Tilaknagar Industries surges 14%, hits 52-week high on healthy Q4 results

Despite a reduction in gross margins, the company was able to maintain its EBITDA margin through multiple cost optimization efforts and improved productivity

Shares of Tilaknagar Industries rallied 14 per cent to hit a 52-week high of Rs 157.15 on the BSE in Thursday’s intra-day trade on heavy volumes. The stock was trading at its highest level since 2010 and in the past two days, it has surged 17 per cent after the breweries & distilleries company reported strong earnings for the January-March quarter (Q4FY23).

In the past one month, it has zoomed 37 per cent as compared to a 3.2 per cent rise in the S&P BSE Sensex.

At 01:13 pm; the stock was trading 13 per cent higher at Rs 155 as against a 0.13 per cent gain in the benchmark index. The average trading volumes on the counter jumped over six-fold today. A combined 3.95 million shares had changed hands on the NSE and BSE.

In Q4FY23, Tilaknagar Industries’ profit after tax (PAT) more-than-doubled to Rs 32.69 crore on strong volume growth. The company had posted PAT of Rs 10.03 crore in Q4FY22. Revenue grew 18 per cent quarter-on-quarter (QoQ) and 48 per cent year-on-year (YoY) at Rs 357 crore.

Reported gross profit margin contracted 409 bps to 44.7 per cent. However, reported earnings before interest, taxes, depreciation and amortization (ebitda) margin expanded 147 bps to 12.2 per cent.

Gross margins during the quarter were impacted due to full quarter impact of glass price increase (glass price increase took place in mid of Q3FY23) as well as regional mix.  Despite this reduction in gross margins, the company was able to maintain its EBITDA margin through multiple cost optimization efforts and improved productivity, the company said.

The management said the company has seen strong growth in Mansion House Flandy, Flavoured Brandy range; Flandy is currently available only in Telangana and Puducherry and will be launched in other regions soon, it added.

Tilaknagar Industries is predominantly engaged in the business of manufacturing and sale of Indian Made Foreign Liquor (IMFL) and its related products. The company is the maker of India’s largest selling premium brandy i.e. Mansion House Brandy. It has more than 15 brands across brandy, whisky, gin, rum and vodka.

Consumption of IMFL in India continues to rise on account of increasing urbanisation. There has been far-reaching acceptance towards consumption of alcoholic drinks in urban areas. Rising incomes have led to increasing adoption of the pub and cocktail culture in the urban areas, which has also enhanced the demand for alcoholic beverages. In addition, more than 10 million people get added each year to the eligible alcohol drinking population, making India potentially one of the highest growing alcohol market, the company said.