Tilaknagar Industries (TI), the Indian made foreign liquor (IMFL) maker , has firmed up plans to foray into wines after the acquisition of Goan bottling-unit-cum-winery, Kesarval. The acquisition had given TI access to two local brands, Boxy and Royal Goan, which would be promoted aggressively, said Chief Financial Officer Lalit Sethi.
TI, which ranks third in terms of market capitalisation after United Spirits and Radico Khaitan, will also look at ramping up production at the winery, which has a capacity of 50 kilolitres per annum. “With some minor modifications, we can take up production to 900 kilolitres per annum,” said Sethi. “This we will do once we are able to gauge the response in the marketplace to the two brands.”
The foray into wines is part of the company’s larger plan of getting into new segments and markets. In the last year and a half, the Rs 350-crore company, the maker of brands such as Mansion House Brandy, Senate Royale Whisky and Savoy Club Rum, has moved into markets in the north, east and west from its traditional base in the south. This it has done with the help of 21 third-party tie-ups and seven leased arrangements, in addition to four manufacturing facilities of its own, including one each in Maharashtra, Andhra Pradesh, Karnataka, and Goa.
By volume, Tilaknagar ranks sixth in the IMFL pecking order, with 8.5 million cases per annum. United Spirits leads the table, with 100 million cases per annum, followed by Pernod Ricard (16 million cases), Radico Khaitan (15 million cases), ABD (12.4 million cases) and John Distilleries (10 million cases per annum). One case means 12 bottles of 750 millilitres.
Sethi said both production ramp-up and increase in sales should help the company improve its volume per annum.
TI recently concluded a Rs 135-crore qualified institutional placement. About Rs 70-80 crore of the proceeds will go towards bringing down debt, which stands at Rs 460 crore at the moment. The balance will go towards increasing its bottling capacity at Andhra Pradesh from 50,000 cases per month to 300,000 cases per month. “The ramp-up will be concluded by the end of this year,” said Sethi.
For the September quarter, TI reported sales of Rs 127.08 crore, a rise of 81 per cent over the corresponding period last year. Profit after tax rose 70 per cent to Rs 12.61 crore from Rs 7.42 crore.
