Globus Spirits Limited — Q4 FY25 earnings call

Call held 20 May 2025

Management summary

Globus Spirits reported a robust Q4 FY25 and full year FY25, driven by significant growth in its consumer business, particularly the Prestige & Above segment. The manufacturing business showed margin recovery and strategic initiatives like corn oil production. While finance costs and depreciation increased due to expansions, the company is focused on market penetration, brand expansion, and operational efficiency, with key projects like the UP multi-feed distillery progressing towards commissioning.

Highlights

  • Consumer business revenue grew by an impressive 26% year-on-year in FY25.

  • Prestige & Above segment achieved a strong 186% year-on-year revenue growth, reaching INR129 crores in FY25.

  • Manufacturing business EBITDA margins rose to 3% in Q4 FY25 from 1% in Q3, with margin per liter increasing to INR3.

  • Successfully launched 7 new brands, expanding the portfolio to 11 across whiskey, gin, vodka, and rum segments.

  • Commenced production of corn oil from maize at the West Bengal facility, providing additional revenue and raw material price buffer.

Concerns

  • Finance costs increased by INR20 crores in FY25, primarily due to changes in working capital mix and financing for the P&A segment.

  • Depreciation increased by INR26 crores in FY25 due to capitalization of expansions at West Bengal and Jharkhand.

  • Q4 FY25 saw some slowdown in the Prestige & Above segment compared to the previous quarter, attributed to excise policy transitions and inventory management.

Key financials

  1. Consumer Business Revenue Growth 26%
  2. Prestige & Above Revenue Growth 186%
  3. Prestige & Above Revenue ₹129 Cr
  4. Manufacturing EBITDA Margin 3%
  5. Manufacturing Margin per Liter ₹3
  6. Finance Costs Increase ₹20 Cr
  7. Depreciation Increase ₹26 Cr

What they filed

Q1 FY27: revenue up 12.7%, net profit up 44.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue638 602 655 700 661 +4%717 +19%632 −4%789 +13%
EBITDA30 34 39 57 59 +97%75 +121%67 +72%78 +37%
Net profit1 0 5 18 22 +2100%30 21 +320%26 +44%
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

  • Consumer Business - Regular & Others
    ₹221 Cr Q4 FY25 Revenue₹864 Cr FY25 Revenue17% FY25 Revenue Growth17% Q4 FY25 EBITDA Margin16% FY25 EBITDA Margin
  • Manufacturing Business
    61% FY25 Revenue Contribution64.36 million liters Q4 FY25 Bulk Alcohol Production Volume50 million liters Q4 FY25 Bulk Alcohol Sales Volume

Capital allocation

high confidence
  • Capex Capex disclosed
    • UP multi-feed distillery project ₹115 Cr
    • Malt plant in Rajasthan ₹29 Cr
    • West Bengal and Jharkhand expansions
    Our multi-feed distillery project in UP is progressing well with commissioning expected in Q3 FY '26. The total capex over here is expected at about INR115 crores. The UP market, as mentioned earlier, is a key growth area for the company, driven by strong demand across regular and others brands as well as Prestige & above brands. [...] Capital work in progress INR149 crores comprises of UP distillery and Malt plant in Rajasthan. Malt plant is of INR29 crores has been commissioned and capitalized since in Q1 of FY'26 and the UP capacity is expected in Q3. [...] Total capex in the year gone by was INR161 crores.
  • Debt Debt disclosed
    • New borrowing Long-term borrowing increased due to capex. ₹72 Cr
    • New borrowing Advanced excise duty in Rajasthan financed by short-term borrowings. ₹110 Cr
    Finance costs increased on a full year basis by INR20 crores. This is on account of INR17 crores increase due to change in working capital mix. About 50% of the increase is attributable to increased financing for our P&A segment. The balance is for financing vendor bill discounting. [...] Borrowing provision, long-term borrowing increased by INR72 crores due to capex. [...] This year in Rajasthan, there was an opportunity to start April strong by depositing excise duty in advance. Therefore, the company deposited INR110 crores in advanced excise duty. This was financed to short-term borrowings and thereafter has been recovering this from revenue routing collection.
  • M&A ANSA MCAL Joint venture · Entered

    Entry into the beer market in Uttar Pradesh.

    Additionally, Globus Ansa India Limited, a JV between Globus Spirits and ANSA MCAL, recently entered the beer market with the launch of Carib 500 ml strong beer in Uttar Pradesh.

Guidance & targets

Profitability

  • Manufacturing Margin per Liter Profitability · Ongoing · High confidence INR5 to INR7
    We expect this trend to continue and margins to stabilize around INR5 to INR7 per liter.

    — Shekhar Swarup

  • IMFL UP Breakeven Profitability · FY26 · High confidence Breakeven
    Coming to UP, if we continue on the trajectory of UP, we are expecting '25, '26 itself to be the breakeven year.

    — Paramjit Gill

  • IMIL EBITDA Margin Profitability · Next 1-2 years · High confidence 15% to 17% (upper end)
    No, I do for the next year or two feel that, the higher end of that range is the level that we will be at. And once I cannot forecast beyond a couple of years right now. I do think that upper end of that range is where we should be right now. I don't foresee any reason for a structural change to a 20% or a 25% kind of margin profile. 17%, 16%, 18%, I think that's a good range for us to be.

    — Shekhar Swarup

  • UP IMIL Margins (post-distillery commissioning) Profitability · Post Q3 FY26 · High confidence 16% to 17%
    We expect to commission our distillery in Uttar Pradesh in Q3, as I had mentioned in my opening remarks. And that's when UP margins will start looking similar to our Rajasthan margins. Rajasthan margins should be at the upper end of our guidance, so 17%, maybe even a little higher this year. But long term, I would say you see this entire regular and others business at about 16%, 17% margin business.

    — Shekhar Swarup

Capacity

  • Manufacturing Capacity Utilization Capacity · Through the year · High confidence 90%+
    So our internal targets are at 90-plus percent capacity utilization through the year.

    — Shekhar Swarup

Capex

  • UP Multi-feed Distillery Commissioning Capex · Q3 FY26 · High confidence Commissioned
    Our multi-feed distillery project in UP is progressing well with commissioning expected in Q3 FY '26.

    — Shekhar Swarup

Growth

  • IMFL Growth Growth · Coming year · Medium confidence Robust trajectory
    The revenue guidance, we don't give forward revenue guidance as we have outlined on a few occasions, but we are very confident that IMFL growth will continue on a very robust trajectory in the coming year as well as we are confident that our action plans are continuing to yield results.

    — Paramjit Gill

Market Expansion

  • Prestige & Above State Expansion Market Expansion · This year · High confidence 4 additional states
    On luxury, we currently plan to expand our portfolio to four additional states this year and are also eyeing duty-free as an opportunity.

    — Nilanjan Sarkar

Volume

  • Rajasthan Regular & Others Volume Growth Volume · Longer-term · Medium confidence 5% to 7%
    But from a longer-term point of view, 5% to 7% volume growth in Rajasthan with 10% NSV growth but that might be split into 2 years.

    — Shekhar Swarup

Debt

  • Debt Guidance Debt · H1 · Medium confidence Number to be provided
    Right now, we don't have a guidance for that, but thank you for that suggestion. We'll work on that guidance and give a number in H1.

    — Shekhar Swarup

What to watch in Q1 FY26

Manufacturing Margin per Liter Stabilization

Ongoing
Current INR3 in Q4 FY25
Target INR5 to INR7 per liter

Why it matters

This is a key profitability metric for the manufacturing segment, indicating the effectiveness of raw material procurement and pricing policies.

We expect this trend to continue and margins to stabilize around INR5 to INR7 per liter.

Risks & concerns

  • Competition in UP IMIL Market

    medium

    Analysts raised concerns about entrenched players (Radico, IGL) in UP. Management acknowledges but expresses confidence in their route-to-market and brand strategy.

    Analyst acknowledged

  • UK FTA Implementation Uncertainty

    medium

    Unclear implementation details and timeline (likely FY27) for the UK FTA make its full impact uncertain, though it's expected to make scotch cheaper.

    Both acknowledged

  • Raw Material Price Volatility

    low

    Management acknowledges past volatility but states current FCI policy provides stability, expecting prices to remain 'cool' and margins to stabilize at INR5-7/liter.

    Management acknowledged

  • Q4 Policy Transition Impact

    low

    Management noted Q4 generally sees slowdowns due to excise policy transitions (March-April), inventory management, and credit securing, which is a natural consequence.

    Management acknowledged

Q&A highlights

6 direct
Corn oil extraction impact on DDGS and biodiesel plans Direct
So it does degrade DDGS, but the net value is much higher. So that's not a significant -- it's not a concern at all, in fact. No plans to enter biodiesel currently as I believe that market is not very profitable.

Clarifies the value proposition of corn oil extraction and the company's stance on entering the biodiesel sector.

Asked by Shashank Agarwal

IMFL UP market breakeven timeline and ENA sourcing Direct
Coming to UP, if we continue on the trajectory of UP, we are expecting '25, '26 itself to be the breakeven year. It could be give or take, but we are expecting it to be well within the zone of breakeven. [...] So at this point of time, we are buying ENA from other players within UP, because this is the environment at this point of time that is more favorable.

Provides a timeline for profitability in the new UP IMFL market and explains the current ENA sourcing strategy.

Asked by Soumya, Nitin Awasthi

Discrepancy in Prestige & Above revenue per case vs. retail price Direct
Our net sales value is rupees per case figure exclusive of excise duty and VAT... And the first number is the bottle number and the INR1,400 is the per case number.

Clarifies the calculation of net sales value for IMFL products, distinguishing it from retail price which includes taxes.

Asked by Kiran

Manufacturing business margin stabilization Direct
So what has changed to earlier is that there is a very large supply available of raw material from FCI at a fixed price or rather at a price where we are able to earn a fixed margin because the ethanol price is also fixed on the other side. As a result, if raw material prices, what is available in the open market goes up very steeply, then distilleries have the ability to convert to FCI. So I -- that is why I feel that raw material prices will now be range bound and volatility will reduce.

Explains the rationale behind the expected stabilization of manufacturing margins at INR5-7 per liter, linking it to government policy on raw materials.

Asked by Nigel

Competitive dynamics in UP IMIL market Direct
So, it's no different in our alcohol industry regardless of the segment. Our strategy is obviously built route to market and do the basics, get your liquid delivery trials right and then keep on expanding our presence. And it has worked for us in IMFL and there is no reason to believe that it is not going to drive us home in IMIL segment as well.

Addresses concerns about competition from entrenched players in the new UP market and outlines the company's strategy.

Asked by Dhwanil Desai

Manufacturing expansion strategy Direct
We announced that decision I think now almost 2 years ago. So that's not we stopped expanding further capacities. I believe it was 2 years, maybe even more, and we are not going to take up further capex in ethanol -- growing ethanol and ENA capacities. There will be capex required for upgradation or certain maintenance capex. Aside from that, there is going to be no greenfield or brownfield expansions.

Clarifies that the company has halted greenfield/brownfield expansion in ethanol/ENA capacity, focusing only on maintenance and upgradation.

Asked by Sarvesh Gupta

Impact of UK FTA Partial
The scotch that we buy is going to become cheaper for sure, and that will aid in profitability. None of that is currently budgeted because we don't know exactly how it's going to get implemented. I think we'll have more information on this after the first half of this year. [...] And my take is the impact of this is likely to spill into FY '27 than in the current year because there is still a long gap between pending the agreement and laying down the rules and the guidance for it to actually start happening.

Discusses the potential positive impact of the UK FTA on scotch costs and profitability, but highlights the uncertainty and delayed timeline for full effect.

Asked by Sneha Jain

Byproducts contribution to revenue Partial
We don't really track that as a separate revenue item. For us, it's a cost card for ENA or ethanol, which includes the realization from byproducts. But it will be in the range -- my sense is it will be in the range of 7%, 8%. [...] It's a 6%.

Provides an estimated contribution of byproducts to revenue, clarifying its role in the overall cost structure of ENA/ethanol production.

Asked by Sahil Jain

2 min read 6 chapters

Detailed narrative

Robust Growth in Consumer Business, Led by Prestige & Above

Globus Spirits' consumer business delivered strong performance in FY25, with overall revenues growing by 26% year-on-year. The Prestige & Above segment was a key driver, achieving an impressive 186% year-on-year revenue growth and reaching INR129 crores, surpassing the initial guidance of INR100 crores. The Regular & Others segment also contributed significantly, growing by 17% in FY25 to INR864 crores, with an EBITDA margin of 16% for the full year.

Manufacturing Segment Shows Margin Recovery and Stability

The manufacturing business, which contributed 61% to total revenues in FY25, demonstrated notable margin improvement in Q4 FY25. EBITDA margins for the segment rose to 3% in Q4 from 1% in Q3, and the margin per liter increased to INR3. Management expects these margins to stabilize around INR5 to INR7 per liter, attributing this to the availability of raw materials from FCI at stable prices, which reduces volatility.

Strategic Expansion and Brand Portfolio Diversification

The company expanded its brand portfolio by launching 7 new brands, bringing the total to 11 across whiskey, gin, vodka, and rum segments. A significant strategic move was the entry into the beer market in Uttar Pradesh through a joint venture, Globus Ansa India Limited, which launched Carib 500 ml strong beer. The company plans to expand its Prestige & Above portfolio into four additional states this year and is exploring duty-free opportunities.

Key Capex Projects Progressing Towards Commissioning

Globus Spirits incurred a total capital expenditure of INR161 crores in FY25. The multi-feed distillery project in Uttar Pradesh, with an estimated capex of INR115 crores, is progressing well and is expected to be commissioned in Q3 FY26. Additionally, a malt plant in Rajasthan, costing INR29 crores, was commissioned and capitalized in Q1 FY26. These investments are crucial for supporting future growth and improving operational capabilities.

Increased Finance Costs and Working Capital Dynamics

Finance costs increased by INR20 crores in FY25, primarily driven by a INR17 crores increase due to changes in working capital mix and financing for the Prestige & Above segment. Long-term borrowings increased by INR72 crores to fund capex. The company also deposited INR110 crores in advanced excise duty in Rajasthan, financed by short-term borrowings, which is expected to normalize within H1 FY26, impacting current assets.

Outlook on Margins and Market Entry in UP

Management is confident that IMIL operations in Uttar Pradesh will reach breakeven in FY26. Once the UP distillery is commissioned, margins in UP are expected to align with Rajasthan's, in the 16-17% range for the Regular & Others segment. The company anticipates continued robust growth in IMFL, driven by focused efforts on brand expansion and deeper market penetration, despite competitive dynamics in new markets.

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