Allied Blenders and Distillers Limited — Q4 FY26 earnings call

Call held 21 May 2026

Management summary

Allied Blenders reported a strong Q4 and full-year FY26, driven by robust premiumization, disciplined execution, and benefits from backward integration. Consolidated income grew 11.5% YoY for FY26, with EBITDA expanding 25.8% and adjusted PAT up 36.3%. The company declared a 270% dividend and outlined ambitious growth and margin expansion targets for the coming years, despite some near-term geopolitical headwinds.

Highlights

  • FY26 Consolidated Income from operations grew 11.5% YoY to ₹3,949 crores.

  • FY26 Consolidated EBITDA grew 25.8% YoY to ₹568 crores, with margin expanding 163 bps to 14.4%.

  • FY26 Adjusted PAT grew 36.3% YoY to ₹266 crores.

  • Q4 FY26 Consolidated EBITDA margin expanded to 17.9% from 16.1%, driven by premium mix, favorable input costs, and operating leverage.

  • P&A category delivered strong 20.5% YoY volume growth in Q4 FY26, contributing 57.7% of overall sales.

  • ICONIQ White crossed 10.7 million cases in FY26, becoming one of the fastest-growing millennial spirit brands globally.

  • Board recommended a dividend of 270% (₹5.4 per equity share) for FY26.

Concerns

  • Exports in Q4 FY26 were partially impacted by geopolitical developments and war-related disruption in select international markets.

  • Near-term margin contraction is expected in Q1 and early Q2 FY27 due to West Asia war and rising inflationary environment.

Key financials

2 periods

Q4 FY26

  • Consolidated Income from Operations
    ₹1,020 Cr
    YoY +9.1%
  • Consolidated EBITDA
    ₹182 Cr
    YoY +21.2%
  • Consolidated EBITDA Margin
    17.9%
  • Gross Margin
    48.2%

FY26

  • Consolidated Income from Operations
    ₹3,949 Cr
    YoY +11.5%
  • Consolidated EBITDA
    ₹568 Cr
    YoY +25.8%
  • Consolidated EBITDA Margin
    14.4%
  • Adjusted PAT
    ₹266 Cr
    YoY +36.3%

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.

Capital allocation

high confidence
  • Capex Capex disclosed internal accruals and borrowing whenever required
    • Phase 1 PET bottling manufacturing facility in Telangana
    • Malt Distillery project in Telangana
    • ENA distillery expansion project in Maharashtra
    • Phase 2 strategic backward integration expansion (bottling and ENA capabilities) in Uttar Pradesh, Maharashtra and Andhra Pradesh
    Our entire capex investment will be a combination of internal accruals and borrowing whenever required, but we do not intend breaching these covenants at all.
  • Debt 1.7× EBITDA
    Net debt-to-EBITDA stood at 1.7x as of March '26, comfortably within our stated framework of below 2x. Similarly, net debt to equity remained at 0.6x, well below our stated framework of 0.75x.
  • Dividend ₹5.4/share (final)
    the Board of Directors has recommended a dividend of 270%, which is ₹5.4 per equity share of ₹2 each for the financial year FY26 for the approval of the shareholders at the ensuing Annual General Meeting of the company.

Guidance & targets

Margin

  • EBITDA margin enhancement from Phase 1 & 2 initiatives Margin · by FY28 · High confidence ~300 bps
    Phase 1 and Phase 2 initiatives are expected to contribute approximately 300 basis points towards EBITDA margin enhancement by FY28, and an incremental margin improvement of nearly 100 basis points by FY29.

    — Alok Gupta

  • EBITDA margin enhancement from Phase 1 & 2 initiatives (incremental) Margin · by FY29 · High confidence ~100 bps

    — Alok Gupta

  • Gross Margin Margin · next 3 years · High confidence 48-50%

    From 45% today

    From a level of 45% it would be my endeavour that over the next 3 years, we take it to 48% to 50% because gross margins in the alcobev space in India are still very low, and I think there is huge potential.

    — Amar Sinha

  • EBITDA Margin Margin · next 3 years · High confidence >20%
    EBITDA margin, hopefully with a 50% gross margin, I think should cross the 20% mark easily over the next 3 years.

    — Amar Sinha

  • FY27 Overall EBITDA Margin Margin · FY27 · Medium confidence maintain FY26 levels or better
    So, the guidance that we are giving is that the FY27 overall margins, we should be hold on to the FY26, if not better it.

    — Alok Gupta

  • EBITDA Margin Margin · by FY28 · High confidence 18%

    Previously 17% → 18%

    Mehul, if you recall, we have increased our guidance. Our guidance was 17% EBITDA margin by FY28. If you would notice, we have increased by 100 basis points to 18%, and we will stay with that guidance.

    — Alok Gupta

Revenue

  • Consolidated Top Line Growth Revenue · long-term · Medium confidence mid-teens
    Overall, we expect the top line growth at a consolidated level to be in the range of mid- teens at the backdrop of higher investment in further scaling up ICONIQ White, arrest de-growth of the other 3 millennial brand and establishment of super premium to luxury portfolio of ABD Maestro. Together, these initiatives provide us confidence of delivering mid-teens top line growth in line with our stated guidelines.

    — Alok Gupta

  • ABD Maestro Revenue Revenue · FY27 · High confidence ₹100 crores
    ARR, the next year outlook, well, we are hoping to hit a century if not higher, in terms of top line.

    — Alok Gupta

Volume

  • P&A Volume Contribution Volume · next 3 years · High confidence cross 50%
    The Premium and above segment, I believe that it should cross the 50% mark as far as volume is concerned.

    — Amar Sinha

Value

  • P&A Value Contribution Value · next 3 years · High confidence 70-75%
    And as far as value is concerned, it should be between 70% to 75% mark.

    — Amar Sinha

Return on Capital

  • Return on Capital Return on Capital · next 3 years · High confidence >25%
    The return on capital, which is a prudent capital allocation that I see should be in the region of 25% over the next 3 years.

    — Amar Sinha

What to watch in Q1 FY27

Telangana Price Increase Implementation

Q2 FY27
Current Committee formed, details requested
Target Price increase comes through

Why it matters

Significant positive impact on margins, especially for ABDL given its large base in Telangana.

The second important upside will come from Telangana price increase. As you know, the committee has already been formed, and they've requested all marketers and manufacturers to provide necessary details in terms of what price increase is required. This is a very important one for the industry, but especially for us, given the fact that it's a very, very large market for us, and we've got a very, very large base. So, this will not just incrementally impact margins but significantly impact margins.

Risks & concerns

  • Geopolitical uncertainty and war-related disruption

    medium

    Partially impacted Q4 FY26 exports and expected to cause short-term margin pressure in Q1/early Q2 FY27.

    However, during the quarter 4, exports were partially impacted by geopolitical development and war-related disruption in select international markets.

    Management acknowledged

  • Rising inflationary environment

    medium

    Expected to contribute to near-term margin contraction in Q1/early Q2 FY27.

    These gains will be partially offset by a rising inflationary environment, ongoing geopolitical uncertainty impacting input cost, incremental ESOP charge, which was not applicable last year, and continued investment behind our brands through calibrated marketing and A&P spend to support long-term growth.

    Management acknowledged

Q&A highlights

6 direct
Near-term margin outlook and drivers Direct
As regards to the geopolitical-related inflationary pressure, for time being, our assumption is that this issue will resolve over the next month or so and some bit of correction and normalcy will come in the market. So, our view is that if this issue was to resolve over the next couple of months, we will see some short-term pressure. But overall, for FY27, we should be able to, by and large, deliver margins no different than FY26.

Analyst sought clarity on FY27 margins given strong FY26 and potential headwinds. Management provided a nuanced view, expecting near-term pressure but overall FY26-level margins for FY27, with potential upside if geopolitical issues resolve.

Asked by Abneesh Roy

Impact of Karnataka policy changes on Officer's Choice Partial
I think Karnataka, we have to keep in mind that the policy is yet to be implemented. Therefore, drawing any conclusion at this stage may not be prudent. Having said that, if the policy was implemented in the manner that it is currently outlined, or discussions are on, definitely an up for the P&A segment. We are seeing ICONiQ doing very well in the state of Karnataka, and therefore, it could get a hockey stick opportunity in Karnataka. We do expect moderation to happen in the lower slabs. And if that moderation takes place, we believe for a brand like Officer's Choice, it could be neutral to positive.

Analyst questioned potential negative impact on Officer's Choice from Karnataka policy. Management indicated policy is not final, but if implemented as outlined, it could be neutral to positive for Officer's Choice and a 'hockey stick' opportunity for P&A brands like ICONIQ.

Asked by Abneesh Roy

Leadership transition timeline for Amar Sinha Partial
To answer the second part of your question on transition, I think we are already at a fairly clear stage of transition and hopefully should announce it within this quarter. And I think things are progressing very well.

Analyst asked about the timeline and vision for the new MD Designate. Management indicated a transition announcement is expected within the current quarter, suggesting a smooth handover.

Asked by Abneesh Roy

Performance and future plans for OC Blue and Sterling Reserve B7 Direct
As regards OC Blue and SRB7 essentially, both these brands are now more than 10 years old. They are operating in a highly competitive segment with strong number 1 and 2 brands. I think now that we are able to provide right amount of A&P capital to these brands, combined with newer packaging, I think all we have to do is to address the issue of represent these brands to the consumer, put the right amount of A&P so the brand is on top of mind and it drives back sales. So, this is one agenda point that is going to keep us busy this year.

Analyst questioned the role of these older brands in FY27 growth. Management outlined a strategy of increased A&P and new packaging to revive sales and address their competitive segment.

Asked by Mehul

Profitability outlook for ABD Maestro portfolio Direct
I think the way we had put together the 3-year plan for ABD Maestro was that year 1, it's going to be an EBITDA negative, right, which you can see in the numbers. We will target towards CM2 neutral, which is the business being able to invest back in the brand from its own internal accruals. So, we'll try and get to as close to a CM2 neutral. And in year 3, it will become a CM3 or EBITDA neutral company.

Analyst sought clarity on the profitability trajectory of the new ABD Maestro portfolio. Management provided a clear 3-year roadmap, targeting CM2 neutral by year 2 and CM3/EBITDA neutral by year 3.

Asked by Mehul

ICONIQ White's growth cannibalizing other brands like Sterling Reserve B7 and OC Blue Direct
So, I think that is very heartening for us because India is adding about 12 million to 13 million consumers of legal drinking age, of which some of them will take informed choices. And when they will look at what is trending amongst the youngsters and the brand ICONIQ should get disproportionate share versus the other brands. So that's really the growth engine of ICONIQ. To your question that is it taking shares away from SRB7, it is taking share away from all brands operating in that segment, including SRB7. So therefore, the way we look at it is that if the segment is about 120 million cases, OC Blue, ICONiQ and Sterling B7 put together, right, we are looking at about 18 million, 20 million cases, and this is 20 million cases of 120 million cases segment. And in the earlier speech, I said that we're looking at a strategy, which is how through a combination of 3 brands and very specific perhaps geography-led initiatives, how do we continuously get higher market share from this 120 million case segment? There is bound to be some cannibalization, yes.

Analyst questioned if ICONIQ's rapid growth is at the expense of other ABDL brands. Management acknowledged some cannibalization but framed it as gaining disproportionate share in the overall 120 million case segment by leveraging a portfolio approach.

Asked by Dhiraj Mistry

Strategy for the premium category (above P&A) and new product launches Direct
So, we recognize the potential of this space, and we are also working on a premium brand, and we hope to launch it very soon. I would say, in H2, you will see a launch of a premium brand from the ABDM portfolio.

Analyst noted competitor activity in the premium segment and asked about ABDL's plans. Management confirmed active development and a planned launch of a new premium brand from the ABDM portfolio in H2.

Asked by Dhiraj Mistry

Increase in inventory days Direct
You're talking about increase in inventory? I think there are 2 big drivers there. One is that we have done some proactive buying of scotch, keeping in mind what's happening to the rupee depreciation against pound. We'll still get the duty benefit because we are storing everything under FTWZ, so we pay the duty at the time of debonding. So that's one reason. And ABD Maestro are high NSV product, and they are made in smaller batches. So, these are the 2 reasons why you would see an increase in our inventory.

Analyst inquired about the reason for increased inventory days. Management attributed it to proactive scotch buying due to rupee depreciation and the nature of ABD Maestro products (high NSV, smaller batches).

Asked by Kaustubh Pawaskar

3 min read 6 chapters

Detailed narrative

Strong FY26 Performance Driven by Premiumization and Execution

Allied Blenders reported a defining FY26, achieving record annual profit through disciplined execution and accelerated premiumization. Consolidated income from operations grew 11.5% YoY to ₹3,949 crores, with EBITDA reaching ₹568 crores, a 25.8% YoY increase. The EBITDA margin expanded by 163 basis points to 14.4%, and adjusted PAT stood at ₹266 crores, reflecting a 36.3% growth over the previous year. This performance was supported by improved gross margins, premium mix enhancement, and disciplined cost management.

Q4 FY26 Highlights and Margin Expansion

The company delivered a healthy consolidated performance in Q4 FY26, with income from operations growing 9.1% YoY to ₹1,020 crores. EBITDA increased by 21.2% to ₹182 crores, and the EBITDA margin expanded from 16.1% to 17.9%. Gross margin sharply expanded by 480 basis points YoY to 48.2%, benefiting from favorable commodity and packaging costs, along with initial backward integration benefits. The P&A category continued to lead growth, with a 20.5% YoY volume increase to 4.4 million cases, contributing 57.7% of overall sales in the quarter.

Strategic Backward Integration Progress

Allied Blenders made significant progress on its backward integration and supply chain optimization initiatives. The Phase 1 PET bottling manufacturing facility in Telangana was commissioned in Q2 FY26 and became EBITDA accretive from Q3. The Malt Distillery project in Telangana is expected to be operational in H1 FY27, and the ENA distillery expansion in Maharashtra in H1 FY28. These projects are anticipated to enhance supply chain security, improve structural cost efficiency, and contribute to margin expansion.

ABD Maestro and Premium Portfolio Expansion

ABD Maestro played a pivotal role in shaping the company's long-term premium and luxury journey, establishing a differentiated portfolio across whisky, gin, vodka, and rum. The company strengthened its portfolio with launches like 'The Collective,' a limited edition 34-year-old single malt scotch whisky, which saw over 50% of allocations secured through preorder. ICONIQ White achieved sales of 10.7 million cases in FY26, positioning it as a fast-growing millennial spirit brand globally. The company plans to launch a new premium brand from the ABDM portfolio in H2 FY27.

Financial Health and Shareholder Returns

The company's financial management strengthened its balance sheet, with operating cash flow improving to ₹362 crores in FY26. Net debt-to-EBITDA stood at 1.7x and net debt-to-equity at 0.6x as of March '26, both well within stated frameworks. The Board of Directors recommended a dividend of 270%, equivalent to ₹5.4 per equity share of ₹2 each for FY26, reflecting confidence in long-term growth. The company aims for a return on capital exceeding 25% over the next three years.

Market Expansion and Channel Focus

ABDL expanded its international footprint from 23 to 36 countries in FY26, with export revenue growing 14.1% YoY to ₹235 crores. The company secured CSD approval for key brands like ICONIQ, Sterling Reserve B7, Kyron, and Jolly Roger Rum, strengthening its presence in this profitable channel with an estimated industry size of 12 million cases annually. The company also strengthened its presence in travel retail channels across major international airports, enhancing premium brand visibility.

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