Tilaknagar Industries rallies 16%; hits all-time high on healthy Q2 results

Shares of Tilaknagar Industries hit an all-time high of Rs 248, as they rallied 16 per cent on the BSE in Friday’s intra-day trade on back of seven-fold jump in trading volumes after the company reported a healthy eranings for the September quarter (Q2FY24).

The stock of breweries & distilleries company surpassed its previous high of Rs 226 touched on October 13.  Thus far in the calendar year 2023, the stock has zoomed 112 per cent, as compared to 5.3 per cent rise in the S&P BSE Sensex. Till 02:49 PM; a combined 1.05 million equity shares representing 5.5 per cent of total equity of Tilaknagar Industries changed hands on the NSE and BSE.

In Q2FY24, Tilaknagar Industries reported 130 per cent year-on-year (YoY) jump in its consolidated profit after tax at Rs 32 crore. Net revenue grew 29 per cent YoY at Rs 354 crore. Earnings before interest, tax, depreciation, and amortisation (Ebitda) margins expanded to 13.4 per cent as compared to 11.4 per cent in Q2FY23 and 12.6 per cent in Q1FY24 despite increase in ENA prices. The management said it seeing some softening of prices in packing materials.

The company achieved YoY volume growth of 17.2 per cent in Q2FY24 and 27.8 per cent in April to September period (H1FY24), compared to overall Indian-made foreign liquor  (IMFL) industry growth of 3-4 per cent in H1.

Tilaknagar Industries said net Sales Realization (NSR) per case further improved to Rs 1,273 in Q2FY24 from Rs 1,179 in corresponding quarter last year, on account of a combination of improved brand and state mix as well as price increases received in its key state of Telangana.

The management said the company’s focus over the coming 6-8 quarters will be to increase market share in existing and new regions through robust growth in its brandy portfolio.

Over the past few years, the company has been focused on building and growing its Prestige & Above portfolio. Given the increasing trend of premiumization and strong innovation pipeline, the management said the company is well placed to expand its market share in this profitable segment.

Favourable demographic dividend, income growth, rapid urbanization and low per capita consumption of alcohol will drive the overall industry growth. Growing prevalence of at-home alcohol consumption, inclusiveness across strata and demographics is providing numerous use-cases for consumption of innovative and experimental alcobev products, the company had said in its FY23 annual report.

The company is the largest player in the brandy category in India and is on track to further grow its position as a market leader in the category through further innovations and launches as well as stronger communication to grow and premiumize the brandy category. The company is on track to deliver mid to higher teen volume growth and at the same time achieve strong EBITDA margins through a mix of growth, premiumization and cost optimizations. While inflationary pressures could persist in the short term, the company is confident of protecting margins, it said.