Allied Blenders plans double-digit growth, higher margins by FY27

Allied Blenders plans to invest Rs 547 crore to strengthen backward integration, expand globally, and grow its premium and luxury portfolio, aiming for higher margins and sustainable growth

Mumbai-based Allied Blenders and Distillers (ABD), maker of Indian-made foreign liquor (IMFL), is targeting double-digit volume growth and mid double-digit value growth over the next three fiscal years. The growth will be supported by capacity expansion, backward integration, and a stronger focus on its premium and luxury spirits portfolio.

 

What investments is Allied Blenders making to improve margins?

 

ABD plans to invest Rs 547 crore in a capital expenditure programme to enhance its backward integration capabilities across its PET (polyethylene terephthalate), malt, and extra-neutral alcohol (ENA) units. The PET facility is already operational, with an annual capacity of 600 million bottles, while the malt and ENA units are progressing on schedule.

 

“This investment is expected to improve our gross margins by around 300–500 basis points,” said Alok Gupta, managing director, ABD.

 

How did ABD perform in the second quarter?

 

Allied Blenders reported a 32 per cent rise in net profit in the second quarter despite a 3.7 per cent decline in reported gross revenue, which the company attributed to accounting changes in excise duty treatment rather than weaker operations. The company aims to lift its EBITDA margins to around 18–20 per cent by FY27.

 

“Revenue from operations appears lower because some states, including Uttar Pradesh, have changed their billing structure to exclude excise duty,” Gupta told Business Standard. “The right key performance indicator (KPI) to look at is our net revenue, which grew in double digits. The difference is purely due to policy treatment and not unit economics.”

 

What governance measures is the company undertaking?

 

On the governance front, ABD is merging its operational subsidiaries, Deccan Star Distilleries and Sarthak Blenders & Bottlers, to simplify its corporate structure and improve transparency. “The merger is EBITDA- and revenue-neutral,” Gupta clarified. “It’s being done proactively to reduce related-party transactions and strengthen governance practices.”

 

How is ABD expanding its international footprint?

 

The company is expanding its international presence from 17 countries to 30, with a near-term goal of 35 markets. Its footprint now spans Africa, North America, Europe, Southeast Asia, and the duty-free channel. This expansion will also serve as a launchpad for its first single malt distillery, coming up in Telangana, which is expected to be operational by 2029.

 

What are ABD’s growth and portfolio priorities for FY27?

 

Looking ahead, the alcobev player aims to increase the share of its P&A (prestige and above) segment from 47 per cent to 50 per cent by FY27, driven by portfolio diversification and international expansion.

 

“We did about 33 million cases last year and expect to grow at a double-digit rate. Our strategy is clear — strengthen margins through backward integration, expand our premium portfolio, and leverage scale both in India and abroad. The next few years will be about sustainable, profitable growth,” Gupta said.