Tilaknagar Industries Limited (NSE: TI) reported a significant expansion in its financial performance for the third quarter of fiscal year 2026, driven by the strategic acquisition of the Imperial Blue whisky brand. The company posted a 95% year-on-year surge in net revenue to ₹664 crore, while operational volumes reached a record 53.1 lakh cases. Investors reacted positively to the results, which underscored the company’s successful transition into a multi-category alcoholic beverage player with a dominant footprint in the Southern Indian market.
Strategic Portfolio Expansion with Imperial Blue
The primary catalyst for the quarter’s growth was the integration of the Imperial Blue (IB) brand, acquired from Pernod Ricard on November 30, 2025. In its first month under Tilaknagar’s ownership, IB contributed 17.9 lakh cases to total volumes. This acquisition has transformed the company’s market position, making it the largest player in the Prestige & Above (P&A) segment in South India, with an estimated 32% market share as of December 2025.
Management noted that the deal includes global rights to the brand and a long-term supply agreement for raw materials, ensuring business continuity. The company has initiated a phased integration plan, supported by global consultants, to realize structural synergies and operational efficiencies.
Financial Performance Analysis
Tilaknagar Industries demonstrated robust profitability alongside its revenue growth, supported by premiumization and cost-management initiatives.
| Metric (Standalone) | Q3 FY2026 | Q3 FY2025 | YoY Change |
| Net Revenue | ₹664 Cr | ₹340 Cr | +95.0% |
| EBITDA | ₹110 Cr | ₹60 Cr | +82.3% +2 |
| EBITDA Margin | 16.6% | 17.7% | -116 bps +1 |
| Net Profit (PAT)* | ₹64 Cr | ₹54 Cr | +18.7% +1 |
| Net Sales Realization (NSR) | ₹1,242/case | ₹1,161/case | +7.0% +1 |
| *Adjusted for exceptional items. | |||
Key financial observations include:
Volume Resilience: Even excluding the IB acquisition, the core business grew volumes by 16.8% year-on-year, reaching 35.2 lakh cases.
Net Sales Realization: The overall NSR improved by 7% to ₹1,242 per case, reflecting a shift toward premium products.
Interest Costs: Finance costs rose significantly to ₹39 crore due to the debt taken to fund the acquisition, though the company remains committed to deleveraging.
Exceptional Items: Reported PAT was impacted by one-time transaction and hedging costs of ₹169 crore related to the IB deal.
Management Commentary and Outlook
Mr. Amit Dahanukar, Chairman & Managing Director, emphasized that this quarter marks the start of a new growth phase. “Our ambition is to evolve into a scaled IMFL company with a meaningful presence across premium price points,” Dahanukar stated. He outlined a goal to expand consolidated EBITDA margins by 150-250 basis points over the next 24 to 36 months through reinvestment discipline and synergy realization.
Ameya Deshpande, Chief Strategy Officer, highlighted the potential for dual synergies: “We expect value creation through unlocking revenue growth via Imperial Blue’s pan-India distribution network and optimizing operational costs”.
Business Strategy and Sector Context
Tilaknagar is aggressively pursuing a premiumization strategy to diversify its portfolio beyond its traditional strength in brandy.
Luxury Foray: The company launched Seven Islands Pure Malt Whisky and Monarch Legacy Edition Brandy to capture the high-margin luxury segment.
Craft Spirits: TI increased its stake in Spaceman Spirits Lab, facilitating entries into the craft gin and vodka categories with brands like Samsara and Amara.
Deleveraging Focus: The company aims to reduce its Net Debt/EBITDA ratio to below 1.0x by FY2029 through strong operational cash flows.
The Indian IMFL industry is currently one of the fastest-growing premium spirits markets globally, expanding at an 11% CAGR. With the integration of Imperial Blue, Tilaknagar Industries has shifted its volume saliency from being 90%+ brandy-focused to approximately 65% whisky and 30% brandy, aligning itself with broader consumer preferences in the Indian market.
Reasons to Pass on TI
- Acquisition-driven growth: Q3 revenue surge was largely driven by the Imperial Blue acquisition, limiting visibility into purely organic growth trends.
- Margin compression: EBITDA margin declined 116 basis points year-on-year to 16.6% despite higher revenue.
- Rising finance costs: Interest expense increased to ₹39 crore due to acquisition-related debt.
- Exceptional charges impact: Reported PAT was affected by ₹169 crore in one-time transaction and hedging costs tied to the deal.
- Higher leverage risk: Debt taken for the acquisition increases financial obligations, with deleveraging dependent on sustained cash flow execution.
- Integration execution risk: Realization of projected synergies from Imperial Blue depends on successful integration.
- Concentration in South India: Strong regional dominance may limit geographic diversification.
- Premiumization dependency: Growth strategy relies on sustained consumer shift toward premium and luxury segments.
- Regulatory exposure: Operates in a heavily regulated alcoholic beverages industry with state-level policy risks.