Tilaknagar Industries Limited has informed the Exchange about Investor Presentation

February 07, 2023

To, BSE Limited Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai 400001 Scrip Code : 507205

To, National Stock Exchange of India Limited Exchange Plaza, C-1, Block-G, Bandra-Kurla Complex, Bandra (East), Mumbai-400 051. Symbol : TI

Sub: Earnings Presentation

for unaudited Financial Results

for

quarter

ended December 31, 2022

Dear Sir/Madam,

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “Listing Regulations”), please find attached herewith the Earnings Presentation for the unaudited Financial Results for quarter ended December 31, 2022.

The same is also available on our website www.tilind.com.

We request you to take the above information on record.

Thanking you,

Yours faithfully,

For Tilaknagar Industries Ltd.

Dipti Todkar Company Secretary

Encl: as above

Tilaknagar Industries Ltd. (BSE: 507205 | NSE: TI) 2/7/2023

Earnings Presentation Q3 (Oct to Dec 2022) & 9M FY23

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

1

Q3 & 9M FY23 PERFORMANCE

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

2

Q3 & 9M FY23 – at a glance

Q3 FY23

Q3 FY22

Y-o-Y growth

Q2 FY23

Q-o-Q growth

9M FY23

9M FY22

Business performance (in lacs):

Brandy volumes

Others

Total volumes

NSR (Rs. per case)

Financial performance (Rs. Crs):

Revenue from operations (Net)

Gross profit

Gross margin (%)

EBITDA

EBITDA margin (%)

EBIT

PAT (excl. exceptional items)

24.3

1.7

26.0

1,222

302.87

149.99

49.5%

40.56

13.4%

32.41

24.55

17.7

1.0

18.7

1,140

205.90

109.17

53.0%

32.42

15.7%

24.20

10.27

37.6%

70.1%

39.4%

7.2%

47.1%

37.4%

-350 bps

25.1%

-235 bps

33.9%

139.2%

22.7

1.6

24.3

1,179

274.50

134.82

49.1%

31.43

11.4%

23.21

13.88

6.9%

9.0%

7.1%

3.7%

10.3%

11.3%

41 bps

29.1%

194 bps

39.6%

76.8%

63.5

4.5

68.0

1,190

806.91

388.29

48.1%

93.71

11.6%

69.29

39.47

45.0

2.8

47.8

1,127

542.31

283.35

52.2%

86.33

15.9%

61.67

21.94

Y-o-Y growth

41.2%

58.8%

42.3%

5.6%

48.8%

37.0%

-413 bps

8.5%

-431 bps

12.3%

79.9%

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

3

Debt reduction journey…

…working towards near net debt-free position by FY24

Debt reduction (Rs. Crs)(a)(b)

Debt as of 31-Dec-22(a)(b)(c)

1,199

High-cost trade deposits (interest rate of 18-20% p.a.) of Rs. 77 crs repaid in 9M FY23

543

449

380

492

349

323

361

37

35

EARC Term Loan

Trade Deposits

251

Vendor Financing

299

269

186

▪ EARC debt is at 9% p.a.

▪ EARC balance debt of Rs. 130 crs will be waived

off on satisfactory repayment

Mar-19 Mar-21 Mar-22

Jun-22 Sep-22 Dec-22 Mar-21 Mar-22

Jun-22 Sep-22 Dec-22

Gross debt

Net debt

(a) Debt adjusted for EARC balance debt of Rs. 130 crs which would be waived off in FY24 on following the repayment schedule (b) Debt includes interest bearing trade deposits which is a part of Other Financial Liabilities

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

4

Volumes at significantly higher levels compared to pre- Covid times

Volume (lacs cases)

30

25

20

15

10

5

0

18.9

18.1

18.5

17.6

17.2

16.5

18.1

18.7

19.5

17.7

13.5

14.7

14.9

16.3

13.8

11.1

6.0

26.0

24.3

▪ 39% volume growth on YoY basis ▪ 48% volume

growth vs. Q3 FY20 (pre- Covid)

FY19

FY20

FY21

FY22

FY23

Q1 Q2 Q3 Q4

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

5

Operational highlights

Net Revenue (Rs. Crs)

168

192

135

201

206

132

56

Highest ever quarterly net revenues

241

230

275

303

807

542

356

Q1 FY21

Q2 FY21

Q3 FY21

Q4 FY21

Q1 FY22

Q2 FY22

Q3 FY22

Q4 FY22

Q1 FY23

Q2 FY23

Q3 FY23

9M FY21

9M FY22

9M FY23

EBITDA (Rs. Crs)

31

32

26

22

41

31

86

94

44

19

22

23

10

2

Q1 FY21

Q2 FY21

Q3 FY21

Q4 FY21

Q1 FY22

Q2 FY22

Q3 FY22

Q4 FY22

Q1 FY23

Q2 FY23

Q3 FY23

9M FY21

9M FY22

9M FY23

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

6

Management commentary From the desk of Mr. Amit Dahanukar, Chairman & Managing Director

❑ We are very proud to have delivered our highest ever quarterly net revenues at Rs. 303 crs ❑ December 2022 has been our best month in terms of volumes in a decade, touching almost 11 lacs cases, led by MHB at 8.7 lacs cases, the

highest monthly sales ever

❑ Despite the 2 price increases in glass costs faced by the industry, we were able to expand our EBITDA to above Rs. 40 crs at a healthy EBITDA

margin of 13.4% vs. 11.4% in Q2 FY23 ‒ This margin expansion was predominantly on account of operating leverage as well as favourable regional and brand mix ‒ We expect the inflationary headwinds to abate in the medium term, but estimate that these pressures will persist in the immediate short term ‒ We have seen strong growth in Mansion House Flandy, our Flavoured Brandy range; Flandy is currently available only in Telangana and

Puducherry and will be launched in other regions soon

❑ Our existing EBITDA expansion has been purely on the back of our mitigation strategies against inflation; these include focus on profitable brands,

favorable product & regional mix, cost optimization efforts and improved productivity ‒ We have yet to see any meaningful price increase in any of the states we are present in, but are very hopeful that we will get industry-wide

price increases in our key states

❑ Our aim to open up the brandy category to a young, experimental and aspirational audience continues and we will be looking at launching more

premium and aspirational products over the next few quarters

❑ Our debt reduction strategy is also on-track; we have reduced our debt by Rs. 126 crs in the 9 months of this financial year ❑ In the 2nd half of December 2022, we also completed the Rs. 100 crs. preferential issue to Think Investments

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

7

Extract of Income Statement

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

8

(Rs. Crs)Q3 FY23Q3 FY22Y-o-Y growth %Q2 FY23Q-o-Q growth %9M FY239M FY22Y-o-Y growth %Revenue from operations (Gross)675.46501.6734.6%596.0513.3%1,752.031,271.1537.8%Less: Excise Duty372.59295.7726.0%321.5515.9%945.12728.8429.7%Revenue from Operations (Net)302.87205.9047.1%274.5010.3%806.91542.3148.8%Other income1.171.124.4%0.5998.7%2.422.64-8.2%Total Revenue (I)304.03207.0146.9%275.0910.5%809.34544.9548.5%EXPENSES:(a) Cost of materials consumed174.6999.2376.0%147.5118.4%443.63257.3972.4%(b) Purchases of stock-in-trade0.000.00NM0.00NM0.000.00NM(c) Changes in inventories of finished goods, work-in-progress and stock-in-trade-21.81-2.51NM-7.83NM-25.001.57NM(d) Employee benefits expense10.726.9454.6%8.9819.4%28.1920.3638.5%(e) Other expenses98.7169.8141.4%94.414.6%266.39176.6650.8%Total Expenses (II)262.30173.4751.2%243.077.9%713.21455.9856.4%Profit before interest, tax, depreciation and amortisation (I - II)41.7333.5424.4%32.0230.3%96.1388.978.0%Finance costs9.0215.53-41.9%9.91-9.0%32.2446.37-30.5%Depreciation and amortisation expense8.168.22-0.8%8.22-0.8%24.4224.66-1.0%Profit before tax24.559.79150.9%13.8876.8%39.4717.94120.0%Exceptional item51.330.00NM0.00NM51.330.00NMProfit before tax75.889.79675.3%13.88446.5%90.8017.94406.0%Tax expenses :(a) Current tax0.000.00NM0.00NM0.000.00NM(b) Tax for earlier periods0.00-0.48NM0.00NM0.00-4.00NM(c) Deferred tax0.000.00NM0.00NM0.000.00NMTotal tax expense0.00-0.48NM0.00NM0.00-4.00NMProfit for the period75.8810.27639.2%13.88446.5%90.8021.94313.9%COMPANY & INDUSTRY OVERVIEW

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

9

About the Company

Largest premium brandy manufacturer in India with presence across all segments of IMFL

20

Manufacturing units across 12 states Owned: 4 units Contract manufacturing: 16 units

15+

Brands across products

94%

Share of Brandy as % of total volumes

6.73 mn

Volumes (in cases) sold

86%

Share of sales to South India as % of total volumes

* All data is for FY22; manufacturing units is as on date

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

10

Presence across IMFL categories

Focus on semi-premium and above segments

Super-Premium Rs. 1,000 & Above

Premium Rs. 700-1,000

Deluxe / Semi-Premium Rs. 500-700

(Note: All MRP for 750ml)

Mansion House Reserve Brandy

Courrier Napoleon Brandy Green

Mansion House Flavoured Brandy

Mansion House Brandy

Mansion House Gold Whisky

Courrier Napoleon Brandy Red

Madiraa XXX Rum

Blue Lagoon Gin Orange

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

11

We sell millions of cases across India

MANSION HOUSE

❑ Mansion House is a millionaire brand

(more than 5.5 mn cases sold in FY22 as well as in 9M FY23)

❑ As per IWSR Drinks Market Analysis, Mansion House is the

highest selling brandy in India

❑ Manufactured across all units

❑ A brand with a high brand loyalty driving repeat purchases

COURRIER NAPOLEON

❑ Fast approaching millionaire brand status

(0.8 mn cases sold in FY22 as well as in 9M FY23)

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

12

Our strategic focus…

…the way forward

Volume growth

Market share growth(b)

Efficient levels of capacity utilisation

▪ FY22 growth in volumes for MHB and

CNB stands at 24% each ▪ 6 yrs CAGR of 9.1% for MHB ▪ Equal focus on high-growth, nascent

regions

▪ Continued focus on brandy ▪ Market share (as % of brandy) growth

from 12.4% to 16.8%

▪ Market share (as % of IMFL) growth from

2.4% to 3.4%

▪ Pernod Ricard agreements enables efficient capacity utilisation levels ▪ Incremental region-specific growth

enabled through bottling arrangements

Debt repayment and cash flow generation

Resolution of auditor qualifications

▪ Focus on repayment of high-cost debt ▪ Target to become near net debt free by

▪ Focus on taking proactive measures to

resolve all auditor qualifications

FY24

(a) The above volume data is for Mansion House Brandy in the states of Telangana, Andhra Pradesh, Karnataka, Kerala, Puducherry and Goa i.e. states which contribute 88% of our total volumes (b) Market share growth comparison between FY17 and FY22 in the states of Telangana, Andhra Pradesh, Karnataka, Kerala, Puducherry and Goa

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

13

MHB and MHB Brandy segment growing faster…

…than overall Brandy, Whiskey and IMFL

MHB vs. Industry Growth (a)

MHB market share as % of brandy (a)

MHB market share as % of IMFL (a)

Market share growth of 36% over 6 years

Market share growth of 41% over 6 years

Category

MHB

Brandy Segment

Whiskey Segment

IMFL

CAGR

9.1%

2.6%

2.1%

1.9%

MHB: Mansion House Brandy; 6 year CAGR from FY17 to FY22 (a) The above data is for the states of Telangana, AP, Karnataka, Kerala, Puducherry and Goa i.e. states which contribute 88% of our total volumes

12.4%

FY17

16.4%

FY21

16.8%

FY22

2.4%

FY17

3.0%

FY21

3.4%

FY22

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

14

Recent Product Developments

Launch of Mansion House Flavoured Brandy

Launch of Mansion House Reserve Brandy

▪ India’s First Premium Flavoured Brandy ▪ An inclusive drink for all; across age- groups, genders, for all occasions

▪ Available in three flavours

‒ Peach ‒ Orange ‒ Cherry

▪ Launched in Puducherry in Jun-22 and in Telangana in Sep-22; other regions to follow

▪ Super-premium variant of our flagship

brand, Mansion House Brandy

▪ Blend made from special kind of ‘Ugni

Blanc’ grapes from the Sahyadris

▪ Initially launched in Tamil Nadu in Sep-22; India’s largest brandy consuming state; other states to follow

▪ This segment in Tamil Nadu is 19 lacs

cases strong in FY22

Removal of Monocartons

✓ ✓

Focus on sustainability

Cost saving measure

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

15

FY22 FINANCIALS

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

16

Improving business fundamentals

Premiumisation strategy to enhance margins and cash flows

Total Volumes Sold (mn cases)

Brandy Sales (mn cases)

84%

89%

91%

92%

94%

5.92

FY18

6.64

FY19

6.44

FY20

5.45

FY21

6.73

FY22

4.98

FY18

5.92

FY19

5.86

FY20

5.03

FY21

6.33

FY22

Share of Brandy to total volumes sold

NSR per case (Rs.)

Robust sales in South India (mn cases)

83%

87%

86%

86%

86%

904

FY18

985

FY19

1,005

FY20

1,014

FY21

1,136

FY22

4.91

FY18

5.80

FY19

5.51

FY20

4.70

FY21

5.82

FY22

Share of South India sales to total volumes sold

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

17

Focus on margins and cashflows

Most of write-offs impacting EBITDA have been undertaken

Net Revenues (Rs. Crs)

Gross Profit (Rs. Crs) and Gross Margin (%)

578

FY18

661

FY19

653

FY20

EBITDA (Rs. Crs) and EBITDA Margin (%)

8%

56

3 0%

FY18

FY19

-52

-8%

FY20

549

FY21

10%

783

FY22

14%

54

112

51%

52%

293

FY18

342

FY19

46%

301

FY20

49%

51%

271

FY21

401

FY22

Finance Cost (Rs. Crs) and as % of Net Revenues

26%

28%

20%

129

FY20

13%

71

FY21

8%

62

FY22

FY21

FY22

152

FY18

184

FY19

(a) EBITDA for FY20 is not comparable due to write-offs impacting EBITDA

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

18

Disclaimer

This presentation may include statements which may constitute forward-looking statements including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Tilaknagar Industries’ future business developments and economic performance. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements, could thus differ materially from those projected in any such forward-looking statements.

The information and opinions contained in this presentation are current. The Company undertakes no obligation to update or revise any information or the opinions expressed in this presentation as a result of new information, future events or otherwise. Any opinions or information expressed in this presentation are subject to change without notice.

Tilaknagar Industries | Q3 (Oct to Dec 2022) & 9M FY23

19

For further information, please contact: Ameya Deshpande President – Strategy & Corporate Development Email: adeshpande@tilind.com

THANK YOU