Tilaknagar Industries Limited

Tilaknagar Industries reported a strong Q4 FY25, with revenues growing 13.1% YoY to ₹406 crore. Volume performance was particularly robust, increasing 20.1% YoY and 13.5% QoQ. For the full fiscal year 2025, the company achieved a net revenue of ₹1,434 crore. This rebound follows a subdued first nine months, driven by stable excise policy changes and new product launches.

The company's volume growth was significant, with Andhra Pradesh stabilizing and seeing market share expansion, growing over 30% in Q4. Karnataka also showed impressive growth, exceeding 25% YoY in H2 FY25, partly due to excise duty reductions. Other southern states like Tamil Nadu, Odisha, and Telangana also contributed to this growth, predominantly in the Prestige and Above segment, leading to overall market share gains.

Tilaknagar Industries is actively expanding its luxury and super premium portfolio. The Monarch Legacy Edition Brandy, a luxury offering, has shown encouraging traction in Maharashtra, Goa, and Puducherry. The company also commenced dispatch of Samsara Gin in April 2025 through its partnership with Spaceman Spirits Lab, with plans for a super premium whisky launch in H1 FY26, aiming for a presence across five key IMFL categories. The mass prestige portfolio, including Mansion House Brandy, continues to perform well, with efforts to make Brandy a more aspirational category.

Profitability saw a significant uplift, with Q4 EBITDA growing 62.6% YoY to ₹78 crore. The adjusted EBITDA margin for Q4 stood at 16.6%, an increase of over 300 basis points YoY. For FY25, adjusted EBITDA margin improved by 270 basis points YoY to 16.1%. Adjusted PAT for Q4 was ₹64 crore, a 62.6% YoY increase, and for FY25 (excluding subsidy), PAT reached ₹201 crore, up from ₹141 crore in FY24.

The company's financial health improved significantly, moving from a net debt position of ₹74 crore as of March 2024 to a net cash position of ₹107 crore as of March 2025. This reflects disciplined debt and cash management strategies. The Board of Directors has recommended a dividend of ₹1 per equity share for FY25, underscoring commitment to shareholder returns.

Management guided for an EBITDA margin of 15.5% to 17% (adjusted for subsidy) for the next couple of years, with revenue growth expected in the upper teens and volume growth in the high mid-teens for FY26. The A&SP reinvestment rate is projected to exceed 2% for FY26, supporting brand building and premiumization efforts. The company aims to expand its presence across various IMFL categories and markets, leveraging its robust distribution network.

The company is awaiting a government decision regarding license fees for Prag Distillery, which is crucial for a planned capacity expansion from 6 lakh to 36 lakh cases in Andhra Pradesh. An appeal is pending against income tax assessment orders, with carry-forward losses of ₹32 crore as of March 31, 2024, and no tax expected for the June quarter. The legal case concerning the Mansion House Brand trademark is ongoing, with the next hearing scheduled for June 9th, and the status quo is currently maintained.