Globus Spirits Q1 FY27 earnings call

Globus Spirits reported a strong Q1 FY27, with revenue from operations growing 13% year-on-year to INR 7,888 million (₹788.8 crores). EBITDA increased by 33% to INR 795 million (₹79.5 crores), leading to an improved EBITDA margin of 10%. Profit After Tax (PAT) saw a significant 49% year-on-year growth, reaching INR 276 million (₹27.6 crores), with PAT margins at 4%. This performance reflects structural improvements across the business, including better capacity utilization and improved manufacturing profitability.

The manufacturing business delivered a robust performance, with segment revenue growing 11% year-on-year to INR 4,720 million (₹472 crores). Sales volume stood at 56.11 million litres, achieving an impressive capacity utilization of 89%, which is above the company's guidance of 85%. The EBITDA per litre for this segment was INR 6.5, contributing to overall profitability and supply security. The company has no plans for significant ENA/ethanol capacity expansion until FY29, focusing on maintenance capex of INR 50-60 crores annually.

The Prestige & Above (P&A) segment demonstrated strong growth, with revenue increasing 35% year-on-year and 38% sequentially to INR 550 million (₹55 crores). Volumes in this segment grew 45% year-on-year and 45% sequentially, reaching 0.42 million cases. This growth was broad-based across states and brands like Terai, Snoski, and Brothers & Co., indicating successful market expansion and execution. Despite the strong growth, the P&A segment recorded a negative EBITDA of INR 13 million (₹1.3 crores) as investments continue.

The Regular & Others (R&O) segment also showed steady and healthy growth, with revenue up 10% year-on-year to INR 2,564 million (₹256.4 crores) and volumes growing 13% to 4.48 million cases. EBITDA for this segment increased by 13% to INR 440 million (₹44 crores). Notably, Uttar Pradesh R&O volumes grew 2.4 times year-on-year, crossing 0.2 million cases per month, establishing it as a key growth market. The company aims to maintain R&O EBITDA margins in the 15-17% range.

Globus Spirits maintains a strong focus on capital discipline. Net debt reduced slightly to INR 650 crores as of June 2026 from INR 660 crores in March 2026. The P&A business is self-funded through cash generation from the manufacturing and R&O segments, with a goal to achieve profitable growth in new states within three years of launch. The company's current ratio stands at 1.01x and interest coverage at 3.14x, reflecting a healthy balance sheet.

The company is strategically expanding its consumer business, aiming to reach 10 core states in a couple of years. Currently, they have a presence in 11 states, with 6 being driven towards core status. Management acknowledged inflationary pressures, particularly a double-digit cost-push (10-17%) in glass prices. However, they have secured inventories for agri commodities and utilize FCI cover to mitigate risks, maintaining a manufacturing EBITDA per litre guidance of INR 5-7 for the year.