Tilaknagar Industries surges 11%, nears record high on strong Q2 results

Tilaknagar Industries share price: Average trading volume on the counter more-than-doubled with a combined nearly 5 million shares changing hands on the NSE and BSE in less than 30 minutes of trading

Tilaknagar Industries share price surged 11 per cent to Rs 323.65 on the BSE in Tuesday's intraday trade after the company reported strong earnings for the second quarter ending September 2024 (Q2 FY25). Tilak Nagar Q2 profit after tax (PAT) jumped 82.4 per cent to Rs 58.2 crore on healthy operational performance. The maker of the Mansion House Brandy, India's largest and the world's second largest selling brandy, had posted PAT of Rs 31.9 crore in the year-ago quarter (Q2FY24).

 

Average trading volume on the counter more-than-doubled with a combined nearly 5 million shares changing hands on the NSE and BSE in less than half-an-hour of trading today. In comparison, the BSE Sensex was down 0.16 per cent at 78,653 at 09:41 AM. The stock had hit a record high of Rs 329.90 on September 13, 2024. In the past six months, Tilaknagar Industries has outperformed the market by zooming 40 per cent as against 6.4 per cent rise in the benchmark index.

 

 

In Q2 FY25, the company's earnings before interest, tax, depreciation, and amortisation (Ebitda) improved by 39.1 per cent year-on-year (Y-o-Y) to Rs 66.0 crore as against Rs 47.4 crore in the previous year quarter. Margins expanded 422 bps to 17.6 per cent on the back of superior brand mix as well as cost optimisation initiatives. The growth was despite subdued volume growth, on account of transitioning of RTM in the company's key state of Andhra Pradesh (AP) in Q2, the management said.

 

Net revenue from operations, however, grew only 5.8 per cent Y-o-Y to Rs 374.9 crore as compared to Rs 354.4 crore last year. The slowdown in growth was driven by the transition to a new policy in the company's key state, the management said. Meanwhile, the company turned net debt free as of September 2024.

 

With retail going private in AP from mid-October onwards, the management expects to continue with its industry-beating growth trajectory, achieved through a combination of doubling down on market share gains from brandy portfolio as well as new product launches across categories. The worst of the inflationary cycle seems behind us, and the management expects to grow on the company's profitability despite increasing investments in A&SP, providing meaningful 'Share of Voice' to brandy as a category.

 

Tilaknagar Industries is among India's top alcoholic beverage companies with a diverse array of brands across various categories such as brandy, flandy, whisky, gin, and rum. With a strong foothold primarily in South India and Canteen Stores Department (CSD) stores, Tilaknagar Industries has cemented its position as a leader in the Indian-made foreign liquor (IMFL) market.

 

The company's portfolio showcases iconic brands like Mansion House and Courrier Napoleon, both of which have garnered immense popularity. Notable offerings include Mansion House Brandy, Mansion House Chambers, Courrier Napoleon Brandy Green, Flandy (flavoured brandy range), Mansion House Whisky, Blue Lagoon Gin, Madiraa XXX Rum, and Courrier Napoleon Brandy Gold.

 

Tilaknagar Industries continues to be the largest player in the brandy category in India, with two millionaire brands. With continued focus on brandy and a strong innovation and launch pipeline, the company expects to not only expand its market share within the brandy category, but also in overall IMFL through launches in other categories in the premium segments. The company will continue with its premiumisation and cost optimisation efforts, enabling it to expand profitability.