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Pincon Spirit Ltd.

BSE: 538771 Sector: Consumer
NSE: PINCON ISIN Code: INE675G01018
BSE 00:00 | 04 Feb Pincon Spirit Ltd
NSE 05:30 | 01 Jan Pincon Spirit Ltd
OPEN 6.81
PREVIOUS CLOSE 7.30
VOLUME 35092
52-Week high 7.46
52-Week low 0.00
P/E 0.71
Mkt Cap.(Rs cr) 35
Buy Price 6.77
Buy Qty 800.00
Sell Price 7.30
Sell Qty 200.00
OPEN 6.81
CLOSE 7.30
VOLUME 35092
52-Week high 7.46
52-Week low 0.00
P/E 0.71
Mkt Cap.(Rs cr) 35
Buy Price 6.77
Buy Qty 800.00
Sell Price 7.30
Sell Qty 200.00

Pincon Spirit Ltd. (PINCON) - Chairman Speech

Company chairman speech

"If you ask me what we have done that it is indeed creditable I will only saythis: we offered a branded product in a space where nobody previously aspired to; weseeded the market with branded offerings; we created an appetite for betterproducts."

Pincon Spirit Limited is one of the most attractive proxies of India’s liquorindustry.

Our Company is a proxy of the vast consumption potential at the base ofIndia’s consumption pyramid. Our Company is a proxy of an increased national emphasison hygiene. Our Company is a proxy of the country’s branding and packagingrevolution. Our Company is a proxy of the nation’s growing aspirations. Our Companyis a proxy of the country’s millions who are eager to unwind and entertainthemselves.

It’s on the back of these diverse realities our Company has emerged as one ofthe fastest-growing companies in India today.

Our Company grew revenues by 43% and profit after tax by 53% in 2015-16 – theeighth successive year of profitable growth.

This outperformance was the result of a conscious decision to grow the business ina manner distinctive from our peers. Principally liquor companies in India focuson the premium branded segment avoiding the low-value IMIL portfolio which is consideredto be incompatible with the premium portfolio and its realisations not considered goodenough to ensure profitable growth.

Our Company was able to perceive opportunities where others saw challenges becauseof our in-depth understanding of the business. We have grown from a point where wedistributed products for some of the largest liquor companies in the country for a numberof years. We saw how the business worked from up front – what trade policies werefollowed by the larger companies how consumers responded to different prices and howofftake responded to changes in positioning.

As it turned out we extended from distribution to blending bottling brandingmarketing and retailing possibly the longest value chain in the country’s liquorindustry. Being small we possessed the right size to manage overheads. Besides thedecision of the West Bengal Government to create a composite license for the liquor sectormade it possible for us to widen our reach across the IMIL and IMFL segments.

This convergence – right place right time right size – brought us faceto face with one of the largest sectoral opportunities. In West Bengal where we selectedto enhance our presence there was a large illicit liquor trade marked by spuriousproducts absence of quality assurances and no certifications low product traceabilityand most importantly – no contribution to the exchequer. Our Company addressedthis vast segment (estimated in excess of H50000 crore a year across India) by offeringa superior packaged and branded IMFL product priced affordably for the masses we createdan inducement for thousands of consumers to graduate their tastes preferences andlifestyles.

So if you ask me what we have done that it is indeed creditable I will only saythis: we offered a branded product in a space where nobody previously aspired to; weseeded the market with branded offerings; we created an appetite for better products.

The result is that we grew revenues at a CAGR of 57.25% in the three years leadingto 2015-16; we grew our profit after tax at a CAGR of 58% during the same period.

Optimism 2016-17

• Leverage acquisitions to step up production to over 1.2 crore bottles per monthin the IMIL segment.

• Acquire two bottling units in Malda and Cooch Behar.

• Strengthen our presence throughout West Bengal and Karnataka.

• Widen our IMFL portfolio to reap promising returns.

What we have achieved in the last few years pales in comparison to what lies ahead.

The prospects are compelling. In India there are only two pan-Indian MNCs; therest of the players are regional. The market is getting increasingly corporatised. Thereis a greater respect for companies that can market wider and deeper. There have been noefforts undertaken towards educating the masses about the consumption of safe and hygienicIMIL.

Our Company is attractively placed to capitalise on these realities. We achieved acritical mass of over 2100000+ cases of IMFL and IMIL products for the year underreview following which scale-based efficiencies will translate greater marginsvisibility. We have an unusual commitment towards logistics management and customerresponsiveness for a company of our size. We have been blending grain-based extra neutralalcohol with RO-treated water which has enabled us to create an absolutely odourless IMILproduct. Besides ours is an instance of a company that has widened its national footprintparallely with its regional spread.

Considering that the acquired facilities are running profitably we expect them tocontribute handsomely to our financials in 2016-17. More importantly we have invested ina medium-term plan that comprises expanding our operating facilities evolving our productmix and widening our footprint to cumulatively grow our revenues to C3000 crore by 2020.

The other distinctive Pincon initiative has been our decision to extend into acompletely different business segment – the refining branding and distribution ofedible oils in the FMCG segment. This strategy has helped us de-risk ourselves from anexcessive dependence on the liquor segment. Following an investment in product varietysmart marketing strategies and superior distribution network we have carved out asuccessful presence in this segment marked by attractive revenues. This provides us withthe optimism that this segment can emerge as a full-fledged business capable of enhancingshareholder value sustainably.

I strongly believe that a company can ensure sustainable growth through opencommunication with its stakeholders.

I would like to thank our stakeholders for their unflinching support and persistentcommitment in helping Pincon reach such great heights. I look forward to the next yearwith the strong belief that Pincon will continue to receive your encouragement.

Monoranjan Roy

Chairman and Managing Director

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