Tilaknagar Industries Limited

Amit Dahanukar

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Amit Dahanukar

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Amit Dahanukar

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Amit Dahanukar

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Amit Dahanukar

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Amit Dahanukar

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Amit Dahanukar

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Amit Dahanukar

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Amit Dahanukar

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Amit Dahanukar

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Hence, while the price reduction approval came only at the end of November, the impact of the price reduction has been seen for more than 2 months of Q3.

— Amit Dahanukar

Obviously, Q3 had an impact of October and November, but starting December, when anyway secondaries were decent, we did pretty well and Jan onwards we've seen decent movement on primaries as well.

— Amit Dahanukar

Just wanted to get your thoughts on how easy or difficult is it to make a brand and given that in FMCG industry, we have seen that a brand creation is very, very difficult.

— Vishal Gutka

We do expect further subsidy to be received in Q4, but it will be difficult at this point to quantify the amount.

— Amit Dahanukar

Ameya Deshpande: Himanshu, the impact of the price reduction was felt for more than 2 months, not the entire quarter, but more than 2 months of the quarter.

— Himanshu Shah

Secondly, with the opening up of the state for national players, do you foresee any kind of a risk of shift in consumers from a brandy to a whisky because I believe AP is a slightly brandy-heavy market compared to national average.

— Himanshu Shah

Ameya Deshpande: Basically, Himanshu, we don't see a risk to that.

— Himanshu Shah

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

Q

I am pleased to share that Q3 FY2025 has been another period of strategic progress and consistency in earnings growth for Tilaknagar Industries. The volume performance excluding Andhra Pradesh was on expected lines. Excluding Andhra, our primary volumes in Q3 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 degrowth in primary volumes, secondary volumes in Andhra Pradesh grew at 8%, indicating strong brand equity

Management

Q

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. Could you tell us for each of your key raw material in FY26, do you think that those will be soft on an overall basis, including ENA, what will be views on each of the components? Ameya Deshpande: Hi, Abneesh. Thanks for your question. Yes, for the moment, we are assuming that ENA would range in this region. We haven't taken any kind of reduction on ENA prices currently, but our expectation is that it shouldn't be highly inflationary going forward.

Abneesh Roy

What about glass and other raw material, packaging? Ameya Deshpande: 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. Sure. You did comment on Andhra market. Now, in Andhra market, other liquor players are seeing good revival and we also had a challenging time there, you have also rationalized the price. The price rationalization impact, will it continue in the coming quarters also? And if you could tell us what has changed, was it because you were already doing busine

Q

Just wanted to check what is the quantum of blended price correction in Andhra Pradesh you had taken and shall it impact the margins for balance one year given that recent price correction you had taken? Ameya Deshpande: The price correction in Andhra blended level on a state basis would be around Rs. 200, reduction.

Vishal Gutka

Okay. In percentage terms, what would be in that specific market? Ameya Deshpande: We don't provide statewide EDP/NSR. What I can speak is on an overall basis, right, so as you would have seen in Q1 or rather in Q2, our NSR was around Rs. 1,270, that is the impact and assuming around 30% of our total volumes are driven by Andhra, you can kind of get a sense. This should have an impact on margins for balance 12 months given the price correction flow through over the next 12 months? Although you are in an expansion mode, but that margin could moderate from here on, for your expansion, at least f

Q

Yes, thank you for the opportunity, sir. We have had EBITDA margins improved due to reduced S&D spend, right? So, I wanted to understand, right, what are the reasons like how did the reduction happen and how sustainable it is? So, the brand building and how does productiveness since I think Tilaknagar spends very less in such activities versus other IMFL players, who are more whisky-focused. So how do you think about this? this S&D spend reduce impact Hi, Rishabh. I think since we came to know that there will be a price correction which we will undertake in the state of AP due to competitive i

Rishabh Gang

And this is of net revenue or gross revenue? Ameya Deshpande: Net revenue. But having said that, going forward, we do expect to increase this. So, also one of the reasons why we are guiding towards a slightly lower EBITDA margin than what we've seen in Q3, part of that is also to do with us reinvesting in A&SP. Can you share details about the incremental strategy for marketing, right, like which kind of marketing spend you would like to deploy the money, right, some insights on that? Ameya Deshpande: We do a lot of BTL as well as ATL kind of activities. You would have seen the campaigns that w

Q

Hi, Amit and Ameya, this is Madhu Kela here and congratulations on continued good performance. My question was more strategic in nature. As we see the

Amit Dahanukar

company will have a few hundred crore rupees of cash over the next 2-3 years, what is the intent. How do you want to deploy the 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, these sales and distribution costs have come down significantly in the last quarter. Is this sustainable going forward? Yeah, Madhu, first question, I think it's a good question. I think you're right, as we go forward, since virtually we have no debt, company is debt-free, whatever EBITDA we make, we

Q

I think I have made comment before to Mr. Kela's question also in terms of being open to acquisitions which, I have clarified that technically even though 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 are open to evaluating opportunities, of course managing the balance sheet prudently would be of paramount importance. To specific opportunities, we would not be able to comment. Of course, if there's anything meaningful, we would be of course intimating the exchanges and t

Management

Q

Hi, thank you for the opportunity. I have a couple of questions, sir. Firstly, in the last quarter you mentioned about tax incidence starting from Q1. What would be the expected rate of this tax incidence?

Abhinav Gupta

I think we had guided for that either, we may have tax incidence 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 2nd. 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 precise guidance. For now, we assume 25%? Yes, you can assume that for the time being. Secondly, what is the CA

Q

I had a couple of questions. First question was could you please quantify the amount of sales that you made in Andhra Pradesh?

Amit Dahanukar

We have given rough guidance that Andhra has approximately 30% of our overall portfolio. And 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? Ameya Deshpande: Sorry, despite reduction in? ENA, one of the raw materials. Ameya Deshpande: No, there hasn't been any significant reduction in ENA for this quarter. In fact, the reduction in the COGS side has been on the packing material side, but not on the raw material side. Okay. And the last question, if you could provide me with the revenue guidance for FY26?

Q

We know that you have a usership 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 Bartisans benefiting as well as how Tilaknagar is benefitting, something on that? Ameya Deshpande: See the entire intent with the investment in Bartisans was the fact that it is a superior priced cocktail mixer, with strong unit economics. 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

Rishabh Gang

Okay. On Samsara, right, what is the stake if you can share? Ameya Deshpande: After our entire commitment that we made right now, we will own 20% of the company. 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 path to increase our stake on the basis of progress that the company makes. What is the founder stake in Samsara? Ameya Deshpande: The founder owns 60% plus of the company. Excellent. Good skin in the game. Also, the CAPEX that we are doing in Prag, can you share some details on the incr

Q

Thanks for the opportunity. Sorry, I've joined a little bit late, so again asking on AP. First, this price reduction has the full quarter impact come or there will be some more impact which will flow through in Q4 FY25? Ameya Deshpande: Himanshu, the impact of the price reduction was felt for more than 2 months, not the entire quarter, but more than 2 months of the quarter. Unfortunately you didn't join in the beginning, but as a part of our opening commentary, we did mention that the impact was two-fold, right, one was obviously reduction in price, but because of the operational issues, actua

Himanshu Shah

Okay. That's helpful. Secondly, with the opening up of the state for national players, do you foresee any kind of a risk of shift in consumers from a brandy to a whisky 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 S&D spend from our end? Ameya Deshpande: Basically, Himanshu, we don't see a risk to that. The reason for that being that with the new RTM, we expect the industry itself to grow. So, from that perspective, and given the fact that MHB as well as our other brand CNB have such a

Q

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. Disclaimer: This is a transcription and may contain some transcription errors. The document has been edited for clarity. The Company takes no responsibility of such errors, although an effort has been made to maintain a high level of accuracy.

Management