Allied Blenders and Distillers Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

Allied Blenders reported strong profitability growth in Q3 and 9M FY26, driven by premiumization and margin expansion, despite subdued volume growth in the mass premium segment due to regional market disruptions. The company is progressing with strategic backward integration capex and expanding its premium portfolio and international presence, leading to a reduction in net debt.

Highlights

  • Consolidated income from operations for Q3 FY26 grew 2.8% YoY to ₹1,004 crore.

  • EBITDA for Q3 FY26 increased 14.1% YoY to ₹137 crore, with EBITDA margin improving to 13.6%.

  • PAT for Q3 FY26 grew 10.9% YoY to ₹64 crore.

  • For 9M FY26, consolidated income grew 12.4% YoY to ₹2,929 crore, EBITDA grew 28.1% YoY to ₹386 crore, and PAT grew 57% YoY to ₹182 crore.

  • P&A segment volume grew 16.9% YoY in Q3 FY26, with its salience improving to 48.5% from 42% in Q3 FY25.

  • Net debt reduced to ₹785 crore as of December 31, 2025, from ₹893 crore on September 30, 2025, despite ongoing capex.

  • ICONIQ White delivered 7.7 million cases in 9M FY26 and is on track to touch 10 million cases for FY26.

Concerns

  • Overall volume growth in Q3 FY26 was subdued at 1.3% YoY (9 million cases).

  • Mass premium whisky segment experienced softness and degrowth of 7.4% in Q3 FY26 due to Telangana stocking norms and Maharashtra policy changes.

  • Sterling Reserve B7 (SRB7) is currently experiencing a bit of degrowth.

Key financials

2 periods

Headline

  • Consolidated Income from Operations
    ₹1,004 Cr
    YoY +2.8%
  • EBITDA
    ₹137 Cr
    YoY +14.1%
  • EBITDA Margin
    13.6%
  • PAT
    ₹64 Cr
    YoY +10.9%
  • Volume
    9 million cases
    YoY +1.3%
  • Realization per case
    0.007 decimal fraction

9M

  • Consolidated Income from Operations
    ₹2,929 Cr
    YoY +12.4%
  • EBITDA
    ₹386 Cr
    YoY +28.1%
  • EBITDA Margin
    13.2%
  • PAT
    ₹182 Cr
    YoY +57%

What they filed

Q1 FY27: revenue up 5.5%, net profit up 11.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue868 974 921 919 984 +13%985 +1%993 +8%970 +6%
EBITDA104 117 136 115 132 +27%147 +26%181 +33%134 +17%
Net profit48 58 81 61 72 +50%78 +34%57 −30%68 +11%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • P&A Segment
    16.9% Volume Growth48.5% Salience
  • ICONIQ White
    7.7 million cases 9M Volume

Capital allocation

high confidence
  • Capex ₹700 Cr
    • PET bottling manufacturing facility (Phase 1) ₹525 Cr
    • Upgradation and automated bottling facility in Uttar Pradesh (Phase 2) ₹110 Cr
    • Expansion of bottling capacity at Aurangabad facility (Minakshi subsidiary, Phase 2) ₹54 Cr
    • Malt distillery in Telangana
    • ENA distillery in Maharashtra
    Phase 1, outlined in previous quarters, we had announced ₹525 crore of investment program, including a PET bottling manufacturing facility, which is fully commissioned and is running to capacity and adding to the margin. Our 2 other projects of Malt distillery in Telangana and ENA distillery in Maharashtra are on track. These include an investment of approximately ₹110 crore in Uttar Pradesh, which is a large market for us. The investment includes around ₹40 crore towards upgradation and commissioning of a fully automated bottling facility... In addition, the company has approved a further investment of approximately ₹54 crore in our subsidiary, Minakshi, which is in Maharashtra, towards expansion of bottling capacity at our Aurangabad facility. So, the capex that we had announced till Q3 FY '27 is about ₹525 crore. The 2 new capex program that we have announced gets us to about another ₹150 crore of capex. So that is about ₹700 crore of capex that we have announced so far.
  • Debt Net ₹785 Cr
    Our net debt position stood at ₹785 crore as on 31st December '25 compared to ₹893 crore as on 30th September '25.
  • Liquidity Liquidity disclosed
    During Q3 FY '26, we generated operating cash flow of ₹173 crore.

Guidance & targets

Growth

  • Overall top line growth Growth · Q4 FY26 · High confidence Strong double-digit growth
    Overall, we expect strong top line growth in Q4, underpinned by our focus on consumer-centric growth.

    — Alok Gupta

International Presence

  • Number of countries International Presence · By Q4 FY26 · High confidence 35 countries
    By Q4 FY '26, we are targeting to expand our international presence to 35 countries.

    — Alok Gupta

ABDM Portfolio

  • Annual Run Rate (ARR) ABDM Portfolio · Next financial year (FY27) · High confidence Double
    So, we are looking at doubling our ARR in the next financial year.

    — Alok Gupta

New Product Launches

  • New brands in P&A non-whisky segment New Product Launches · FY27 · High confidence 1 new launch, 1 existing launch
    Secondly, we are looking at 1 new launch, one already existing launch in the P&A non-whisky segment, which is really the Prestige Vodka and the Prestige Brandy.

    — Alok Gupta

Gross Margin

  • Enhancement Gross Margin · By FY28 · High confidence 300 basis points
    Together, these strategic initiatives are expected to enhance our gross margin by 300 basis points by FY28.

    — Alok Gupta

EBITDA Margin

  • Target EBITDA Margin · By FY28 · High confidence At least 18%
    So, we are expecting that by FY '28, we should be at least at an 18% margin guidance.

    — Alok Gupta

ENA Capacity

  • Indigenous production ENA Capacity · By FY27 · High confidence 120 million liters
    So, by FY '27, we should be about 120 million, and that is why we need to invest in more plant of about 60 million to 70 million liters to get us to about 200, so we are targeting 200 million liters, of which we are currently at 70 million. We'll be at about 120 million by FY '27 and balance by end of FY '28.

    — Alok Gupta

  • Indigenous production ENA Capacity · By FY28 · High confidence 200 million liters

    — Alok Gupta

Mass Premium Segment

  • Volume growth Mass Premium Segment · Ongoing · High confidence Low single-digit
    So, I think in the mass premium segment, we should look at a low single-digit growth.

    — Alok Gupta

Overall Growth

  • Value growth Overall Growth · Ongoing · High confidence Mid-double-digit
    P&A will continue to grow at double digit and that should get us to a near double-digit growth with a mid-double-digit growth in terms of value.

    — Alok Gupta

Distribution Reach

  • Overall reach Distribution Reach · Next year · High confidence 65-70%
    I think the way to look at is we should see about 5% to 7% increase in distribution quarter-on-quarter. So, we should exit next year, say, at about 65%, 70% distribution reach.

    — Alok Gupta

Luxury ABD Maestro Portfolio

  • Annual Run Rate (ARR) Luxury ABD Maestro Portfolio · Next 2 years · High confidence ₹160-200 crore
    So, our exit run rate in the luxury ABD Maestro portfolio is around ₹40 crore, and we would be doubling for the next 2 years to reach around ₹160 crore, ₹200 crore, right, sir?

    — Alok Gupta

Market context

  • Volume growth P&A Segment · Ongoing · High confidence Double-digit
    P&A will continue to grow at double digit and that should get us to a near double-digit growth with a mid-double-digit growth in terms of value.

    — Alok Gupta

What to watch in Q4 FY26

Q4 FY26 Overall Top Line Growth

Next quarter (Q4 FY26 results)
Current Q3 FY26 consolidated income growth 2.8%
Target Double-digit growth

Why it matters

To confirm recovery from Q3 headwinds and validate management's confidence in market normalization.

Overall, we expect strong top line growth in Q4, underpinned by our focus on consumer-centric growth.

Risks & concerns

  • Softness in mass premium whisky segment

    medium

    Due to Telangana stocking norms and Maharashtra policy-driven price changes, leading to subdued demand and degrowth of 7.4% in Q3 FY26.

    Management acknowledged

  • State-level regulatory changes and emergence of local brands

    medium

    Affect consumer affordability and buying behavior, requiring careful monitoring, especially in markets like Maharashtra.

    Management acknowledged

  • Competition in premium segments

    medium

    New ownership of Imperial Blue could intensify competition, requiring proactive strengthening of market programs for brands like ICONIQ White.

    Management acknowledged

  • Degrowth in Sterling Reserve B7 (SRB7)

    low

    The brand is currently experiencing degrowth, though new blend programs and a new pack launch are planned for Q1 FY27 to bring back growth.

    Management acknowledged

Q&A highlights

8 direct
Telangana market impact on Q3 volumes and Q4 outlook Direct
As far as Telangana is concerned, it's been an interesting Q3. Therefore, in Q3, what really happened was that the P&A segment actually grew by 17%. ABD portfolio also grew at 17.5%, so marginally ahead of the market. It was a mass premium segment that de-grew at about 7.4%, and we also de-grew about 7%.

Clarifies the specific impact of regional market disruptions on different segments and provides an outlook for recovery.

Asked by Nitin

Strategic rationale and benefits of Minakshi Agro capex and MML participation Direct
So, the immediate efficiency that we see coming on back of having bottling at the same premises where ENA distillation is happening is that we will move ENA through pipe. So, it's extremely value accretive in cutting down the transportation cost, one and secondly, cutting down the working capital because currently, we are stocking ENA at 4 different locations.

Explains the cost savings, working capital benefits, and strategic importance of the Minakshi capex, including its relevance for potential MML participation.

Asked by Nitin

FY27 growth drivers for P&A and mass premium segments Direct
As far as FY '27 is concerned, there are 2 or 3 things that we are planning. One I've already covered, which is the ABDM accelerated growth. So, we are looking at doubling our ARR in the next financial year. Secondly, we are looking at 1 new launch, one already existing launch in the P&A non-whisky segment, which is really the Prestige Vodka and the Prestige Brandy.

Outlines specific initiatives and new product launches planned for FY27 to drive growth, particularly in the premium segments.

Asked by Mehul Desai

Path to 18% EBITDA margin guidance by FY28 and capex impact Direct
So, the FY '28 margin guidance, we had revised last quarter. We had taken the margin guidance to 18%, largely on back of the fact that we are seeing a faster gross margin progress on our current portfolio. The capex program will add 300 basis points, of which right now in Q3, we have captured just about 0.7%.

Provides a clear breakdown of how the company expects to achieve its 18% EBITDA margin target, linking it to both portfolio performance and capex benefits.

Asked by Mehul Desai

ICONIQ White's growth trajectory amidst competition from Imperial Blue Direct
I think we are and we were and we are mentally prepared that with the new owner having acquired Imperial Blue, they would do whatever it takes. So, we have proactively strengthened our sort of program in the market... I'm also happy to share with you is that ICONIQ is now sort of running at 1 million case a month, which gets us to a 12 million case ARR any which way.

Addresses competitive dynamics in the premium segment and highlights ICONIQ White's strong current performance and strategic measures to sustain growth.

Asked by Sanjay Manyal

ENA capacity expansion plans and indigenous sourcing targets Direct
So, by FY '27, we should be about 120 million, and that is why we need to invest in more plant of about 60 million to 70 million liters to get us to about 200, so we are targeting 200 million liters, of which we are currently at 70 million. We'll be at about 120 million by FY '27 and balance by end of FY '28.

Provides specific, quantifiable targets for ENA production capacity, directly linked to the company's backward integration strategy and future growth.

Asked by Sanjay Manyal

Distribution strategy, leveraging technology and data Direct
I think I'll broadly divide this into 2 parts. The first is our portfolio with ABD, which is operating at a price point of, let's say, ₹ 1,500, where the focus continues to be on off-premise. Our distribution width is about 93%... So, there is a bit of a science that is at play when it comes to off-premise because we're dealing with a very large universe. And combined with a tech intervention and automation, we are now using data to our advantage...

Details the company's sophisticated and data-driven approach to distribution, highlighting its focus on efficiency and market penetration.

Asked by Karan Kamdar

UP policy environment and its impact on investments and competitive advantage Direct
I think the framework of UP has been fairly progressive. We have seen a policy that drives premiumization, therefore, healthier margins for the industry. We also saw last year that the incidence of excise duty payment was moved from the manufacturer to the wholesaler that made the entire industry more working capital efficient because the duty funding moved to the wholesaler.

Explains how the favorable regulatory environment in UP supports the company's investment plans and provides a competitive edge through improved working capital efficiency and premiumization.

Asked by Avnish Tiwari

3 min read 8 chapters

Detailed narrative

Q3 & 9M FY26 Financial Performance Overview

Allied Blenders reported a consolidated income from operations of ₹1,004 crore in Q3 FY26, marking a 2.8% increase year-on-year. EBITDA for the quarter grew 14.1% to ₹137 crore, with the EBITDA margin improving to 13.6%. PAT for Q3 FY26 increased by 10.9% to ₹64 crore. For the nine-month period, consolidated income reached ₹2,929 crore (up 12.4% YoY), EBITDA was ₹386 crore (up 28.1% YoY), and PAT surged 57% to ₹182 crore, reflecting strong fundamentals and margin improvement.

Premiumization Strategy and Portfolio Growth

The company's premiumization strategy continues to yield results, with the P&A segment's volume growing 16.9% year-on-year in Q3 FY26. This growth significantly increased the P&A segment's salience to 48.5% in Q3 FY26, up from 42% in Q3 FY25. ICONIQ White remains a key growth driver, having delivered 7.7 million cases in 9M FY26, and is projected to reach 10 million cases for the full FY26, currently running at a 12 million case Annual Run Rate (ARR).

Strategic Backward Integration and Capex Plans

Allied Blenders is executing a disciplined capex strategy, with a total announced investment of ₹700 crore. This includes ₹110 crore for an automated bottling facility in Uttar Pradesh, expected to be operational by Q3 FY27, and ₹54 crore for expanding bottling capacity at its Minakshi facility in Maharashtra, slated for Q4 FY27. These initiatives, along with existing projects, are anticipated to enhance gross margins by 300 basis points and contribute to an 18% EBITDA margin by FY28.

Market Dynamics and Regional Headwinds

The mass premium whisky segment experienced softness in Q3 FY26, with a 7.4% degrowth, primarily due to temporary moderation in trade inventory levels in Telangana following retail license auctions and policy-driven price changes in Maharashtra affecting consumer behavior. Management expects normalization in Telangana by Q4 FY26 and has factored a stable, albeit lower, market size for Maharashtra into its Q4 guidance, targeting overall double-digit growth.

International Expansion and CSD Market Entry

The company's international expansion strategy is delivering strong results, with its footprint growing from 14 to 31 countries in 21 months, targeting 35 countries by Q4 FY26. Allied Blenders also secured approval for four brands (Jolly Roger rum, Sterling Reserve B7, Kyron, and ICONIQ) within the CSD market, which is a strategically important and profitable sales channel, opening new growth avenues for these brands.

New Brand Development and Portfolio Diversification

ABD Maestro continues to build a differentiated brand portfolio, launching three new brands: Rangeela Vodka, YELLO Designer Whisky, and AODH (Irish Whiskey). The company is also planning to launch a P&A vodka brand in Q1 FY27 and is actively pursuing entry into the mass premium brandy segment in Andhra Pradesh, aiming to capture a share of the 12 million case market where it previously had no presence.

Debt Reduction and Operating Cash Flow

Allied Blenders demonstrated strong operating cash flow generation, reporting ₹173 crore in Q3 FY26. This robust cash flow contributed to a significant reduction in net debt, which stood at ₹785 crore as of December 31, 2025, down from ₹893 crore on September 30, 2025. This reduction occurred despite ongoing investments in capex and the luxury portfolio, showcasing prudent financial management.

Enhanced Distribution and Technology Integration

The company is strengthening its distribution capabilities by leveraging technology and data. For off-premise sales, it uses a tech platform to monitor incentives and communicate directly with counter salesmen, achieving a distribution width of 93%. For the ABDM portfolio, the focus is on key accounts and travel retail, supported by a digitized training program for the sales team to enhance brand knowledge and consumer engagement.

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