Tilaknagar Industries Ltd (NSE: TI) Q3 2025 Earnings Call dated Feb. 05, 2025
Corporate Participants:
Amit Dahanukar — Chairman & Managing Director
Ameya Deshpande — President, Strategy & Corporate Development
Abhinav Gupta — Chief Financial Officer
Analysts:
Siddharth Rangnekar — Analyst
Abneesh Roy — Analyst
Vishal Gutka — Analyst
Rishabh Gang — Analyst
Madhusudan Kela — Analyst
Unidentified Participant
Darshika Khemka — Analyst
Himanshu Shah — Analyst
Presentation:
Operator
Please wait while you are joined to the conference. The conference is now being recorded hello, ladies and gentlemen, good day and welcome to the Tilatnagar Industries Limited’s Earnings Conference Call. As a reminder, all participant lines will 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 call, please signal an operator by pressing star then zero on your touchstone phone.
I now hand the conference over to Mr Rangnekar from CDR India. Thank you, and over to you, sir.
Siddharth Rangnekar — Analyst
Thank you. Good morning, everyone, and thank you for joining us on Industry Limited’s quarter three FY ’25 earnings conference call. We are joined today by Chairman and Managing Director, Mr Amit; President, Strategy and Corporate Development, Deshpande; and Chief Financial Officer of the company, Mr Gupta. We shall commence with views from Mr Ukar on the strategic performance and Mr Deshpande on the financial highlights. This shall be followed by an interactive question-and-answer session.
Before we commence, I would like to state that some of the statements made on today’s call could be forward-looking in nature and a disclaimer to this effect has been included in the results presentation that has been circulated to you and is also available in the stock exchange website.
I would now like to request Mr to make his opening remarks. Over to you.
Amit Dahanukar — Chairman & Managing Director
I am pleased to share that quarter three FY 2025 has been another period of strategic progress and consistency in earnings growth for Thillipnegar Industries. The volume performance excluding Andhra Pradesh was on expected lines. Excluding Andhra, our primary volumes in-quarter three grew by 10%, indicating strong growth in our other states, especially the southern states, which grew 11% over the same-period. AP volumes were impacted due to transition on account of the new route-to-market in the state. Despite de-growth in primary volumes, secondary volumes in Andhra Pradesh grew at 8%, indicating strong brand equity for our products. We believe that this period of transition in Andhra is over and is reflected by the fact that we have started quarter-four on a very strong note, having grown primary volumes by 14% in January 2025 on year-on-year basis. We now expect to continue this growth momentum going-forward.
On the NSR front, we had to take a price correction in Andhra Pradesh in order to maintain our competitive position in the state. While the price reduction came through in the last week of November 2024, we had sufficient stocks line in depots across the state. With a view that we did not want to impact movement of the stock, which was at a higher price point, we took a one-time call to reprice all the stock which was sitting in the depots. Hence, while the price reduction approvals came only at the end of November, the impact of the price reduction has been seen for more than two months of quarter three. This also had an impact on volumes due to operational challenges of changing price of stock sitting in the depots.
In terms of our other key states, we saw Karnataka grow by more than 20% year-on-year with quarter three registering highest-ever quarterly volumes in the state. And Kerala have also seen very strong growth of mid-teens. We also saw significant market-share outperformance in Telangana where the IMFL industry was almost flat in-quarter three. We have now expanded our market-share in the state to 7.4% compared to 6.8% in FY ’24.
Moving on to the revenues for the quarter, we witnessed a revenue de-growth on account of the above-mentioned price correction in Andhra, which can be seen from the reduction in NSR per case as shown in our earnings presentation. Despite this, our EBITDA grew by 17% on the back of more efficient selling and distribution spends as well as cost optimization — optimizations undertaking in packing materials. In terms of our profitability, we have reported a healthy EBITDA, both in absolute terms and on margins. Our EBITDA margin for quarter three FY ’25 stood at 17.7%. Going-forward, we expect our EBITDA margins to remain strong and trend in the zone of 15.5% to 17.5% on the back of continued investments in A&SP.
On the debt front, I am happy to share that in-quarter three, we have reduced our gross debt by INR47 crores. This reduction in gross debt was predominantly on account of full repayment of Kotak Bank term-loan. Our aggregate gross debt now stands at INR45 crores with net cash balance of INR31 crores. I will now speak a little on the IMFL industry and the trends which we have been seeing. India continues to see headroom for higher alcobas consumption with significant innovation taking place both in spirit as a category and other allied products. There is a burgeoning cocktail culture which we are witnessing, especially with a large number of legal drinking age population being added every year. Premiumization remains a key driver across all IMFL categories with at-home consumption aiding the growth even post the pandemic. TI’s portfolio reflects these trends with brands across price lagger and brandy as well as other categories. I will highlight a few of our recent initiatives for everyone’s benefit today.
A key highlight of the quarter was the successful launch of Monarch Legacy Edition, our first luxury brandy. Monarch blends French grape spirits aged up to eight years in French oak casks with premium Indian grape spirit from Maharashtra’s region. This introduction into luxury aligns with our goal to elevate the perception of brandi in India. The early response has been encouraging, reinforcing the vast potential for luxury brandi in the country. Currently launched in Maharashtra and international markets, we are excited to soon introduce Monarch in Goa, Karnataka and. Our prestige and above portfolio continues to gain traction, validating our price strategy for branding. The premium segment within the C&D family portfolio has grown further, a trend we expect to continue as consumers seek more premium options. Flandy, our flavored brandy offering is resonating well with a broader consumer base, positioning Brandy as a versatile beverage suitable for various occasions.
On the non-brandy front, whiskey and Assam has continued to gain strong traction, performing well in the semi-premium segment with expanding consumer acceptance. The brand is leveraging our distribution network to strengthen its presence in key whiskey consuming markets. We now also expect to kickstart sales of and Sitara Ram in-quarter four on the back of our usership agreement with Spaceman Spirits Lab. On its own, SSL has seen very strong growth in-quarter three and has gained market-share within the overall premium gin industry in most of the states it’s present in. With softening cost pressures on raw materials and packaging, our premiumization strategy is expected to continue to support margins. While we remain vigilant about E&A price trends, the overall cost environment has been favorable, strengthening our profitability outlook.
In terms of our capex plans, while maintenance capex will range between INR15 crores to INR20 crores, we are exploring making an investment amounting to around INR35 crores to INR50 crores for the expansion of our own unit in Andhra Pradesh housed in our wholly-owned subsidiary Prag Distillery Private Limited. This investment is being considered on the back of the strong growth we expect for our brands in the state. This investment will enable us to expand our capacity from around 6 lakh cases per annum to 36 lakh cases per annum. We expect to have significant operating savings by bottling in our own unit. The additional volumes over and above what would be met by Prague would be handled by our existing contractual units. Looking ahead, we remain confident in sustaining our growth momentum, both on volume as well as profitability front, supported by strong brand and product strategy and disciplined financial management.
With that, I will now hand it over to to provide an overview of our operational and financial performance.
Ameya Deshpande — President, Strategy & Corporate Development
Thank you and a very warm welcome to everyone joining us today. I will walk you through our financial and operational highlights for Q3 FY ’25. Our revenue for Q3 stood at INR340 crores with underlying volume growth of 2.3%. If you exclude the RTM impact in Andhra, the volume growth during Q3 stood at 10% Y-o-Y. And as Mr Dhanukar mentioned earlier, this further accelerated in January 2025 to 14% year-on-year.
Revenue for the first-nine months stood at INR1,028 crores and the NSR per case was at 1161 in Q3. This level is a departure from the growth trend we have seen in the recent past owing to the changes in the RTM in AP. However, we expect to grow our NSR on the back of our continued premiumization strategies on this base. Q3 also saw us delivering our highest-ever EBITDA. EBITDA for the quarter grew 17% Y-o-Y to INR60 crores, supported by ongoing cost optimization efforts as well as efficient levels of S&D expenses. EBITDA margins expanded by 408 basis-points to 17.7% on the back of lower NSR and reduced S&D expenses.
For the first-nine months of FY ’25, EBITDA reached INR176 crores with margins at 17.2%, marking an expansion of 390 basis-points. Adjusting for the subsidy income, EBITDA for nine months stood at INR161 crores at a margin of 15.9%. Similarly, PAT increased by 23% to INR54 crores in Q3, up from INR44 crores last year. For the first-nine months, PAT grew to INR152 crores, marking an increase of 50% compared to the same-period last year. Operationally, while Q3 FY ’25 saw primary volume degrowth in AP, secondary volumes grew 8% in the state. And as Mr Dhanukar mentioned earlier, we have seen initial signs of growth trajectory returning to normal.
Additionally, we are also happy to share that TI market-share as a percentage of overall IMFL in its key southern states has now increased to 6.2% in-quarter three from 5.8% as was seen in FY ’24. Before I close the opening remarks, I would like to reiterate that we remain committed to delivering profitable growth, reinforcing our market leadership and driving innovation within the Indian alcobel sector as we seek to align ourselves to the emerging consumption trends.
With that, I would now request the operator to open the call for Q&A.
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 the 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Abneesh Roy from Nuvama. Please go-ahead.
Abneesh Roy
Yeah, thanks. My first question is on RM. On RM, you mentioned that it is likely to be soft and you did say that ENA we have to be watchful. So if you could tell us for each of your key raw-material in FY ’26, how do you see — do you think that those will be soft on an overall basis, including E&A, what will be your views on each of the components?
Ameya Deshpande
Hi, Abneesh. Thanks for your question. Yeah, so see, for the moment, we are assuming that ENA would range in this — in this region. We haven’t taken any kind of reduction on ENA prices currently right but our expectation is that it shouldn’t be highly inflationary going-forward
Abneesh Roy
What about glass and other raw materials packaging glass,
Ameya Deshpande
So they will be stable, Abneesh. We’ve already seen some level of correction in glass prices over the past few quarters. We haven’t factored in any further savings on that front.
Abneesh Roy
Sure. So you did comment on Andhra market. Now in Andra market, other liquor players have seen good revival and you also had a challenging time there. You have also rationalized the price. So the price rationalization impact will it continue in coming quarters also? And if you could tell us what has changed, was it because you were already doing business there? So for you, the incremental changes are negative. And for the national players in the say whiskey, et-cetera, it was on the positive side with key and beer both. It was on the positive side.
Amit Dahanukar
So I will respond to this question,. I think the one-time price correction which we had to do in-line with competition that has already been affected. And the reason we saw the volume degrowth in Handhra Pradesh was account of the transition, which I have explained in the opening remarks. Going-forward, we do expect it to bounce-back. I think the overall industry also has grown from an average of 28 lakh laks to 29 lakhs. Last two months, December and January, the industry itself has averaged at around 34 lakhs. And we are maintaining our market-share. Importantly, we are maintaining our market-share. Even with the advent of more players in this field, we are still able to protect our market-share. So I think we are on a very strong wicket now. And as the industry grows, we will be in a good position to benefit from this.
Abneesh Roy
So two quick follow-ups. One is, in terms of competition, so is your pricing post the price cut now at par with the competition and the transition impact it is done and dusted?
Amit Dahanukar
Yes, that transition impact is now — is now behind us. It was almost a 1.5 transition period which we had to undergo which was — which resulted in some primary volume degrowth. The second question which I had to respond to is that in terms of the brandy saliency also, it has not changed. In Andhra Pradesh also the brandy saliency is roughly retained at around 35%. So even post advent of other players in whiskey category, the branded at least the last three, four months post RTM change from October has roughly remained the same.
Ameya Deshpande
And, just one more data point on-top of that, right? In Andhra, we actually closed out the quarter very strongly, right? So our market-share in Andhra in December was almost 11.5%, right? This is more than even a our pre-transition market shares in the state. So obviously, Q3 had an impact of October and November. But starting December when anyway secondaries were decent, we were — we did pretty well. And Jan onwards, we’ve seen decent movement on primaries as well.
Abneesh Roy
One understanding I wanted here was now national whiskey players and maybe beer players are also very active there. So consumer essentially has more choice and consumer doesn’t remain married to one segment. If he has more choices, he is very happy to sample. So here, just three months later, you are saying brand is stable. Is that too early to call that out? And second would be in terms of the market-share, this market-share data, which market-share data is it? Is it something which is a third-party data you are referring to?
Ameya Deshpande
No, this is corporation given data, volume data. This is
Abneesh Roy
Data.
Ameya Deshpande
Yeah, yeah. This is on secondary volumes.
Amit Dahanukar
And even the earlier — even from 2014 to 2019, roughly the branded salency has remained — remained same. I mean, even when the whiskey segment was very active, the saliency has remained same.
Abneesh Roy
Understood. Last quick question, Karnataka has done well for you. So if you talk about what’s — why you have gained market-share there and has there been any change in the competition there?
Amit Dahanukar
So Karnatakab, the primary — one of the primary drivers was that the excise duty was reduced on premium products, which led to a price correction and the price correction has helped us and has enabled us to deliver strong volume growth in Karnataka.
Abneesh Roy
How much was the price correction could you tell us at your portfolio level?
Ameya Deshpande
So we reduced — so talking about our NIP pricing, right, 180 ml from INR257 rupees, this came down to INR235
Amit Dahanukar
And this was on account only of excise duty reduction. There was no reduction in X factory or EDP price of the company. The reduction was primarily driven or wholly driven by reduction in the excise duty by the government.
Abneesh Roy
Sure, thanks. Very helpful. Thank you. Thank you.
Operator
Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Vishal from HDFC Securities. Please go-ahead.
Vishal Gutka
Yeah. Hi, team, Vishal here. I just wanted to check what is the quantum of blended price correction in Handra Bradesh that you have taken? And shall it impact the margins for balance one year given that recent price correction has been undertaken?
Ameya Deshpande
Okay. So the price correction in Andhra blended level on a — what do you say, state basis would be around INR200 reduction there.
Vishal Gutka
Okay. In percentage term, it would be what in that specific market?
Ameya Deshpande
Yeah. So earlier the price was somewhere — to be very frank, we don’t provide statewide EDPs, right, NSRs. What I can speak is on — on an overall basis, right? So as you would have seen in Q1 or rather in Q2, our NSR was around 1270, right? So that is the — that is the impact. And assuming around 30% of our total volumes are driven by Andhra, you can kind of get a sense.
Vishal Gutka
Quarter, quarter. This should have an impact on margins for balance 12 months given the price correction will flow-through over next 12 months, although you are in explanation mode, but slight that margin could moderate from here onwards expansion because at least for next 12 months, I agree that premiumization trends have been continuing and commodity costs have been high, but because of this action could be moderation in margin gains that we could see for next four quarters?
Ameya Deshpande
So see the thing is the moderation in margins. So this refers to the guidance that Mr Dhanukar also provided in the opening remarks, right? While we did do 17.7% in Q3, we don’t expect to maintain that 17.7% to be very frank. We are — the guidance that we are giving is in the range of 15.5% to 17.5% or with a slight bias towards the higher-end of the range.
Vishal Gutka
Got it. Got it. And I have one more strategic question is that most of the mainstream liquor companies, they are trying to foray into various new segments like gender and vodka. Just wanted to check from you. Just wanted to get your thoughts on how easy or difficult it is to make a brand and given that in FMBG industry, we have seen that a brand is very, very difficult. And if you can just broadly throw the light, what is the secret for if we need to build a brand in different category or a premium brand, what do you call-in the brandy category? Broader thoughts, I think would be really helpful. Thank you.
Ameya Deshpande
So I think, see, the thing is that from a gym perspective, right, we — we have already backed an existing trending gin, right, in the form of Samsara. So at least on that front, we are fairly clear that it is something — there are certain categories that we would like to do on our own, but certain categories that we believe that there is some amazing work being put in by some young founders that we want to back, right? So Samsara is a part of that. The benefit of investing in a company like Samsara is the fact that it already has a significant brand equity, right? Today, you think of a gym and if there is a ping Jin, anyone wants to have, it is a Samsara Ping Jin. There’s no other out there, right, despite the fact that there are some brands which are providing a. So that is more from a strategic — what we say strategic investment perspective.
Obviously, at our end, when we look to drive any kind of organic growth with new brand — brands coming in, the clear differentiator or the clear identifier over here is the market size, right, and the opportunity that exists out there. And what does it add to the overall — in the overall scheme of things for Industries. So to be very frank, is there any secret sauce? Well, I can’t tell you otherwise it won’t be a secret anymore. But — but yeah, that’s about it.
Vishal Gutka
Got it. And I want to check broadly the — this is more about the recipe, distribution, broader thoughts, what drives — is the product differentiation versus other products available in the market? This is the distribution trend that you have or what are the key modes that are there for a brand to get — achieved strike rate?
Ameya Deshpande
So I think distribution is a key part, right, in today’s times. And that is exactly the reason why we have come up with whiskey in the semi-premium segment. It is a highly competitive segment, but at the same time, it is a — it is a very large segment, 50 million-odd cases strong, right? So from that perspective, given our distribution strengths in Southern India as well as in East, we do believe that there is a decent play. So distribution will play a very important role along with that, obviously, I think in today’s times, especially on the premium side of the products, while the blend is extremely important, so is the packaging around it, right? So — and the communication that goes around it as well. So just a couple of aspects that we do keep an eye on when we take any calls on organic growth.
Vishal Gutka
Got it. Sir, last question from my side. Do we expect any more favorable regulatory tailwinds? I think recent article was there that Karnataka is thinking of increasing the number of liquor shops because I think it’s been a while since they have increased number of liquor shops. Similarly, in Kerala, I think some movement is happening. Just wanted to wanted to pick-up your opinions, anything that you have noted that any favorable tailwinds are possible or many more — because Andra we have seen, but in the — why Wi-Fi season still in which you operate maybe. Any possible tailwinds?
Amit Dahanukar
Well, I’ll not be able to react on specific states, but overall, if I had to give some broad indications, I do expect that there will be more states which will take use from maybe if I had to name states, maybe UP and Andhra Pradesh, which have been progressive in their outlook towards the trade and when UPD example is that in seven to eight years, almost the revenue of government has grown from INR15,000 crores to INR60,000 crores. A lot of new brands have come and market also has expanded. So if I’m sure that overall also there will be more states adopting progressive policies like UP and AP, which will be beneficial to the company in the longer-term.
Vishal Gutka
Got it. Got it. Got it. Thank you. Wishing you the best and sir. Just wanted to check the 14% growth in advance in Andhra Pradesh. Do we expect similar volumes to continue in right post the RTMC in this year term?
Amit Dahanukar
That was on overall basis for the company, what I mentioned for the month of January 2025.
Vishal Gutka
Okay, great, great. Thank you.
Operator
Thank you. Next question is from Rishabh Garg from Family Office. Please go-ahead.
Rishabh Gang
Yeah. Thank you for the opportunity, sir. Am I audible?
Amit Dahanukar
Oh, yes.
Rishabh Gang
Yeah. So we have had EBITDA margins improved due to reduced S&D spends, right? So I wanted to understand, right, what are the reasons like how does it — how did the reduction happen and how sustainable it is? Also, how does this S&D spend reduce impact the brand-building and product awareness since I think spends very less in such activities versus other IMFL players, right, who are more risky focus. So how do you think about this?
Abhinav Gupta
So hi, Rishabh. I think since we came to know that there will be a price correction, which will be undertake in the state of AP due to competitive intensity and in order to maintain our leadership position, we took a call to efficiently manage our S&D expenses so that our margins don’t get hit. However, as we have already maintain — always maintained that we are the key leader in the brandy industry and the voice of brandy is something which we should carry-forward as a leading player in the brandy category. We expect that these expenses will increase in future and hence, as Mr Amit Anukar has given the guidance that our EBITDA guidance will be in the range of INR15.5 to 17.5 going-forward in future?
Rishabh Gang
Also, can you give some insights on the marketing spend, right? What is going to be your incremental strategy for it? As well as how much as a percentage of revenue and maybe some tentative absolute amount that you would like to spend in the whole FY ’26? Because I was reading your FY ’24 annual report and you have plugged sales, promotion and advertising expenses in selling expenses and total was INR281 crore. So I was not able to understand how much you are spending on the marketing and advertising side. Yeah.
Ameya Deshpande
No, so Rishab, as we’ve mentioned earlier as well, our ANSP reinvestment rates are fairly low compared to our peers, right? So our ANSP reinvestment rates range anywhere between 1% to 1.5%, 1.7%, right, depending upon the quarter. We end-up doing more NSP spends during the peak seasons as such, right? So that is the range that I can provide you in terms of what is the bifurcation between the selling and distribution and ANSP.
Rishabh Gang
Okay. And this is of net revenue, gross MP
Ameya Deshpande
Net revenue.
Rishabh Gang
Okay. And
Ameya Deshpande
But having said that, going-forward, we do expect to increase this, right? So also one of the reasons why we are guiding towards a slightly lower EBITDA margin than what we’ve seen in Q3. A part of that is also to do with us reinvesting in the ANSP?
Rishabh Gang
Yeah. So can you share details about the incremental strategy for marketing, right, like on which kind of marketing spend you would like to the money, right? Some insights on that?
Ameya Deshpande
So we do a lot of PTL as well as ATL kind of activities, right? You would have seen the campaigns that we have come out with, whether it is welcome than now or a warm welcome as well as certain TV — mini TV series that we have been associated with, right? So those are the kind of ATL activities that we do undertake. The reason for undertaking these activities is like mentioned earlier to give a voice to Brandy, right? We’ve all been very accustomed to seeing a lot of these kind of campaigns or activities from whiskey players, but never from a brandy player. So that is something that in order to bring in a more aspirational quotient to the category, right, ATL is something that we end-up doing.
Also below-the-line activities is something that we have focused on pretty significantly, especially in the state of Telangana and as well as Assam with Mansion whiskey, right? So these — depending upon the product and the kind of segment and category that we deal in, we do undertake certain BTL activities as well. And frankly, when we guide towards a higher reinvestment on ANSP, we are guiding towards both on both the fronts.
Rishabh Gang
Yeah. Got it. Also, I want to understand what do you think about export potential as well as any limitation we have there on the part of Mansion House brand since we only have rights in India for the Mansion House brand. Yeah, what do you think about that?
Amit Dahanukar
So the export market is fairly robust for us. We have grown quite nicely in this — in this current year. In fact, entire volume which we had done in the previous year we have completed in nine months itself. So overall, we see good traction on the export business, particularly in African markets, Middle-East, Southeast Asia and also new brands which we are having like for example, the Monarch Legacy Edition, the first market where we launched Monarch was exports before it was even introduced in the civil market.
Rishabh Gang
What kind of limitations do we have, right, because we only have rice in India for the Mansion brand as per my understand. Can you tell about that like do we have such limitations outside, let’s say, in Africa? Like can we sell the brand there?
Amit Dahanukar
Can you repeat your question please? What were you saying?
Rishabh Gang
Yeah. So as to my understanding, we can — we only have rights in India for the Mansion House brand, right? So do we have any limitations like selling Mansion House brand in Africa or somewhere else?
Amit Dahanukar
So we are — wherever we are selling, we are registered. So I would not like to comment anything more than that.
Rishabh Gang
Absolutely fine, sir. I wanted to —
Operator
I’m really sorry to interrupt, but maybe request you to rejoin the queue as there are several participants waiting their turn.
Rishabh Gang
Absolutely. Thank you.
Operator
Thank you. The next question is from the line of Sunny from MK Ventures. Please go-ahead.
Madhusudan Kela
Yeah. Hi, Amit and. This is Aduk here and congratulations on continued good performance. My question was more strategic in nature. As we see the company will have a few hundred crore of cash over the next two to three years. What is the intent? How do you want to deploy this cash? Would you get into other categories? How will this cash be deployed? And the second question on the Andhra Pradesh, even though you have clarified, for my benefit, the sales and distribution costs have come down significantly in the last quarter. Is this sustainable going-forward?
Amit Dahanukar
Yeah,, I think first question, I think it’s a good question. I think you are right as we go-forward, since we have a virtually we have no debt companies, debt-free, whatever EBITDA we make, we are converting to cash. We don’t have any tax also not in this current year and not expected to have in this — the following year as well, ’25, ’26 also, we don’t expect tax. So large part or rather all part of the EBITDA is going to be converted into free-cash other than what we would need for incremental working capital. So there would be essentially two avenues. One would be to grow our existing business organically, which we have been doing. And I think January is an indication where the growth is around 15%. So we expect to grow our existing business, the brandy portfolio in the existing states. But all the states are showing encouraging signs.
I think even sand AP also, our growth was in double-digits and now with AB, with the route-to-market stabilizing, we expect good growth in Andhra Pradesh as well. We are expanding categories as we have mentioned in the earlier call, Mansion whiskey was launched in Assam in a northeastern territory and it is off to a stable start. We will now whiskey, we will bring it to the southern states where we already have a strong distribution presence and a strong network. So we will intend to leverage the strength of Mansion and our existing product portfolio to build whiskey brand as well. So that is as far as the organic opportunities are concerned.
And yes, we will remain open to inorganic opportunities as well in terms of our participation in the Samsara brand, we have 20% and we have a pathway towards increasing our stake also eventually. So as the brand grows, now we have a royalty arrangement in-place where we are selling Samsara in our existing states and also exporting it. So it will be both organic and inorganic. And the last question regarding the sales and distribution expenses you had the question was whether it is sustainable. So yes, the answer is that, yes, it is sustainable. I think the current levels which we ask, they would be sustainable going-forward.
Madhusudan Kela
Amit, sorry to harp on the same question again. You know, I can’t figure out in my — in my head that few hundred crores can be absorbed into our current strategy. Basically, even we have done our numbers based on — after incremental working capital also, you will be left with INR200 crore of cash. So what my point is that is there any framework to do acquisitions going-forward, the Samsara acquisition was a good acquisition. So will we adopt the same strategy of acquiring smaller companies and growing big or you are also open to make some larger acquisitions and leverage the balance sheet,
Amit Dahanukar
So Madhu, I think my response would be, whatever strategy we adopt, it would be a financial prudent strategy. What we feel would be in the best interest of the stakeholders for the long-term in terms of delivering value for them. I think we will take these calls as a company, as an organization, as management, we continuously evaluate opportunities to grow the business, expand the business both product-wise and through geographic distribution as well. So tactical acquisitions, we certainly remain open to. I hope that addressed your question. I think more in terms of distribution of the surplus cash, I think that would be a more of a decision and we don’t have a formal policy in-place, but we will — we will address that question as well.
Madhusudan Kela
Thank you, Amit. That was useful. Thank you so much.
Operator
Thank you. Next question is from Danbanka from Tiger Assets. Please go-ahead.
Unidentified Participant
Hello, sir. Thank you for the opportunity. Sir, I wanted to understand where are we currently on the acquisition or you are in talks with I think MPM period blue. So if you could just throw some light on that.
Amit Dahanukar
So I have made, I think, comment before to Mr question also in terms of being open to acquisitions, which I have clarified that technically the company evaluates opportunities on an ongoing basis. And if it fits in with the long-term vision of the company in terms of the product portfolio and the approach, we would — we are open to evaluating opportunities. Of course, managing the balance sheet prudently would be of paramount importance. So to specific opportunities, we would not be able to comment. Of course, if there is anything meaningful, we would be of course intimating the exchanges and shareholders at the appropriate time
Unidentified Participant
Sure, sir. Thank you.
Operator
Thank you. Next question is from Darshika Khemka from AV Fincorp. Please go-ahead.
Darshika Khemka
Hi, thank, thank you for the opportunity. I have a couple of questions, sir. Firstly, in the last quarter, you had mentioned about tax incidents starting from Q1. What would be the expected rate of this tax incident
Abhinav Gupta
I think we had guided for that we may have tax incident from first-quarter of next year, which would be at a normal rate of 25%. However, having said that, as you are aware that we had a search operation from IT department last year-on February 2 and subsequent to that, we have received orders for various years except AY ’24, ’25. So once we receive all the orders, we will be in a position to better comment on that. And maybe by next quarter call, we should be able to give you a precise guidance.
Darshika Khemka
So for now, we assume 25%?
Abhinav Gupta
Yeah, yeah, sure. I assume that for the time-being. Yeah
Darshika Khemka
Secondly, what is the capex guidance for FY ’26 and where will this be used and what will be the full potential from this capex that we can achieve and when will this be achieved?
Amit Dahanukar
So in terms of the maintenance — maintenance capex, I have already guided for a maintenance capex for approximately INR20 crores for the next year. There might be a potential investment which we are exploring of around INR50 crores for the expansion of our own unit in Andhra Pradesh, which is our product distillery, which would entail expanding our capacity from 6 lakh cases to 36 lakh cases per annum.
Darshika Khemka
Okay. And what will be the full revenue potential of this?
Abhinav Gupta
So it would be consolidated currently we are bottling with outside contract units, but since it is our key state and we are expecting that AP industry might grow in quite significantly, we are exploring that we might expand in our own distillery itself so that we are not much dependent on other contract units and as well as it will give us savings in terms of bottling charges which we give to other units.
Darshika Khemka
Okay. So the revenue may not be — there may not be as much incremental revenue, but there will be an advantage on the margin, if I
Abhinav Gupta
On a consolidated basis, there will be no revenue as such, but it will result in improvement in margins.
Darshika Khemka
Got it. Thirdly, we’ve received subsidy of around INR16 crores of YTD for the nine months. Do we expect any more subsidy coming in the 4th-quarter and do we — what is the guidance for subsidy for FY ’26?
Amit Dahanukar
So we do expect further subsidiary to be received in the — in the quarter-four, but to — it will be difficult at this point to quantify the amount.
Darshika Khemka
All right. Also, I had a question that we have launched the — I joined the call a little late. I’m sorry if this question was asked earlier, but we have — sorry, sort of partnered with Samsara like amid an acquisition. Why did we not follow similar strategy for as well. I mean why did we go in-house in terms of making our own whiskey or our own brand?
Ameya Deshpande
No, so-so the thing over here is that firstly Samsara was an opportunity which came pretty early-on in our entire thought process of strategic investments, right? While we have been — as Mr Dhanukar has also mentioned earlier, we keep looking at interesting opportunities and whiskey obviously is one of them as well. But having said that, it’s also a function of the price point at which we want to look at inorganic investments, right, especially on this front, see, Samsara is a craft product, okay. And these smaller acquisitions that we do look at, we are looking at more of start-ups which are in the in the crop space, right, and not in the — in the mass — mass space as such.
So — and given the fact that Manshna’s whiskey is a semi-premium whiskey, there was no point in — and we anyways had that brand, right? It’s not that it was something that we are starting from scratch. We had that brand, it was a refresh that we did and launched it in our. It was a pretty quick turnaround in terms of — in terms of a launch in this space. But just to reiterate, we keep — we do keep looking at interesting opportunities. And as and when something interesting does come up, we are not averse to looking at something in whiskey as well.
Darshika Khemka
Okay. That’s it from me. Thank you so much.
Operator
Thank you. The next question is from Aditya Singh from Multibanger Stocks. Please go-ahead.
Unidentified Participant
Good afternoon, team. Am I audible?
Ameya Deshpande
Yes, you are.
Unidentified Participant
I had a couple of questions. First question was on the — can you please quantify the amount of sale that you made in Andhra Pradesh
Amit Dahanukar
We have given rough guidance that Andhra has approximately 30% of our overall portfolio,
Unidentified Participant
30% of your overall portfolio, okay. And another — the second question is, despite the reduction in ENA prices, I do not see much change in the results. Is there any particular reason for that?
Amit Dahanukar
Sorry, despite reduction in
Unidentified Participant
ENA, extra neutral alcohol, one of the raw materials?
Amit Dahanukar
No, there hasn’t been any significant reduction in ENA for this quarter. In fact, the reduction on the COG side has been on the packing material side, but not on the raw-material side.
Unidentified Participant
Great. And for the last question, if you could provide me with the revenue guidance for FY ’26?
Amit Dahanukar
So we are looking at mid to-high teens kind of growth in terms of revenue.
Unidentified Participant
Okay. Thank you so much. Wish you all the best for your future interest.
Amit Dahanukar
Thank you.
Operator
Thank you. Before we take the next question. A reminder to participants that you may press star N1 to join the question queue. The next question is from Rishab Gang from Sacheti Family Office. Please go-ahead.
Rishabh Gang
Yeah. Thank you, sir. Sir, you know so we know that you have a agreement for Samsara, right? But how are we growing the revenues of Bartisans, like what is the synergy plan? Some granular insights on how are we benefiting is benefiting as well as how is benefiting, something on that?
Ameya Deshpande
Yeah. Yeah. So see, the entire intent with partisans of the investment in partisans was the fact that it is a — it is a superior priced a cocktail mixer, right, with strong unit economics. So obviously, as they keep growing their business on the D2C front as well as quick commerce, we are looking from our perspective, we are also looking at entering into collaborations to develop mixers for brandy. As you would know in today’s times, any mixer company that you look at or think about even going to any restaurant, right, you would have a cocktail menu.
But when you look at the cocktails which are — which are a part of that menu, you will not see too many brandy drinks. There will be certain Konac drinks, but beyond that, not too many, right? So we want to change the way people look at brandy, the consumption patterns as well around brandy, the kind of demographic as well as bring in a more aspirational and fun element to the category. And that is where the entire partisan’s situation came around and we did it, right?
Rishabh Gang
So sir for, right, what is the founder stake there if you can change?
Ameya Deshpande
So after our entire commitment that we made right now, we will own 20% of the company, right? In addition to that, we also obviously have the usership agreement that even you alluded to. But as a part of our definitive agreements, we do have a part to increase our stake on the basis of progress that the company makes.
Rishabh Gang
So I think what is the understake in of development?
Ameya Deshpande
So the founder owns 60% plus of the company.
Rishabh Gang
Excellent. Good skin in the game. Also, the capex that we are doing in Prague, can you share some details on the incremental savings and how much we are saving in terms of bottling charges, some raw numbers, right, which tells about the ROI or the payback for the PCR in case it is possible to share.
Amit Dahanukar
So as I had mentioned before, we are at a preliminary stage where we are exploring the possibility of we are not in position to say definitely whether we will be going ahead. So we are evaluating the opportunity.
Rishabh Gang
Okay. But when you evaluate like the ROI or payback, which you try to achieve, right, some — you would be having some number, right, internally it should cross this threshold
Amit Dahanukar
To five years,
Rishabh Gang
Three to five years. All right. And just one last question from my side. As the company expands, right, we have around INR1,000 CR plus revenue of market cap. What is the plan for appointing a bigger audit firm, right, preferably a big poor or a well-known Indian midsized firm who have experience in the sector.
Abhinav Gupta
I think our current auditors have a town for three years, so once that tenure is over we will definitely store appointment of some other auditor.
Rishabh Gang
So the term is going to get over in which year
Abhinav Gupta
Last year it has been extended for three years. So ’28,
Rishabh Gang
FY ’27.
Abhinav Gupta
Yeah.
Rishabh Gang
All right. Thank you so much, sir. Wonderful.
Operator
Thank you. Next question is from Marcel, who is an individual investor. Please go-ahead.
Unidentified Participant
Yeah, hello.
Amit Dahanukar
Hello, hi.
Unidentified Participant
Yeah, my question is very important. I mean, sir, in the financial result announced by the company, there is no provision for income tax. At the same time on 1 of February, the company has made a disclosure that they have received the assessment from the department till at the assessment year 2023, 2023 financial year. And in that disclosure you mentioned that the department has made some like disallount and some added back. So can you please tell us that how much amount they have disallowed and how much they have added their investment, number-one.
Number two means in the same question that as per your disclosure, the carry-forward losses and the including depreciation is INR95.15 crores, IN 95 crore as on March 31 2023. So if the unabsorbed loss is only INR95 crores, then means like which is already like if you see the profitability of the, for example, last year, last year we made a profit of INR138 crores. So there is already offset in the last year itself in the 201 — like 2023, ’24. On the top of this, this year we have made nine months profit of INR152 crores. So why the company has not made any tax provision? Because INR95 crore is like — I guess INR95 crore carry-forward losses till 31, 313 2023. Subsequent to that, in the last 21 months like like last full-year and the last — and we say nine months, in the 21 months, we have made a profit of almost a INR248 crores. So why that exposure has not been bad.
Abhinav Gupta
Hello. So with respect with respect to the search operation, we have received the orders till AY ’23, ’24 itself, but not for AY ’24, ’25. So once we receive the order, then accordingly, we will be able to take a call as to how much tax provision, if any, needs to be made.
Unidentified Participant
No, sir. No, sir, like my question is that like first please reply to my question that how much amount they have — are disallowed and added back till assessment year 2022 and ’24.
Amit Dahanukar
So I think what we have stated, we have already given the disclosure, which is already up for shareholder viewing. Beyond that, we don’t want to make any specific remarks.
Unidentified Participant
No, no, no, sir, like in that disclosure that is like in a debt way, you didn’t specify how much amount added back. You have just like mentioned only INR95 crore. On the top of this, in the last 21 months, like INR248 crore company has earned before-tax. And then on the top of this, the assessment of — assessment — the assessment of financial year 2023 — 2024, that is assessment year 2024, ’25 is immaterial because age of 31 2023, the this depreciation and the flows is only to INR295 crores. So it means in 2024, ’25 also assessment year also, the department is not going to like to make you some more allowance. It will only disallow. So it will further reduce your taxable, your care for losses. So the company would — company must-have created the provision number-one. Number two, now the company has shifted to the new tax regime like 25.1% or it is still going under the old tax-rate.
Abhinav Gupta
So for the tax purpose, we have already, as we have mentioned in the intimation to the stock exchange also, we have already decided to go in appeal against the order. So that is the first point. The second point is that since we have already not received the last year order, once we receive that order, then we will be able to specify as to what would be the tax going-forward. So we would like to restrict our response to that.
Operator
Thank you. Next question is from Himanshu Shah from Dolat Capital. Please go-ahead.
Himanshu Shah
Thank you, sir. Thanks for the opportunity. Sorry, I’ve joined little bit late. So again harping on AP. First, this price reduction has the full-quarter impact came or there will be some more impact which will flow-through in Q4 FY ’25.
Ameya Deshpande
So Himanshu, the impact of the price reduction was felt for more than two months, not the entire quarter, but more than two months of the quarter, right? And as unfortunately, you didn’t join in the beginning. But as a part of our opening commentary, we did mention that the impact was twofold, right? One was obviously reduction in price, but because of the operational issues, actually it also had an impact on our volumes as such on the primary front, right? So the impact was on both fronts. With regards to Q4, we expect Q4 NSR to be somewhat stable?
Himanshu Shah
Okay. That’s helpful. Secondly, with the opening up of the state for national players, do we foresee any kind of a risk of shift in consumers from a brandy to a because I believe AP is a slightly brandy heavy market compared to national average. So is that a risk? And to mitigate that, will it require much higher SMB spend from?
Ameya Deshpande
Yeah. So basically, Manshu, we don’t see a risk to that, right? The reason for that being that with the new RTM, we expect the industry itself to grow, right? So from that perspective, we are not seeing — and given the fact that MHV as well as our other brands, CNB have such a strong brand equity, we don’t foresee a any kind of share loss. On the contrary, as I mentioned earlier as well, in the month of December, we actually expanded our market-share to an all-time high in the state, right? So the impact was felt more in October and November. But actually in December, we clawned back to even better shares than earlier, right? So we don’t — long-story short, we don’t see too much of a risk of losing market-share or volumes because new entrants have come in.
Himanshu Shah
That’s it from my side. All the best to the team. Thank you. Thanks a lot.
Ameya Deshpande
Thanks,.
Operator
Thank you very much. We’ll take that as the last question. I would now like to hand the conference back to the management team for closing comments.
Amit Dahanukar
Thank you. Well, thank you everyone for being a part of today’s call and showing interest in our progress. I hope that we have been able to address your queries today. In case you have any pending queries, I request you to reach us at the coordinates mentioned in the presentation. Thank you very much for your time and for supporting us on our growth journey. Thank you.
Operator
Thank you very much. On behalf of Industries Limited, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines