Globus Spirits Limited (NSE: GLOBUSSPR) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Suyash Samant — Investor Relations
Shekhar Swarup — Joint Managing Director
Unidentified Speaker
Analysts:
Viraj Mehta — Analyst
Dhwanil Desai — Analyst
Vedant Bhasin — Analyst
Nitin Awasthi — Analyst
Ankit Gupta — Analyst
Unidentified Participant
Rohan Patel — Analyst
Anil Shah — Analyst
Aashish Upganlawar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Globus Spirits Limited Q3 and Nine Months FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in 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 star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Suyash Samant from Stellar Investor Relations Advisor. Thank you, and over to you, sir.
Suyash Samant — Investor Relations
Good afternoon, everyone, and thank you for joining us today. We have with us today the senior management team of Globus Spirits Limited; Mr Shekhar Swarup, Joint Managing Director; Dr Bhaskar Roy, Chief Operating Officer; and Mr Nilanjan Sarkar, Chief Financial Officer, who will represent Globus Spirits Limited on the call. The management will be sharing the key operating and financial highlights for the quarter and nine months ended December 31 December 2024, followed by a question-and-answer session.
Please note, this call may contain some of the forward-looking statements, which are completely based upon the company beliefs, opinions and expectations as of today. These statements are not a guarantee of the company’s future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statement to reflect developments that occur after a statement is made.
I now hand over the conference to Mr Shekas Varupso. Thank you, and over to you, sir.
Shekhar Swarup — Joint Managing Director
Thank you, Suyash, and thank you everyone for joining us today for a discussion on our performance in Q3. As always, it’s a pleasure to share our progress and provide insights into the strides we’ve made across our business segments. And along with me is also Rajesh Fanda, Business Head Consumer Division who will be filling in from Paran who is unavailable today.
To start-off, our manufacturing business continues to be a cornerstone of our operations, contributing 56% of total revenue this quarter. While this is a decline compared to 63% in Q2 FY ’25 and 63% in Q3 FY ’24. The change reflects our strategic balance between the manufacturing and the impressive growth of our consumer business. EBITDA margin for the manufacturing business stood at 1% in Q3 consistent with Q2, but lower than 4% in Q3 FY ’24. Margin per liter came in at INR0.85 per liter, reflecting the cost pressures faced in the segment.
And in the quarter gone by, due to the continuing cost pressures, we prioritized E&A sales to the extent possible while reducing ethanol production. Our flexibility to shift partial capacity between ENA and ethanol is a unique advantage for Globus, allowing us to respond to-market dynamics effectively. In addition, we have conducted several maintenance activities in Q3 to make use of this period of no/no margins. As a result, capacity utilization in Q3 was 50%, down from 87% in Q2, in January, we saw a significant shift in the market dynamics of raw-material with FCI reducing rice prices for distilleries. Later, OMC has responded with creating a provision for allocation of ethanol from FCI rice at a price of INR58 rupees and 50.
Currently, there is a limit to the amount of material that the ethanol industry can lift. However, having an additional source of raw-material at fixed prices has already reduced the prices of grain and going-forward, it will reduce the volatility of prices of all raw materials. And as a result, we now expect to achieve margins in the range of INR5 to INR7 per liter from ethanol. With additional margins that ENA bring, we will be able to go back to our long-term average of INR7 per liter.
Looking ahead to Q4, a planned three-week closure for maintenance in our plant is expected, primarily for the overhaul of the dryerhouse and the commissioning of the corn oil plant. Following this, we anticipate improved capacity utilization across all of our factories. Some strategic — some updates on strategic activities. And for maize procurement, we’ve secured sufficient warehousing capacity ahead of the upcoming season to ensure a steady supply of maize at fixed prices. And corn oil equipment, as I mentioned earlier has been installed at Bengal in this quarter and is awaiting commissioning and delivery is underway for the other two in East India.
Coming to our consumer business performance. The consumer business delivered another strong quarter, reflecting our focused efforts on-brand growth and market penetration. In the regular and others price category, the segment saw a 22% year-on-year growth and an 8.5% Q1 — 8.5% Q-on-Q growth in-quarter three, which remains the strongest quarter for volumes in the year. EBITDA margin in this category stood at 15%, slightly lower than 17% in Q2 due to inflationary pressures on packaging costs. Going-forward, the price increase in Rajat Khan, which was announced just a few weeks ago will help us grow revenue and profitability for this category.
Coming to Prestige and above category, I’m delighted to share that we’ve achieved our best-ever quarter, recording a revenue growth of 245% year-on-year and 100% growth quarter-on-quarter. The EBITDA margin improved to minus 10%, which is a notable recovery from minus 24% in Q2. Our strategic investments in route-to-market efficiency and innovative product launches have begun to show results. Revenues from brands in this category are set to exceed INR100 crores in FY ’25. Of course, these are net revenues. And I’m happy to report that our strategic our investments have been the key drivers of the success.
Some updates on strategic initiatives here. We’ve created a dedicated division for our luxury brands, which entails a dedicated team and a strategy to accelerate growth of these luxury products, namely Terai and Duab. This initiative will focus on premium positioning, brand development and ensuring additional new product launches in H1 and H2 of the coming year. Our UP market expansion is becoming a crucial growth market for the company, driven by strong demand in both regular and others as well as trustige and above categories.
Our expansion strategy in this region includes strengthening distribution network, enhancing brand visibility and capitalizing on emerging consumer trends. In the short-term, this business would predominantly be a volume driver for the regular category. However, once our distillery begins production in Q2 FY ’26, margins for the regular category will be similar to our historical averages for the category.
In addition, our more spirit production facility has recently been commissioned. This will allow us to enhance our cost-efficiency and also drive innovations aside from ensuring a steady stream of quality mall spirit for our brands and thereby giving us supply security. So our European distility project is progressing well with commissioning expected in Q2 FY ’26. Once commissioned, this facility will help grow profitability in the state as well as provide supply security as brand volumes grow.
As we conclude this quarter, our focus remains unwavered on strengthening our portfolio in both the manufacturing and consumer businesses. The strategic initiatives we’ve undertaken, namely enhancing raw-material flexibility, expanding brand portfolio from regular all the way to luxury categories and entering new markets, position us well for sustainable growth in the quarters ahead. We are confident that the steps we’ve taken will enable us to continue to deliver strong performance while addressing market challenges proactively.
Thank you. I now request the moderator to open the call to questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from the line of Viraj Mehta from Enigma Investment Partners. Please go-ahead.
Viraj Mehta
Yeah. Hello, sir. Congratulations for great set of numbers. My — so for my first question is your — is in your IMFL business. For the first time, we have grown significantly. We have touched INR100 crores for nine months and we think we might do INR120 crores INR30 crores this year. Can you give what the milestone that you’re looking for next year in terms of revenue?
Shekhar Swarup
Yeah. So we — our growth rates are not going to sustain at these levels, obviously. However, next year is looking quite promising already with key excise policies that have been announced in Rajasthan and Utty Pradesh. And next year, we should look at strong growth. However, certainly not the level we have shown this year.
Viraj Mehta
Right, but I think is INR200 crore possible from INR120 crore this sir?
Shekhar Swarup
So in our internal budgets, we do not expect to reach INR200 crores next year. However, we will certainly be at excess of INR200 crore run-rate, if you were to look at where we end the year. But no, in the year, we will not cross INR200 crore revenue.
Viraj Mehta
Well, Sir, my second question is with the ENA and ethanol business. With the price change that we talked about, the procurement price at what it is set and ethanol at INR58 rupees. On a whole year basis, now obviously, we have had our capacity run-down significantly because of the lower spreads that we are making less than INR1 EBITDA. Is it fair to assume that next year we should be running our facilities at 80%, 85%, 90% utilization for the full-year?
Shekhar Swarup
Absolutely. So that’s exactly the point. In Q3 and Q4, we have prioritized a lot of our maintenance activities, which would have happened in the coming quarters or in the coming year. So the plan now is to be running at as close to full as possible.
Viraj Mehta
Right. And with the prices like they are today and even the maize prices where they have corrected slightly, and the mechanism — I mean the upgradation of the maize facilities that you were talking about. On the overall business on the manufacturing side, do you think we can do INR6, INR7 next year in terms of EBITDA per liter?
Shekhar Swarup
Yes, that’s what we expect for next year to be around INR7 a liter. The other thing is, you know, there’s this new policy that has been announced and contrary to some of the call — some of the statements I’ve made on earlier calls about volatility of margins, we now expect margins to be extremely range-bound. My sense is an average of 7% for the year and maybe, 20% 25% plus/minus of — from there you know the spikes that we had of INR20 rupees margins and the lows of the current environment, zero to one rupees this environment is behind us and we are very — we welcome this new policy as being a very proactive and well thought through policy for the industry.
Viraj Mehta
Right. And sir, my last question is in your country liquor business. In-country liquor, sir, we just have got price hike in Rajasthan. Rajasthan would be 50% of our revenues. Is that correct?
Shekhar Swarup
No, no, it’s larger. Rajasthan is currently it is the largest contributor to the regular and others. You know, if I remember my number correctly, it should be around 80% to 85%. Nilanjan, please correct me, sorry.
Viraj Mehta
Okay. It is 80%, 85%. So this inflation price increase that we have got, is it fair to assume that a significant portion of that will directly flow down to our EBITDA because I mean, whatever prices they had to increase in terms of cost and in terms of packaging costs, they have already happened by Q3?
Shekhar Swarup
Yes. The caveat to this is the mix of brands. It’s not a — we announced that it’s increased by 4.35%. It’s not 4.35% across all brands or across all categories. So we have to see how the year shapes out, but suffice it to say a large part of it will slow-down to EBITDA. In the coming year, we are also expecting the regular category in UP to grow in volumes. And till our distillery comes up in UP, those volumes will be at a lower-margin than Rajasthan. However, after our distillery comes up, the margin in UP will be similar to that of Rajasthan. So we will grow our margins, but in the first-half, there is going to be some downward pressure because of the UP volume growth.
Viraj Mehta
Right, right. And what’s the kind of volume growth you are expecting in regular?
Shekhar Swarup
So Rajasthan is going to be single-digits volume growth next year. UP is — UP can be very exciting. As I mentioned on the earlier call as well and in fact some other interactions I’ve had in the last few months, we are still sort of testing waters in UP, we’ve done last month, I believe 13,000 odd cases in UP regular category. So let’s see how it shapes up, but it can become very interesting next year.
Viraj Mehta
Okay. And sir, my last question is, at what revenue do you think we will breakeven in IMFL business?
Shekhar Swarup
I think it looks like breakeven is around the corner for the — for the division. And I hope in the next year, we are certainly expecting to breakeven in at least 1/4 or maybe more.
Viraj Mehta
Sure. Thank you so much and best of luck, sir.
Shekhar Swarup
Thank you.
Operator
Thank you. The next question is from the line of Dhwanil Desai from Turtle Capital. Please go-ahead.
Dhwanil Desai
Hi, good afternoon, sir. Sir, my first question is on side. So our understanding is that it’s a — it’s a business where basically you work on the distribution side and then it’s a cost-driven business brand that’s very digital role to play in that. And if I look at the UP market, top three, four guys are already 50% of the market-share. So how do we intend to kind of get into that market and scale-up? And any kind of a volume indication that you can give over next two, three years where you want to be in terms of market-share.
Shekhar Swarup
So firstly, I’d like to — I’d like to say that brand is in fact a very important aspect of all categories in the consumer business. The amount of budgets we have to spend on branding varies dramatically between categories, obviously, but brand is a very important part of the regular category as well as the premium category. And that’s why we — we have a situation like in Rajasthan, our brands has got a strong traction and we are able to command our market shares and increase our profitability over a period of time. And similarly in UP, there is going to be a process of breaking into the brands that are there already. There is — the UP market is growing so we get that advantage in that state, but we have to be able to acquire consumers from other brands. And you know, like I said for the — when I was answering the earlier question that we are currently in the proof of market stage we’ve sold 13,000 cases last month. Coming to-Q1, Q2, I think we’ll be in a better position to give you a little volume indication volume growth indication.
Dhwanil Desai
Got it, sir. Sir, second question, I think you mentioned in your answer to earlier participants that with the new policy regime you expect less volatility in margins. So can you expand a bit on that? Why do you think so? And also this our pathway to that INR7 per liter on the manufacturing side, will it be incremental every quarter or there will be a step jump if you can talk about the trajectory on the margin improvement side?
Shekhar Swarup
Yeah. So the reasons why volatility will be down. And the largest reason is that FCI which is in fact the largest buyer of rice in India is now become a supplier of rice and it is a new source of rice or raw-material. So in addition to the broken rice that we buy from the market or the maize we buy from the market, now we have the ability to buy raw-material from FCI. And so automatically broken rice prices came down and maze prices came down. Also, of course, FCI is giving this raw-material at a fixed-price throughout the year. So it creates a ceiling to raw-material prices as well as the floor to our margins.
The other — the other factor to help reduce volatility is our ability now to purchase mays in-season and consume it in the off-season. In my opening remarks today as well as on the earlier calls, I spoke about how important this is going to be for the company in the summer month — in the summer crop of this calendar year. So we look-forward to that as well. Both of these things give me reason to believe that a reason to expect that margins will be range-bound and less volatile.
Dhwanil Desai
Okay. Got it, sir. And last question from my side. So there are — if you look at the margin equation, one-side is raw-material donors, another side is finished good, which is ethanol pricing. Now we have got some comfort on the raw-material side of it. But as a risk from an outsider perspective is that eventually at some point in time, government may say — come and say that the ethanol prices will get reduced because they want to cap some margin. So do you see that as a risk or is that a theoretical concept?
Shekhar Swarup
So the ethanol prices are a function of raw-material cost as of now. So 5850 is a result of raw-material being at 2350 and of course, that applies to rise from FCI. Similarly, there is a comprise of 64 for broken rice and INR70 — nearly INR72 for maize. And those prices are a function of the raw-material costs of the respective raw-material cost. And currently, the scenario I see is that India, Indian government is very keen to reduce its import dependence as well as reduce its need for ForEx. And for that reason, ethanol is being pushed fixed in a very strong manner. There’s currently a discussion that is on for taking ethanol blending from 20% to higher levels. Brazil is — Brazil base blending is at 27% and then there are few types available at higher blends on — so as of now, I do not see this as a significant risk. Of course, the government does have that control of as it does for numerous other things, which are part, which impact our P&L account and balance sheets. But I don’t see this as a very significant risk in the medium or long-term.
Dhwanil Desai
Thank you very much after the conference. Thank you very much for very detailed definition and wishing you all the best.
Operator
Thank you. The next question is from the line of Vedant Bhasin from Minerva Asset Advisors. Please go-ahead.
Vedant Bhasin
Hi, am I audible?
Shekhar Swarup
Yes.
Vedant Bhasin
I just wanted to understand — I had two questions. Firstly, I wanted to understand — I’m sorry if this is a repetition, but how long does it exactly take for the transmission of rice cost, any impact of rice cost to our EBITDA per liter.
Shekhar Swarup
No, the earlier participant asked that, I missed answering it. So you know, I — it’s a two-step process in my view. One-step is already complete, which was the announcement of policies that has already reduced raw-material prices across-the-board, maize and broken rice. But even still — but as we speak today, FCI deliver delivery of raw-material has not yet started. We expect that to begin in the second part of February at some point. So you know, some part of cost decrease has taken place, another part will take place once supply starts. So my sense is by end March or mid-March, we would firmly be in the new pricing environment and thereafter it will become a range-bound from there.
Vedant Bhasin
All right, understood. Hi, thank you. That was helpful. Next is my question on IMIL on the country liquor. So we’ve constantly reported margins in the range of about 17% to 18%, sometime higher than that also. I see that not consistent with other players, like other competitors usually view this as a much lower-margin business. So is that a state thing? Is it that Rajasthan has much higher margins and maybe UP or Madhya Pradesh, wherever else we decide to expand margins will be significantly lower?
Shekhar Swarup
No, that’s not — I’m not able to comment on the margins that other people report. However, for Global Spirits, we believe that, 16% 17% is the long-term sort of margin that we’re going to get from the regular business. UP, as I mentioned earlier, up till the time our distillery comes in will be much lower, very reduced margins. But from the time our distillery starts up, we will be back to our average margins. The other thing is we will — we will only do this business in states where we believe that we can you can have these margins and also sustain them over a period of time?
Vedant Bhasin
All right, understood. If I can just squeeze in one small other question. As a percentage of all our raw-material, how much — if you can give us sort of split between how much would raise, be, how much would corn oil, B, how much would maize be rice, corn oil and maize.
Shekhar Swarup
Now for the quarter gone by pretty much I think 80%, 90% of our ethanol was made from maize and the rest was broken rice. For our ENA business, it was all rice.
Vedant Bhasin
All right. Got it. Thank you. Unfortunately, don’t have the breakup in terms of percentages of all of this, but that’s just to give you a sense of what the strategy was in the last quarter.
Operator
Thank you. The next question is from the line of Nitin Awasthi from InCred Research. Please go-ahead.
Nitin Awasthi
Hello, sir. Some questions on different aspects of the company. Firstly, on the IMSL side, of course, when we started-off the business, due to our mix and let’s say other factors, we would have a lower per case realization than the optimal level which we could have with the brand mix. Given that as an understanding, if that’s correct or incorrect, please guide me, apart from volume growth, wouldn’t this number also start growing?
Shekhar Swarup
I don’t think there is a there is a necessarily a correlation in that figure, in those two figures. But strategically how we are driving our business is that till now we’ve had a portfolio which was heavily skewed towards prestige and premium these categories. In other words, some companies Call-IT the mainstream category. We are in the last one year, have created products and launched products in the luxury space, single. Of course, Terai has been there for a longer period, but Duab was launched last year as a single and a new variant of was launched, which is and. And so we do foresee our luxury portfolio growing much faster than our mainstream and therefore, the NSV or the net sales value per unit will grow, but that’s how we’re looking at this.
Nitin Awasthi
Yeah. Noted, sir. So in that, is it a — will it be a good understanding that the current per case realization in IMFL reflects predominantly your premium segment and your prestige segment?
Unidentified Speaker
Can I — can I answer that question?
Shekhar Swarup
Yes. Yeah, go-ahead.
Unidentified Speaker
Yeah. See, Nitin, currently, what we are selling is more on the deluxe segment, right? I can understand your question. What we are selling is more on the Deluxe segment. Our future strategy will be the sale of the Deluxe segment will remain the same. In fact, it will grow, but what will also grow is the sale above the Deluxe segment, which is the, the premium segment, the luxury segment, which Sheikhar is pointing out. So what will happen is the NHB multiplier and the EBITDA multiplier will be higher, remain — while the volumes of the Deluxe segment remains the same with the growth in the regular — in the Deluxe segment. Have I answered your question?
Nitin Awasthi
Yes, sir, perfectly. Sir, next question I had was on the IMIL side. On the IML side, once our distillery is up and running, would we with the distillery in Uttar Pradesh be qualified to receive the molasses under the state excise policy?
Shekhar Swarup
Yes. Yes, it. From the current year itself?
Nitin Awasthi
Yes. Noted, sir. Next question, sir, I had, bulk alcohol volumes were not mentioned in the presentation. If you have that figure, could you please provide the bulk alcohol sales during the quarter, which is ENA plus ethanol, do you have that? Bulk sales in the quarter you want?
Shekhar Swarup
Correct, sir. One minute if it’s okay, we’ll go to the next question, Nilanjan will come in and we’ll give it to you.
Nitin Awasthi
Okay. Okay, last question from my side was, there were ESOPs given to employees. I think all of the ESOPs have got converted as per the result notes and now that the ESOPs have been converted to shares, has our EPS been adjusted? So the numbers? Has our what — sorry, the last part of the question I didn’t gather. So ESOPs were converted into shares, ESOPs issued earlier to employees. Now has the EPS been adjusted accordingly in the current numbers reported?
Shekhar Swarup
Nilanjan, you’ll have to answer that I don’t know.
Unidentified Speaker
Yeah, yeah, it has been adjusted. It has been adjusted.
Nitin Awasthi
Understood. So this time around, it is adjusted. And last year it was a lower number of shares. Of course, EPS would be a visually higher because you had a divider number increasing this year.
Shekhar Swarup
Yes, yes. And to answer to your previous question, the sale for this quarter of bulk spirit is 39 million liters.
Nitin Awasthi
Understood, sir. Thank you, sir. That’s all.
Shekhar Swarup
Thank you.
Operator
Thank you. The next question is from the line of Ankit Gupta from Bamboo Capital. Please go-ahead.
Ankit Gupta
Thanks for the opportunity. Sir, my first question is on the IML side. We have done — been doing 17% 18% kind of margins here. So what we understand from other players is that it’s largely a quota-driven market. So — and you — and we have a very large market-share in Rajasthan and contributes almost 80% of our sales. So if you can talk about how we are able to generate such healthy margins in the IML segment and what can be the sustainable margins here over the next two, three years with UP also coming in and we continue to remain a large player in the Rajasthan market.
Shekhar Swarup
So sir, I so I spoke about this a little bit earlier as well. And every — I’m not able to comment on how other players report their margins. But for Rajasthan and for UP, which are our focus areas for regular and others. These are open markets, there is significant brand salience. We are fully-integrated in Rajasthan and will be fully-integrated in UP and because of the way we structure our business, our own know-how of production and manufacturing as well as marketing these products, we are able to command these margins. In my view, 16% 17% is the long-term sustainable margin for our regular and others segment. It does come off once in a while because you know, in this quarter, it was 14%, but we get price increases every time there is cost inflation. So average is a, 16% 17% type of EBITDA margin.
Ankit Gupta
Sure. And on the IMSR side, with the kind of growth you have…
Operator
Mr Ankit, your voice is not clear. I would request you to please use your handset.
Ankit Gupta
Sir, I’m on handset only. So my second question was on the IMFL side. With us doing so well in the IMFL side in this quarter and plans to grow further during next few years. How do you see the marketing spends here? And as I think as I heard it correctly, you said that over the next two, 3/4, we should become profitable here. So normally we’ve seen the company spending quite a bit on-brand development and marketing and advertising. So what are our plans for that there?
Shekhar Swarup
So we’ve been sustaining investments in this division over the last three or four years at between INR15 crores and INR30 crores per year for each year, different years, it’s been different amounts. So there’s been significant investment that has happened. We are now reaching the critical math that where our — you know, our gross profits are able to take care of our marketing spends. So as of now, nothing significant plan in terms of additional investment. As I mentioned, hopefully, we’re going to have at least 1/4 or maybe more than 1/4 of zero or slightly positive contribution from the Prestige and above segment.
Ankit Gupta
Thank you.
Operator
Thank you. The next question is from the line of Kiran from Table Tree Capital. Please go-ahead.
Unidentified Participant
Hi, sir. Couple of questions. One much broader question, sir, FCI has committed INR22 or around INR22 of raw-material. One, is SCI actually giving that raw-material or is it just a fictional price with no volume offtake? And upon part B of the question is, I mean, this time we had a bumper rice crop and therefore FCI wants to probably supply ’22. So I would like to broadly understand how you are foreseeing over the next two, three years, not very long-term as well, INR7 per liter kind of spread given FCI is fairly fickle in its policy every year depending on the rise output?
Shekhar Swarup
Yeah. That’s a great question, sir. The first point is that supplies haven’t yet started, but in my mind, there is no-risk of no supply now that material is going to going to start coming in-between one-week to three weeks period. So contracts, etc., are all happening. So there’s no-risk of no supply now. Your second point about the sickle nature of FCI, I think that’s a really valid issue. And something I’ve spoken about in the last call as well that for Globus, the priority is mazed ethanol. And for that, we need to secure raw-material in the season time and use it throughout the year. For that, we need to invest in corn oil capability to grow our efficiencies in Mays. So this I see FCI as a stop-gap arrangement. I see FCI for one year, maybe two years to help the industry transition to maze. Maze cultivation too needs to grow. We’ve seen very good growth in the winter crop, but that’s pretty much a South and West India focused crop. We are hoping for good growth in the summer crop as well. It’s looking pretty good so-far. So another year or two of this kind of growth and then the ethanol industry doesn’t need rice because we’ll have enough mays to sustain ourselves. And Globus’ plans here are very clear. We need to buy maize in the summer and use throughout the year. We need to have corn oil to increase our efficiency. So that work is on 100% so that we are not dependent on FCI in the long-term.
Unidentified Participant
Got it, sir. Got it. No, no, that was a very response sir. Thank you much. And second question, sir, on Prestige and above, so we have grown from INR45 crore to — I mean, we’ll probably grow to INR110 crore INR120 crore INR130 crores this year and maybe INR130 crore INR80 next year. So what is leading — I mean Kerai has been our brand for a very long-time. Is it, which is leading this revenue charge or is it open? I mean, are there like specific brands which are picking off in a big way that is leading to this growth? I mean, it’s a fairly fast-growth, right, from 45 to 120, 122, 160 130, whatever the number is, right? So are there any specific brand, sir, because Terra has been there for us with us for a very long-time. Thanks.
Shekhar Swarup
‘m going to ask Rajesh, who is with me. I introduced him earlier as Business Head for the Consumer Business. He is filling in on Param’s behalf today. He is going to take this. Not only Tarai, Dohab, Tarai Lichi, Mountain of Brothers and Company and Vodka, entire portfolio will lead the growth in future. No, no, sir. So my question is from INR45 crores to whatever, we’ll end-up at INR110, 120, we are already at IN 100. So I’m assuming very conservative numbers. So 45 to 110, let’s just talk about the present, forget about the future, this delta of INR75 crore has come primarily from A, is it pricing or is it B, a lot of volume of Dohab and 7th Heaven, which is generally my question for the present year. Lot of volumes, a lot of volume of and, Karai, Mountain Oak and Brothers; Company and Slowski. Entire portfolio is going to contribute in future growth and it has contributed in this year. Was launched this year and the big — the big two brands that have moved the volume this year are Mountain Oak and. Okay. And luxury has — we are projecting higher-growth for luxury in the future.
Unidentified Participant
Got it, sir. So you’re saying Doab and Schnoski were the two brands which pushed us now.
Shekhar Swarup
No, I’m saying Schnoski and Mountain Oak and brothers. These three brands have contributed thus far and we are projecting Doab and Tirai to have higher-growth in the next period.
Unidentified Participant
Okay. Perfect, sir. Perfect. Thank you so much. I’ll join back-in the queue.
Operator
Thank you. The next question is from the line of Rohan Patel from Turtle Capital. Please go-ahead.
Rohan Patel
Yeah. Thanks for the opportunity. Am I audible first?
Shekhar Swarup
Yes, sir.
Rohan Patel
Yeah. Sir, my question is regarding IMFL. In that I want to divide it between the premium category, the luxury brands and the non-premium, same in prestige and above, but the value category of prestige. What we have understood is the non-premium, non-luxury segment is a massive market. It’s around 120 million, 150 million cases market, but while the market is very competitive and dominated by three players and they have a lot of brands over there, plus there is a stickiness towards those brands. So how would you intend to gain market-share over there? What are you doing to like gain market-share over there? Like can you explain us your initiatives and strategies for gaining market-share over there?
Shekhar Swarup
Let me attempt to do that in sort of a nutshell. So we are focused on nine states of India. There are 30 plus states and union territories. We are focused on nine. And in those nine, the total addressable market of the luxury segment is 58% of the total India market and the total addressable market of the mainstream, non-luxury prestige and above is close to 70% of the all-India market. So we pick these nine states basis a careful evaluation. Secondly, our brand portfolio is engineered based on the opportunities in these states rather than create brands first and then position them all over. We have selected certain categories, certain brands for these nine markets.
In these nine markets, we believe we have reasons to win for the categories that have gone — for the products that have gone in and the categories we have launched are high-growth categories for those states. So the way we look at-the-market is not an all-India strategy. It is a market-by-market strategy and it is quite different from how the top two or the top three companies in India would look at this market because for them, there is a pan-India strategy and so on. For us, it’s a very focused strategy to win in these nine markets. I’m happy to say that from these nine markets, three markets we have already begun to win in and those markets are Uttar Pradesh, Delhi and to some extent West Bengal, so maybe 2.5 markets. The other six markets, we are newer entrants, we are still challengers over there and we hope to convert one or two of those six markets to winning markets in the year to come.
Rohan Patel
Okay. Okay, that was fair enough. And on-top of the single mall that we have brought in Duab as well as some of couple of brands which are again a premium category for us.
Shekhar Swarup
What we are — if you can provide your view on this, what we have understood is that the brands of which are doing well in single malls or say ultra-premium or ultra luxury are the ones that had a very stable and large market-share in prestige category or higher prestige category. And on-top of that, they have been able to push these brands. But what we are seeing is we have brought brands for prestige as well as for super-premium and luxury. So how will be able to balance this both? Like we need. Again, the answer to that is a state-by-state answer. There are certain states where we are only launching luxury. There are certain states where we are launching the entire portfolio. So you know, we don’t believe that there is one formula to win. There are multiple formula for each state, there is a formula that we have and that formula will be different for a UP, for a Delhi, for a Bengal, for an Utra Khan and for the other states. And just because the others have done it in a certain way, that doesn’t mean that there isn’t another way to succeed in the markets that we are focusing on.
Rohan Patel
Okay. Yeah, thanks for that. And just last two questions. If you can give us in roughly percentage like which the three brands that you say,, Mountain Oak and Brother Whiskey, which has contributed to our prestige and our segment. So out of 0.7 million that we have done for nine months, how much would be a percentage from three brand, that’s not ski card.
Shekhar Swarup
Yes so if I take this three and give a number of 100, 75 will be from Mountain Oak and the — and almost 20 or 18 odd would be and the balance will be progressed.
Rohan Patel
Okay. And one question regarding this ethanol and ENF side. Considering this new raw-material pricing environment, so how will we going-forward, like what would be our raw-material mix? Are we going to be 80%, 85% ethanol coming from maze or we will be going back to a little bit towards the right if you can explain the whole…
Shekhar Swarup
I’m not able to project that currently. We are in a changing market scenario right now. And I believe, as I said earlier, around 15 to 31st of March, that period, the market environment would have changed and after the deliveries from FCI start. In my view, for this year, it should be around 50% maze and the rest of it a combination of FCI and a rise from the market. But you know, this figure could change dramatically. It changes on a month-on-month basis depending on essentially trading tactics for that month. But suffice it to say that because of this new source of raw-material that we have, margins or rather price volatility of raw-material is going to be dramatically reduced.
Rohan Patel
Okay. And considering that there is flexibility of changing the raw-material mix, so say that now rice becomes way favorable going three months out, just an example. So how much time will it take for our facilities to start using rise and 15 days it takes 15 days.
Shekhar Swarup
Essentially, it’s just a period of building some operational inventory and reducing it and then building it again. So 15 days, but and zero downtime in-production.
Rohan Patel
Okay. Okay. Okay. Okay. That was — it is very much a commodity — commodity trading driven call.
Operator
Thank you. The next question is from the line of Anil Shah from Insightful Investments. Please go-ahead.
Anil Shah
Yeah, hi. Thank you and congratulations for a decent set of numbers, sir. Sir, my question is on the regular — first question is on the regular side. You talked about margins. Obviously, you also talked about a price hike, which has come through from Rajasthan. But at the same time, we are also entering UP and there the margins will not necessarily in the initial part be strong. So what can we take as far as margins is concerned, given the mix that Rajasthan and UP will have in the first couple of quarters, sir?
Shekhar Swarup
So you know, for Rajasthan, it’s far more predictable, obviously. Correct UP, I’m not in a position to predict volumes as of now. But UP business first couple of quarters, my sense is breakeven and Rajasthan, of course, will grow a little bit from where we are right now. Once we cross the first couple of quarters, that’s when I can start giving you some indication of the volume mix from UP. So at this moment to give you a — an average margin will be difficult, but UP is going to be small right now on our overall volume. So we can take about 15% 16% as base margin, sir, for a combined regular for both? Yeah. Yeah. Certainly, 15% 16%. I think so.
Anil Shah
Yeah, okay. And just as a guesstimate that. Yeah, because I don’t know what UP volumes will be. Understood. Understood. And sir, when does the distillery come into in operation in UP? And by when does UP margins become Q2 FY ’26, so another — so we are just Q2, so we are only talking about two-quarter margins now, 4th-quarter and first-quarter, correct? And after which the margin will be similar. Q4, Q1, Q2.
Shekhar Swarup
Okay. Okay, it comes in operation in Q2 during the course of that Q2, so yeah, 3/4 margins, which — but after that will be in-line.
Anil Shah
Yes. Okay, no, another question is, what is our capex plans for the next two years? We should be done with the distillery in the UP, we’ve kind of done with the technology improvement that we wanted to do for the manufacturing business. Any large plans over the next two years over and above the regular maintenance capex?
Shekhar Swarup
No, no large capex planned currently.
Anil Shah
No large capex plans, right? And third — sorry, yeah. And third and last question, sir, on Prestige and above, if one has to take a kind of a three-year out view from here and given what you’re planning to do in terms of newer launches and newer markets and you said you’ve got right to win, we’ve kind of seeing early signs in 2.5 markets, et-cetera. Where do we — where can we see this in say 28 or 30 for that matter? Just some ballpark number so that we know in terms of the vision where the management really is looking for as far as the prestige and above is concerned.
Shekhar Swarup
So from these — from the current strategy that we have in-place, have a vision to take this to about INR500 crores type of revenue, INR500 crores. Okay. But you know, the concern on that is I’m not able to give you a timeline or an accurate timeline, but that’s certainly in the four, five-year kind of window, maybe three, four-year window from now. Three to five-year window.
Anil Shah
Okay, sir. Yeah, okay. But we do have plans to you know to move beyond these nine states it’s from these nine states, this is the plan currently there is for the coming year, the — we are going to focus on these nine states.
Shekhar Swarup
Okay. We believe given the — given the market we are able to address in these nine states, there’s enough work for us to do right now.
Anil Shah
Fair enough. Fair. Fair. So when we just kind of do some numbers in terms of the regular business and the manufacturing business now with steady margins, we should be able to see some decent amount of free-cash flow getting generated over the next two years, each of the next two years with not much large capex plans, we should start seeing you know, whatever little leverage that we have should also be reducing and we could becoming net zero-debt company in the next two years. Is that fair?
Shekhar Swarup
Yeah. There’s going to be a fair amount of cash coming in now, especially because prestige is breakeven level soon and the manufacturing business margins are going to become far more stable and interesting. And a lot of that, given that there is no significant investment plan will go into debt first, obviously.
Anil Shah
Perfect. Thank you very much and best of luck, sir, for the coming year ahead and the 4th-quarter.
Shekhar Swarup
Thank you so much. Thank you.
Operator
Thank you. The next question is from the line of Aashish Upganlawar from InvesQ. Please go-ahead.
Aashish Upganlawar
Yes, sir, just wanted some data points on the manufacturing segment, what would be the volume of sales that we would have done for the nine months of this year? And what’s the capacity utilization that would have meant?
Shekhar Swarup
I mean, Nanjan, can you take this please?
Unidentified Speaker
Yes, sir. On the manufacturing segment, am I audible?
Shekhar Swarup
Yes, yes.
Unidentified Speaker
On the manufacturing segment, on the nine months the revenue we have done was volume, we have done almost 138 million liters and the capacity utilization of nine months put together. No, I have a quarter one, quarter one is 50, nine months data will be in the range of 70% 72%. Nine months will be 70% plus utilization, is it?
Aashish Upganlawar
Okay, because I think in the presentation, you’ve given Q3 to be 50% and you’re saying Q1 is 50%. Q3 is 50% and Q1 was also 50, is it?
Shekhar Swarup
No, no, no. Q1 — I don’t have the Q1Q number with me. I’ll send it across, but that’s the Q3 number that I have.
Aashish Upganlawar
Okay, okay, okay. So I think if there was no capacity enhancement between FY ’25 and next year, there won’t be any changes in the overall capacity. So is it fair to assume that…
Shekhar Swarup
I mean, we would be going to maximum capacity next year given the — aside from UP, so UP capacity will get added, that’s dedicated to the consumer business. I don’t foresee much of a — there is no ethanol over there that I don’t foresee much of ENA sale either, maybe a little bit. But aside from UP, yeah, we should be high-capacity utilization in the coming year.
Aashish Upganlawar
Yeah, right. So on the manufacturing side, the capacity utilization, which is around 70%, it will go to maybe 95 plus next year. And our profitability, you’re saying that maybe a rupee was the profitability. This year it will go to maybe INR5, INR6 kind of. Is that the right assumption, sir?
Shekhar Swarup
Yeah, okay. Okay. And so we should be able to achieve our INR7 rupee our historical average of INR7, I think we’ll be able to achieve that this year. In the coming years.
Aashish Upganlawar
Yeah. One more thing. I mean, still the rice procurement from FCI is still to come, but how would you expect the maize prices to behave or is it already being seen in the maize prices in the market?
Shekhar Swarup
So a lot of — some of the change has already happened. I think another round of change will come when the when the FCI material starts getting delivered. So in my view, May should open in the summer around the same level as it did last year. So what this will — what this FCI thing will announce is the increase in-demand of raw-material is what FCI is going to be able to cater to. So should go back to the levels it was last year even keeping in mind the growth in cultivation. But let’s see how it shapes up.
Aashish Upganlawar
Okay, okay. So would that —
Shekhar Swarup
I mean, any rupees per kg kind of estimates given the yield that you guys work with around INR22 at farm level. Okay.
Aashish Upganlawar
So, yeah. Yeah. And your procurement because this announcement came later, so your procurement for the season would have been for of May at what prices?
Shekhar Swarup
Oh, no. So the season — the winter season does not really benefit our company because the winter season is the south and West India season. For us, the season in — that is relevant is the summer season. So that’s yet to come.
Aashish Upganlawar
Okay. Okay. So you don’t have a problem. For us. The timing of this announcement is fantastic because it’s just before the summer crop.
Shekhar Swarup
Yeah, otherwise you would have been stuck with inventory of higher costs.
Aashish Upganlawar
Yeah, yeah. Yeah, great. Great. Fine, sir. Thank you so much.
Operator
Thank you. The next question is from the line of Deepak Ajmera from IGE India. Please go-ahead.
Unidentified Participant
Thank you. Thanks for the opportunity from here, in three to five years, what will be the growth driver means prestige and above you said…
Shekhar Swarup
I’m not able to share your clearly.
Unidentified Participant
Yeah. Can you hear me now?
Shekhar Swarup
Yes. Go-ahead.
Unidentified Participant
Yeah, yeah. I’m saying it from a — from here on, in next three to five years, what will be the growth driver? And above, you said around INR500 crore maybe in three to five years. And what will be the vision towards regular and manufacturing ethanol?
Shekhar Swarup
Regular — the current run-rate is around INR900 crore revenue annual and ethanol looking at this quarter and capacity utilization, INR2,000 crores is the — is the revenue potential, what will be the future and the number which I have told that it’s correct or not. Yeah. So for regular, the — I’m not able to do a projection till such time as we are able to stabilize our launch in UP, which would be done after H1 of the coming year. And as a result, I have not given any forecast for that business. And the Rajasthan business will grow at, you know, mid to low-single digit numbers in terms of volume and also it will grow in terms of profitability.
Coming to our manufacturing business, I foresee this to grow to some extent in the coming year, given that our capacity utilization has been low in the current year, but that would be the level at which it then peaks out at. As our consumer business grows, we will naturally increase the supply of product to our consumer business away from the manufacturing business and therefore, there should be some degrowth in manufacturing starting in FY ’27. Yeah. So what will be the growth driver, not near-term means maybe after two, three years from here. The growth driver in manufacturing, I do not see one, but the growth drivers in the company are going to be the prestige and above segment and the regular and other segment.
Unidentified Participant
Got it. Thank you. Thank you so much.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question you. The next question is from the line of, who is an Individual Investor. Please go-ahead.
Unidentified Participant
Hi, good afternoon, gentlemen. Thanks for the opportunity. Shekhar, did you mention the broken rice prices and maize prices? Sorry, I missed it.
Shekhar Swarup
For the last quarter, no, I did not. So the last quarter, maize prices were — well, in December exit December, maize prices were around 26 and exit December rice prices were about, 28 50 29 and I think as we speak, for broken rice, I think it is about 25% 25.5% and for May, it must be low, right?
It’s between — it’s — all-India would be about 2650, different — yes, it is about 25 in say Rajasthan, but all-India is about 26 2,650 and maze is currently 2450 25, right?
Unidentified Participant
And you know, Sheikhar having this background of about 22.5 INR22.5 from rupee rise price from this FCI. So do you think this will set the base profitability for the industry or not?
Shekhar Swarup
Yes, very much. This will set the base profitability for the industry. And may — maize will be in my view with intelligent procurement of maize as well as with corn oil, maize will be more profitable than this, right?
Unidentified Participant
So maize will be more profitable and do you? I mean you mentioned it, but still confirming you want to use maximum maze for ethanol, right?
Shekhar Swarup
Yes and no, I mean, it depends on the — how much we are able to procure in the summer season that will be the number-one priority. And thereafter, you know from the open-market in the off-season, I believe the maze profitability and the FCI profitability will get matched. Right. And coming to profitability from FCI, see, I think when FCI rise was about INR20, the selling price was same, right, right, INR58.5%. Yeah. Now it is 22.5%. So this is net-net, INR5, INR6 increase on the raw-material cost. So basically, you know, I think this is hardly will give up. It’s about INR4 — INR4 rupees, not INR5, 6, 4, INR4 okay, so let’s say INR4. So then out of whatever seven, eight people were making, four has gone, right? And then people are left with three, four or add-back INR4.5 rupee EBITDA per literally.
Unidentified Participant
Yeah. So if this is the base, how would you then reach INR7 rupees on an average. Because firstly, for us, it’s not 3.5%, it’s a little bit more because of the way our plants are engineered in our ability to run these plants. But anyway, FCI is the base. We get additional margin from ENA and we get additional margin from when we run these, right? So that’s how I foresee us reaching INR7 rupees a liter average for the coming year. Right. And one question on the IMFL side. Are you also tracking — I’m sure you are tracking the secondary sales of IMFL, you know, because this quarter we have seen a very, very-high growth. Are you also tracking the secondary sales? How has been the secondary sales?
Shekhar Swarup
Yeah. So these are — these are based on secondary sales. I mean our secondary sales are equal to sales. So there will be no primary if there is no secondary. You know, we are not in a position where we want to cash-out or raise funds or any of that. We have no intention of showing higher primary sale as compared to secondary sale.
Unidentified Participant
Right, right. Just one last thing on — specifically on Mountain Oak. Can you tell us the growth in Mountain Oak in this quarter and the channel check suggests that at least the whiskey is not — the toptake has not been very, very good in Q3. So just curious to know the growth for Mountain Oak in Q3 and how — from which states are there to help you with this growth?
Shekhar Swarup
Sure. So our states, our key states in the nine months gone have been Delhi, UP and Bengal. And there are six other states, but there we are newer entrants, we are still challengers. Our key states are Delhi, UP, Bengal, Milanjan, what’s the growth, please in Q3 of Mountain Oak? Q3 versus Q2 growth of Mountain is flat. It’s a 1%, 2% growth. Obviously, there are reasons behind it. It is end of Q3, the policy formation of different states start coming and there is a slower offtake, which gets accelerated from Q4 and Q1. So if the growth is the same. Imran, what was your next question tagged with Mountain? And also, it was very similar to what you answered. I think I got the gist of it.
Unidentified Participant
Yeah. So I think that’s the — there’s the last question. Thank you very much.
Shekhar Swarup
All right. Thank you.
Operator
Thank you. The next question is from the line of Dhruv, who is an Individual Investor. Please go-ahead.
Unidentified Participant
Yeah, hi. Good afternoon, Shekhar. So just picking-up from your opening remarks on the strategic initiatives, if I was to break it into consumer and manufacturing separately. So picking on the consumer part first, my understanding is that within spirits, as you mentioned, there is a prestige and above, there is a regular. And of course, then there’s a luxury segment which is housed under Thir eye and Dhuab and so on and so forth. Apart from that initiative I’m guessing would also be beer at some point of time as will be a building upon the RTD business that you’ve acquired a I think it’s called not out or something. Now if you were to put all this together in terms of on the vectors of the products and the product categories as well as markets, maybe you could just expand on your opening remarks on the consumer business. Yeah. Sorry, can you — I heard you, but not clear exactly what you’re looking for. Could you please help me?
Shekhar Swarup
Sure. So, sir, you were talking about the strategic initiatives in your opening remarks. So if I have to divide your strategic initiatives into consumer and manufacturing separate, so within consumer, you mentioned what is — I mean, in the luxury segment, in the regular and above prestige, et-cetera, there is also a foray that you’re making into beer as well as the RTD business that you’ve acquired from Not Out. So within beer, RTD, regular, prestige and above, I mean, if you could just expand on your opening remarks in terms of what are your consumer strategic initiatives over the medium-to-long term?
Unidentified Participant
Okay. Okay, okay.
Shekhar Swarup
So for Prestige and above, our strategic initiatives are to focus on growth of the three brands of four brands that we spoke about earlier. And to add new states to the success of Delhi, UP and well, partially Bengal right now. And for luxury, our focus is to create as we have now created a separate team that focuses only on-sale of luxury brands. We are also now looking at states where we will launch just the luxury portfolio and not wait for the mainstream portfolio to be launched in those states and to help drive the volumes in the luxury space a little bit faster. Our mall spirit production facility is another initiative I spoke about, which will help the luxury space as well as the mainstream, but predominantly the luxury space. In terms of regular, the only update there was a UP launch of new brands, the distillery coming up, UP is a vast ocean of our volumes and we hope to become a meaningful player there in the years to come. I did not give an update about beer and RTD at the moment because there isn’t a whole lot to report. We will start informing you about progress there once Q4 is complete.
Unidentified Participant
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr Swarook for closing comments.
Shekhar Swarup
Thank you. Thank you all for attending today’s call. As always, we remain available for questions, clarifications. If needed, please reach-out to us or to our Investor Relations agency, Stellar. All details are available on our website. Thank you, and have a great evening.
Operator
Thank you. On behalf of Globus Spirits Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.