the number for year on year, right? It’s about 13%.
Janvi Shah
Yeah, I got the percent. The number right.
Gaurav Sekhri
Okay.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Smith Gala with RSPN Ventures. Please go ahead.
Smith Gala
Yeah, thank you for the opportunity. We are seeing a degrowth in 25 numbers. FY25 numbers. So broadly, what are the factors contributing to the degrowth? Is it we have lost on volume or are we giving more discount?
Aditya Sekhri
Yeah, the degrowth as I mentioned as well in my opening remarks were attributed to a couple of key or market reasons. One major aspect was on account of the change in policies last year which happened in key states like Karnataka and Andhra Pradesh, even in Delhi. So these are three major markets which were disrupted. Another key aspect was, you know, the election factor which led to a high number of dry days and sales, obviously due to which we could not do sales during those dry days.
The third factor also, which was a contributor was some disruption in our internal supply chain because we were transitioning into a new unit altogether. And that happened largely in Q4. But I can assure you that that has been completed and going forward there will be no disruption in supplies from our end as well on that curve. But these are the three major contributors.
Smith Gala
Okay. And what was the number which you mentioned from the volume decrease I missed.
Aditya Sekhri
Was 13% on a Y basis?
Smith Gala
1-3.
Aditya Sekhri
1-3.
Smith Gala
Next question is in the presentation it is also mentioned that some microeconomic factors also dependent cause the factor to the demand going down. So the macroeconomic factors will also take time to improve if they are too. So what are the reasons for you to believe that you will be able to deliver a 20% growth year on year basis for FY26?
Gaurav Sekhri
Sure. No, it’s a great question. Gaurav Shakri here. So the macro factor that we have referred to is that we have generally we are seeing a slowdown in any kind of discretionary spending, whether it is apparels or it is alcohol, etc. There is some correction and there are various theories on why that is happening and I don’t wish to speculate on that. But it is our understanding that there is a general slowdown in consumer spending and that impacted demand for us as well.
And our way of tackling it is as follows. We see wine still at a very small and I think there is an opportunity to expand tam. And our focus in expanding TAM is the launch of products like Shotgun, which will help us to some extent mitigate this resistance because it is a whole new product from us. It’s exploiting a different market base altogether while leveraging our sense in winemaking because it is a wine based product.
So that is one and second in the ultra premium segment, we are not really seeing any slowdown and we have focused on the opportunities that exist for us to expand within that category. And that is giving us this confidence that we can achieve our desired growth rate.
Smith Gala
Okay, thank you, that was helpful. Second question was, as you must be aware that India has successfully come up with a trade agreement with the eu. So that will also the European mines will also flood the market. So do you see that affecting the demand of the domestic mines?
Gaurav Sekhri
See at this point of time, the FTA which is being negotiated, it will be along the lines of what has already been done and achieved with Australia, that FTA provides sufficient protection to domestic wines. I don’t see any impact of the FDA at this point of time. In fact, you know, more wines becoming available public helps in expanding TAM and general preference of people. At the same time, I think we have. We are very aware and we are watching it closely. But the way the FDA provisions are today, we feel comfortable that it will not have any impact on us.
Aditya Sekhri
And additionally Dipna here, I would like to add that in the initial draft that’s been proposed, why has not been covered as one of the spirits in UK at least.
Smith Gala
Okay. UK it is in UK did not cover.
Aditya Sekhri
Correct.
Smith Gala
Okay. Okay. And we have been incurring a loss. We have incurred a loss in the current year. So what does the tax statement look like for FY26? So I think the we must have savings in FY26 on account of tax as we must have created deferred tax effect this year.
Rajesh Garg
So basically it’s an accounting entry. See, whenever your office site I would update question. So. Hi, am I audible?
Smith Gala
Yeah, yeah, you are audible. Yeah.
Rajesh Garg
Yeah. So basically it’s an accounting function whenever you have some losses. So deferred tax asset is created. So in the coming. I mean in the current year. So when we will get profit. So it will be reversed? Actually.
Smith Gala
Yeah. So this. Your tax statement should develop. The rate of tax should come down to five or maybe even nil.
Rajesh Garg
No, it will be 25%. Actually the effective tax rate. The effective tax rate will be 25%. So…
Smith Gala
I understand. But we will get credits of the losses of this year, right?
Rajesh Garg
Yeah. So in that case the deferred tax will reverse. I mean here you are seeing the negative figure. In that case it will become positive figure. So the effective test it will be around 25% only though there will be. There will no cash outflow. I mean in. In terms of the tax payment, there will be no tax payment. But the asset which is created, it will get reversed.
Smith Gala
Yeah, yeah, that was. That was the question. And so is the construction of the tourism facility on track with the planned construction timeline? And it will go live by end of 27.
Gaurav Sekhri
Hi, Gaurav Shekhshi here. We are still in planning stage. We haven’t yet begun construction. We are still, you know, very much attempting to have the facility ready by an Open in 2027. But. But at this point we are still in planning stage.
Smith Gala
Okay, that was helpful. And my last question from my side. Is there enough any plans to merge the old co with fritilly to save some up of the cost of consolidation and some expenses?
Gaurav Sekhri
We are evaluating it. Yes.
Smith Gala
Okay, thank you. That’s all for myself.
Gaurav Sekhri
Thank you.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Amit Mehendali with Robocapital. Please go ahead.
Amit Mehendale
Thank you. Thanks for the boss meeting. My first question is on the EBITDA. If I look at year on year EBITDA, I think we’re down about 25, 30 crores. And there was a comment earlier that, you know, we have invested. So could you throw some light on what type of extra expenses have you incurred and if these are recurring for the same sort of top line, can we go back to 2020 micros? Just some color on this.
Gaurav Sekhri
Hi Gaurav, Setri here. If I’ve understood your question correctly, I think you would like some information on what expenses were incurred in this financial year. What kind of expenses which impacted ebitda? Is that your question?
Amit Mehendale
Yeah, that’s right. And also, I mean if those expenses are recurring in nature, they were one off expenses.
Gaurav Sekhri
Of course. Of course. So you know, broadly there are two or three categories of expenses which have, you know, adversely impacted EBITDA in this financial year. Some are of course recurring in nature in the sense that we continue to be very focused on brand building and we don’t wish to slow down on those kind of initiatives because it does expand the total addressable market and recruiting new consumers, et cetera. Our brand investments in FY25 went to about 8% of our top line from 6% in the previous year. We do not wish to slow down on this.
So this could be recurring in nature. Although in absolute percentage terms with the higher top line expected in this financial year, in percentage terms this number should come down to hopefully by at least 1 percentage point, maybe 100bps. Secondly, in terms of one off expenses, we have done a lot of work in this financial year to make the company future ready. We redesigned our plan, we worked on rebranding of our master selection range. We have just completed our work on a new bottle and new for our Grand QA Brute which is our premium sparking wine. It needed an upgrade. It was done almost 12, 13 years ago when the product was launched.
To truly reflect the product and the liquid that is inside, we had to undertake this process. That was a one time thing and of course Shotgunner which is our new product launch. Any new launch, any new product, the R and D that goes into it, the launch related research, etc. That goes into it. So those are all one time. Now the product is already in the market. We are already selling it successfully in markets like Kerala, Uttar Pradesh, West Bengal, Uttarakhand, Rajasthan, Maharashtra. So a few states we’ve already rolled it out and the response is extremely encouraging. So some of those kind of expenses were one off in nature. I hope this helps give you more information and clarity.
Amit Mehendale
Yeah, sure. Thanks. And my next question is on FY26. Now suppose do we expect like 15% growth also? Is that a fair assessment? And If I add 15% to the current top line, what type of EBITDA margins? Broadly, some range. If you could indicate we could target for FY26.
Gaurav Sekhri
I don’t want to speculate so much on the EBITDA margin side, but what I can tell you is that on the sales of previous year, we are fairly confident that we will achieve this year about 20 to 25% growth.
Amit Mehendale
On the top line. Sir, you mean.
Gaurav Sekhri
On the top line. And this is not including the short term product launch. That will be on top. So my revenue guidance for this financial year is about 250 crores.
Amit Mehendale
Okay, great. And my last question is on Shotgun. What type of, you know, if you could tell us a little bit about the size of the industry market share, what are we aiming to do there? That will be helpful. Thank you.
Aditya Sekhri
So Short Run falls in the RTD segment. As I mentioned, the total market size as of today is roughly about $150 million. There are some players in the market who naturally have a large share in the segment already and they’ve been existent for a while. With respect to Fideli launching Short Run, we already have a very, very robust distribution channel across the country. We are available in 25,000 touchpoints already in alcove. Potentially there are 70,000 plus touchpoints available across the country.
And with the launch of Shotgun, we believe we can foray into a lot of these other touch points which would traditionally not be available for wine sale. So that’s really the key objective for Shortban. And as I said, as the potential is large and given that we have a Pan India distribution, we are looking for Shortban to be a sizable part of our contribution in terms of revenue over the next three years. I hope that.
Amit Mehendale
Yeah, very much so. Thank you very much.
Operator
Thank you. A reminder to all the participants that you may press Star and one to ask a question. Next question comes from the line of Dipesh Sanchetti with Manya Finance. Please go ahead.
Deepesh Sancheti
Yeah, hi. Am I audible?
Gaurav Sekhri
Yes, please go ahead.
Deepesh Sancheti
Can you tell me more about your collaboration with Blue Tokai and how it will help the growth strategy of the company.
Gaurav Sekhri
Hi, Gaurav Sekri here. So with Blue Tokai we saw very like minded business and company, homegrown Indian business, aspirational in nature, challenging the multinationals. So we had a connect with them and to leverage that we have come up with one is of course a para leaves coffee which is really a blue to buy product. But we have supported them in creating and developing and we have some opportunity of brand building on that.
Aside from that in Bangalore, in Kormanga we saw an opportunity at one of their coffee bars where we thought it’s a good idea to roll out a wine experience. And that way we get a chance to interact with our consumers. And with that Vivis, we have done our sort of made in wine and coffee bar with them. Lot of interesting learnings from this experience. Still early days. But what it is doing for sure is providing an opportunity to Fratelli to connect with its consumers and talk about the product. So that is working out quite nicely. And the place is branded as Core Brewing.
This is Anida P O U R P for Peter. Pour Room is the name of the thing.
Deepesh Sancheti
Okay, now just wanted to understand the Tilt cans which we have, they are all wine or are they cocktails? Also.
Gaurav Sekhri
At the moment the Tilt range is purely wine. It’s 100% wine, not with any added flavors or anything like that. It is basically just, you know, good quality, easy to consume, easy to like wine which is fresh and meant to be consumed fresh in a casual setting.
Deepesh Sancheti
With what percentage of alcohol?
Gaurav Sekhri
It’s around 11%.
Deepesh Sancheti
Yeah. So because I just mentioned this because I was in Spain recently and I came across this beautiful cocktail name as Tinto Bi Verano which is available in cans and even 2 liter bottles over there. Can we replicate something like this in India? I mean this will be around 4.5, it was 4.5% alcohol and I think can we replicate this because that will be a very good way to target early drinkers.
Gaurav Sekhri
No, I appreciate the suggestion and I assure you we are looking at all such opportunities. We do have another product in a can called Noi which is a spritzer and it’s at 8% alcohol. Generally speaking in India, the preference of an alcohol beverage, but low on alcohol. People don’t tend to appreciate it as much as they do abroad. But we do have a product in a can with a lower which is at 8%. But some of these ideas of cocktails in a can, wine based drinks in a ready to drink format are very much which we are in our consideration. We are aware of them. But I do appreciate you sharing your own learnings from Spain. Thank you.
Deepesh Sancheti
Okay, and what about the, I mean are there any other recent exciting innovations and how do you address shifting of consumer preference?
Gaurav Sekhri
Shifting of consumer preference is a function of, you know, in our industry, at least in last 10, 12 years we’ve learned is you have to make people try your product and then the product has to speak for itself. And that is our focus and attempt always. We are making a product which we are proud to drink ourselves proud to serve in our homes and put our name on it. So sampling and trials is the best format and we are always very focused on that.
Deepesh Sancheti
Okay, and is there any major capex which is lined up and how do you finance it right now? What is the working capital requirement and term loans and what will be the trend ahead?
Gaurav Sekhri
We are done with most of our capex that was needed. On the winemaking side of things, some routine expenditures for efficiency improvement, both at the vineyard level as well as wine making will continue to happen. We expect that number for this financial year to be under 15 odd crores for this financial year. So nothing major. Last year we were approximately 40 odd crores that we, that we spent. This year it should be about 15. And of course you know, this is not including the hospitality project.
Deepesh Sancheti
What about the working capital? How much is the working capital and term loan in our debt?
Gaurav Sekhri
I will my colleague Rajesh, she will answer the question for you.
Rajesh Garg
So right now we have borrowings of around 100cr and out of which 2 3rd is the working capital and one third is eternal.
Deepesh Sancheti
And what is the cost of debt? Average cost of debt.
Rajesh Garg
10%.
Deepesh Sancheti
10%. Okay. I mean why such high debt? I mean, I mean are we not in talks with anything? Because can’t we just lower this interest cost?
Gaurav Sekhri
We are always attempting to do that. Borrow security here. We are always attempting to do that. But at this point of time our best options are to borrow at around 10%. We have had a rating upgrade last year. We are at triple three minus rated as a business.
Deepesh Sancheti
Okay, so are we planning to raise anything from the market? Because you know, we can significantly reduce the debt, so it will not put pressure on our profitability. Also.
Gaurav Sekhri
We don’t rule out any options. But I cannot tell you of any definitive plans today of raising money.
Deepesh Sancheti
I know, but I mean, if there is anything, then whom do we approach to India only.
Gaurav Sekhri
I mean, it’s too. I mean, we can’t speculate what we raise.
Deepesh Sancheti
As an investor. As an investor, I’m asking just if we want to participate into your. Okay.
Gaurav Sekhri
You should just be in touch with Go India for sure. There are IR and anything like that. Please do reach out to them. We would welcome your participation at that point of time.
Amit Mehendale
Okay, so Gaurav, how do you see the growth happening in the coming years, let’s say for the next three years? You know, I think you mentioned about 20% growth. Where do you. Where do we see this growth happening and how. Just if you can just put some numbers on it.
Gaurav Sekhri
You know, I think what they’re trying to do is diversify our revenue streams with wines in a can. We were the first ones to move on that category and launch it Pan India and same thing we’ve done now with Shotgun. We are leaders amongst all the established winemakers to have come up with a product like this. So we are diversifying our revenue base so that we can continue to deliver good growth for our shareholders.
In terms of wine on a standalone basis, India is at a very interesting stage. Our per capita consumption is so low that the only way for it to go is go up. But a lot depends on people understanding it, accepting it, and then kind of adopting it as a lifestyle. We’ve seen that happen in the last few. You see the odd state which suddenly growth would be north of 30%, even 40% because the base is so slow. So one will always have those aberrated numbers and those opportunities you can only exploit if you are in the business with some sort of relevance.
And now that Fratelli has north of 30% market share and 25,000 touch points, we are very well poised for those triggers as and when they come, we are there to exploit them and take benefit from them. But for me to tell you in a definitive manner from a particular segment, both will happen is very, very hard. But as a company with diversified revenue streams is where we believe we want to, we aspire to deliver 20 to 25% year on year growth.
Deepesh Sancheti
I just want to rephrase the question. How do you get Indians to actually accept wine? Because like, you know, I know you have a lot of touch points but point is still today, I mean, I don’t know whether you’ll agree with me or not, but many of the, many of the people in India don’t even understand what is the difference between the, you know, a sparkling wine or a red wine. How do we educate the masses and how do we make this a mass product.
Gaurav Sekhri
I completely agree with you on the lack of understanding part. But I also, you know, would like to share with you that the adaptability and acceptability comes very, very fast in certain markets. And we saw that in Hyderabad, specifically in Telangana last year. So Kerala is another state where we have seen a trend like that. How to make wine more approachable, acceptable is not million but billion dollar question.
And if you have any suggestions, I would welcome it. But for us the way is to make more people try it, sample it, make wine more approachable. Wine in a Can was an idea to make wine more approachable by reducing the formality around drinking wine with shotgun. We made it more approachable by getting the right price point, the right kind of packaging, etc. So these are the tools and of course sampling and tasting eventually works really well.
Deepesh Sancheti
And you can participate in a lot of festivals, a lot of, I mean there are a lot of events which happen. If we can have at least our tilt cans over there, I mean things can work out really well. I mean that way. I’m just trying to say that you know, wine as a market, I mean, how do we make it as a mass product so that, I mean, and it has to be done by the entire industry itself, not just by you. But since you hold your.
Gaurav Sekhri
Question and it’s a great question, I want Adi has, I think some comments he wishes to share on this. So yeah.
Aditya Sekhri
I already commented in my opening remarks as well that we have participated in a large number of HALO or marquee events in the previous financial year and those we’ve been doing consistently for the last couple of years. Zomatoland, Pan Land, Naika Land, Chefo Literature Fest, the Hindi Arts Fair. These have been some of the marquee events which we already have been doing.
And we have taken the leadership position in here at least among all the other winemakers to kind of really deliver these elevated consumer experiences by doing these events. And this, as an effort, is not going to stop from our side, at least for the next three to four years at least. When we feel that we really, really continue to really continue to do these things. So this happens. I think Four Room is another key initiative which we’ve been working on. So, like this, there are enough opportunities to sample your wines to the larger base.
Deepesh Sancheti
Right? Because you know, just by going by with one of the remarks that because of the elections, the sales went down for most of the IMFL or for most of the liquor guys, election is one of the biggest events. Whereas for wine it actually turns out to be a very. I mean, as a barrier. You’re getting my point.
Gaurav Sekhri
No, but as I’m jumping in, I think that’s a whole different conversation. I mean, you know, why sale of Kanchidikar and those products goes up during election years. So let’s not speculate on that. Wine is a completely different segment. What impacts us is dry days when riders are declared, restaurants are shut. Consumption takes a hit. That’s the reality.
Operator
Thank you, Mr. Sanchetty. Please rejoin the queue for more questions. Next question comes from the line of Rohit Ohudi with Progressive Shares. Please go ahead.
Rohit Ohri
Hareem. Couple of questions from my side. The first one is you mentioned that working towards Pioneer NOA has some offering from your side. So my question is how do you intend to maintain the quality or maybe the flavor, which is slightly difficult to replicate in terms of the high quality wines which we have maybe from 1959 or maybe Murphy or maybe Costa or Ocean 8 or all the other brands.
Gaurav Sekhri
So thank you for your question. I mean, for us, quality stands paramount and number one in everything we do. We only will launch and do products which at that price point deliver the best consumer experience. Pinot Noir is, you know, we’ve launched it now after almost 12, 13 years of being in the business because now we have, you know, the liquid that supports the quality standards of our brand. We are able to give the highest possible quality at that price point.
Again, I would like to reiterate because of us farming our own vineyards and that is what enables us to deliver that experience. And if you sampled our products like Janoon Sete Master Selection, our grand cubic root Sparkling, which is the only zero Rosa sparkling wine. When I say zero Rosade, there’s no added sugar into that and it goes through a natural fermentation process exactly like our Champagne has made. And we don’t need to add anything to it because the wine stands on its own. It doesn’t need anything.
So that is how we are able to meet the highest standards possible and deliver a quality of wine at a price point which imported wines I can see that competitive zoo cannot match.
Rohit Ohri
Okay, okay. So we have this initiative called tilt, which is canned wine initiative. So my question was that you’re trying to attract the younger consumers or probably trying to penetrate this market, which is barely 4 or 5% of the total turnover. How do you see this as a risk? Because the traditional wine lovers, they would prefer the same glass bottle with probably a cork on that. So how do you see that as a risk? Maybe do you think you should be investing more money in this?
Gaurav Sekhri
So for us, it’s about the setting under which you consume a wine. Now, if you’re in a fine restaurant in that kind of setting, tilt does not work. It’s the bottle business that will work. The idea of tilt and our validation came from places like Uttarakhand, etcetera, Where the product has done exceedingly well. It is, you know, there is this whole segment of young consumers who do not like the formality around wine.
And we want them as younger consumers, maybe when they’re 25, you know, early 20s, mid 20s, they want to encourage them to try wine, get familiar with the liquid, and maybe as you know, five, 10 years later, when even their purchase power allows them, then they can go and sample a whole bottle and enjoy the more sort of, you know, longer experience around wine. But how else do we get to try young people, you know, our product if you don’t put it in a. In a format which they can relate to?
Operator
Thank you, Mr. Houry. Please rejoin the queue for more questions. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Sri Rao R and individual investor. Please.
Unidentified Participant
Thank you for the opportunity. You know, you mentioned that the domestic manufacturers will be protected even after the FTA coming into place. So can you throw some light on the landed cost between an imported wine and Europe that is really mine. What is the price difference at present and how this would change post fda?
Gaurav Sekhri
Hi, Gaurav Sikri here. Without elaborating and taking too much time, what I can tell you is the FDA provisions for all wines under $5 FOB price per bottle. The duty remains unchanged at 150%. And any wine, I can kind of tell you, which is, let’s say at around $2, not even closer to 5, but just $2 fob, which would be, in my view, the starting point of any kind of liquid, which is sort of, you know, okay to be on shelves. Those wines landed in India, depending on the state, but will be north of 3,000 rupees a bottle.
So that will take the price even higher than our September, which is one of our top wines. And Chete sells at around 2000 rupees retail.
Unidentified Participant
Okay, got it. And so just one more question. Can you mention the states where Tilt and Shotgun are available? Tilt is more or less available Pan India.
Gaurav Sekhri
So Tilt is available everywhere. Shotgun is a new launch. Hardly three or four months in the launch. Maybe I’ll just have Aditya elaborate and tell you exactly which states we have short term already.
Aditya Sekhri
Yeah. So test is available across the country. And this year we will be launching also in defense which is a key aspect for us with respect to short run. We are already available in the states of Maharashtra, Kerala, West Bengal and Uttar Pradesh. And we will be looking to be available in 10 plus states by end of this.
Operator
Thank you. Mr. Sriram, please rejoin the queue for more questions. Next question comes from the line of Janhvisha with Marble Art Capital. Please go ahead.
Janvi Shah
Hello.
Gaurav Sekhri
Hi Jamini. Please go ahead.
Janvi Shah
Yeah, actually I will just wait. The answer for Q4FY25 that we can. And I’ll get back about it.
Aditya Sekhri
Yeah. So I can give the number as it’s here it is about 10% for Q4.
Janvi Shah
10 to 10.
Aditya Sekhri
Yes.
Janvi Shah
Thank you so much.
Aditya Sekhri
Thank you. Thank you.
Operator
Thank you. A reminder to all the participants that you may press Star and one to ask a question. Next question comes from the line of Madhurati with countercyclical investments. Please go ahead.
Madhur Rathi
I wanted to understand our channel mixer. How much would be coming from. How much would be coming from.
Aditya Sekhri
Yeah, so is about 65% and the bond premise contribution is about 65%. 35% comes from all.
Madhur Rathi
So do we have how much would be coming from.
Aditya Sekhri
35%.
Madhur Rathi
Sure. I wanted to understand regarding a margin improvement that you are planning from 10% to 20% what will drive this? And will there be an element of the resort and the resort and hospitality that will contribute to these margins and what are the cost savings that you can expect in FY26 because there are gross margins are very similar to the market either. But it is not moving to our EBITDA margins. So if you could explain on the cost saving initiatives that we can expect over FY25 and how do we move from this 10% margin to 20% margin over the next five years?
Aditya Sekhri
Sure. So as you rightly said, our gross margins remain extremely robust. In fact, there was an improvement in the last year as well. We’re operating at about 79% and we believe that’s a good figure which we want to remain consistent with in the years to come as well. With respect to the EBITDA expansion over the next few years, as mentioned in our outlook as well, where we’re targeting roughly 20%, a lot of it will come from the operating leverage as well as you scale up and they said as you’re padding 250crores in terms of our overall revenue, you will see a major recovery with respect to EBITDA on that basis and the time to come as well.
As I mentioned earlier, our brand investments last year went as high up as 8% ultimately as you approach 20, 28 or 20, and they will ultimately stabilize around 5 to 6%. And naturally there will be certain rationalization further in the trade discount as well going forward.
Madhur Rathi
Got it, sir. On operating level sincere, our uplift facility has increased from 4 million to 5.4 million litres. Will our cost of production of wine get reduced going forward as we scale the volumes or how do you think from these expansion?
Aditya Sekhri
Yeah. So as I mentioned, our overall cost of production is already extremely robust. While I can’t give you a guidance today, I firmly believe that this current level that we’re maintaining or that we’re getting is fairly achievable going forward as well.
Madhur Rathi
Got it. So there’s a final question from my own sir. What we have heard is there has been a lot of bulk wine that has been sitting in cellars in European markets. So is there a possibility of us importing those wines and doing something like the whiskey or the IMFL manufacturers do, or this is something that is not very common in the wine market and so on that trend.
Gaurav Sekhri
Hi, Kaurav Sikri here. We are aware of such situations prevailing in Europe and even in Australia and other wine producing places. But at this point of time, there is no compelling commercial reason to import bulk wines into India. We don’t see it.
Madhur Rathi
Sir, thank you so much and all the best.
Gaurav Sekhri
Thank you.
Operator
Thank you, ladies and gentlemen. That was the last question for today. We have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Gaurav Sekhri
Hi, Gaurav Sikri here. Thank you everyone for joining the Q4FY25 conference call. We remain focused on delivering operational excellence, advancing our strategic priorities and ensuring enhanced value to our shareholders. I really appreciate everyone’s participation today and for the high quality of questions and the interaction. We always learn from from such interactions as well. So thank you for that. For further information, you are welcome to contact our IR GoIndia advisors. Thank you and have a lovely day.
Operator
Thank you on behalf of Goindia Advisors. That concludes this conference. Thank you for joining us. You may now disconnect your links.