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    Som Distilleries & Breweries Limited

    SDBL
    Fast Moving Consumer Goods·30 May 2025
    Management Summary

    Som Distilleries reported a strong full year FY25 with 13% revenue growth and 16% EBITDA growth, driven by volume expansion and margin improvement. However, Q4 FY25 saw a 12% revenue decline and 10% beer volume drop, primarily due to a steep excise duty hike in Karnataka, which has since been reversed. The company is expanding capacity with a new greenfield facility in UP and an expansion in Odisha, and guides for 20-22% revenue growth and 18% volume growth for FY26.

    Highlights

    5

    • Full year FY25 total income increased to INR 1,447.4 crores, showing a year-on-year growth of around 13%.

    • Full year FY25 EBITDA reached INR 180.7 crores, reflecting a growth of 16% YoY with a steady margin of 12.49% (vs 12.07% in FY24).

    • Full year FY25 net profit stood at INR 104.5 crores, showing a growth of 21% YoY.

    • Annual beer volume for FY25 was 234 lakh cases, up by 10% versus last year, and IMFL volume was 11 lakh cases.

    • Commenced construction of INR 600 crore greenfield facility in Farrukhabad, UP, and completed capacity expansion in Odisha plant from 60 lakh to 90 lakh cases per year.

    Concerns

    3

    • Q4 FY25 total income was down by 12% to INR 340 crores due to a steep excise duty increase in Karnataka.

    • Q4 FY25 beer volumes were down by 10% YoY.

    • Realization per case for FY25 was INR 545, slightly lower than INR 552 in FY24, a result of pack mix and brand mix.

    What Changed2

    vs Q1 FY26

    Guidance items6 → 5 (-1)Risks discussed4 → 3 (-1)

    Key financials

    Single quarter

    06 metrics
    1. 01Total Income₹1,447.4 Cr+13%YoY
    2. 02EBITDA₹180.7 Cr+16%YoY
    3. 03EBITDA Margin12.5%
    4. 04PBT₹143.7 Cr+18%YoY
    5. 05Net Profit₹104.5 Cr+21%YoY

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹40 crores this quarter · ₹350 crores (FY26) planned

    internal accruals and some debt

    Debt

    Net ₹151 crores

    Cost 0.8%

    Guidance & targets

    5
    CategoryTargetPriority
    Revenue
    Revenue Growth
    20-22%
    		High
    Volume
    Volume Growth
    18%
    		High
    Market Share
    Market Share in Tamil Nadu
    7-8%
    		Medium
    Margin
    EBITDA Margin
    Maintain at same level as last year
    		High
    Capacity
    Odisha Plant Capacity Impact
    Full capacity impact
    		High

    Impact of Karnataka excise duty reversal on volumes and revenue

    Next quarter (Q1 FY26)
    CurrentQ4 FY25 beer volumes down 10% due to duty
    TargetImproved volumes and revenue growth in Q1/Q2 FY26

    Why it matters

    This was a major headwind in Q4; its reversal should significantly boost performance.

    In my view, it's a short-term thing. I think there is some correction that has happened after our representation to the government and our case in the court, the government has withdrawn that duty. It happened around the third week of May. So we can look ahead for the next few quarters to be much far, far better than the previous quarter.

    How to verify

    key_financials.metrics[label='Beer Volume Growth']

    Risks & concerns

    3
    RiskSeverity

    Steep excise duty increase in Karnataka

    INR 130 per bulk liter differential duty on economy brands, increasing consumer prices by 40-50%, but has since been withdrawn. — Management acknowledged

    high

    Uncertain monsoon/weather

    Unpredictable weather patterns could affect demand, though less skewed in the South, so not expected to have a big impact. — Management acknowledged

    medium

    Distribution challenges in specific channels

    Commercial issues with a key distributor (Madhuloka) preventing placement of certain brands in Bangalore. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “We had a very tepid Q4 as there was a steep excise duty increase in the state of Karnataka, which made the beer dearer and also affected the volumes of the industry... And as far as Power Cool is concerned, I think the point was the Karnataka excise imposed a differential duty of INR 130 per bulk liter on economy brand. So that took up the duty by about 40%, 50%.”

    Explains the Q4 performance dip and highlights a key regulatory risk that impacted the business.

    asked by Hiten Boricha

    2 min read6 chapters

    Detailed Narrative

    01

    Q4 FY25 Performance Impacted by Karnataka Excise Duty

    Som Distilleries reported a challenging Q4 FY25, with total income declining by 12% to INR 340 crores. This was primarily attributed to a steep excise duty increase in Karnataka, which made beer dearer and affected industry volumes, leading to a 10% drop in beer volumes for the quarter. Despite the sales loss, the company managed to post an EBITDA of INR 42.8 crores with a 13% margin and a net profit of INR 23.7 crores with a 7% margin.

    02

    Strong Full Year FY25 Growth Driven by Volume and Margin Expansion

    For the full financial year FY25, Som Distilleries delivered robust performance, with total income increasing by 13% year-on-year to INR 1,447.4 crores. EBITDA grew 16% to INR 180.7 crores, expanding the margin to 12.49% from 12.07% in FY24. Net profit saw a significant 21% increase to INR 104.5 crores. Annual beer volumes rose 10% to 234 lakh cases, and the flagship Hunter brand grew 15% year-on-year.

    03

    Strategic Capacity Expansion Underway

    The company is actively pursuing capacity expansion to support future growth. Construction has commenced on a new INR 600 crore greenfield facility in Farrukhabad, Uttar Pradesh, designed for a capacity of 10 lakh cases per month. Phase 1 of this project is estimated at INR 350 crores for FY26, with INR 40 crores already spent. Additionally, capacity at the Odisha plant has been expanded from 60 lakh to 90 lakh cases per year, with its full impact expected in the current fiscal year.

    04

    Karnataka Excise Duty Reversal and Market Outlook

    A key development was the withdrawal of the steep excise duty in Karnataka around the third week of May, which had previously imposed a differential duty of INR 130 per bulk liter on economy brands. Management expects this reversal to lead to significantly better performance in the coming quarters⏳. The company aims to expand market reach, drive innovation, and deliver value to stakeholders, with a focus on building on current performance.

    05

    FY26 Guidance: Double-Digit Revenue and Volume Growth

    Looking ahead to FY26, Som Distilleries has provided optimistic guidance, expecting revenue growth of 20-22% and volume growth of approximately 18%. The company anticipates maintaining its margins at similar levels to FY25, benefiting from stable raw material prices. In new markets like Tamil Nadu, where the Hassan plant now services, the company targets achieving a 7-8% market share within 1-3 years.

    06

    Market Presence and Distribution Strategy

    Som Distilleries holds strong market positions, being the number one player in Madhya Pradesh, number two/three in Karnataka, number two in Delhi, and a close contender for number one in Jharkhand and Odisha. While distribution for its Woodpecker brand is strong in channels like Tonic in Bangalore, the company faces 'commercial issues' preventing placement in other channels like Madhuloka for some brands, indicating ongoing strategic distribution management.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.