Allied Blenders Targets 15% Ebitda Margin By FY27, Bets On Capex, Premiumisation

Allied Blenders and Distillers, one of India's leading spirits manufacturers, aims to achieve Ebitda margin of 15% and above by fiscal year 2027, according to its Managing Director Alok Gupta. 

The company also aims for a similar topline growth in value terms in the next two years, backed by capital expenditure plans and product premiumisation initiatives.  

“On the back of our capex programme and existing Ebitda, we should get to industry parity of 15%. Other initiatives, such as the India-UK Free Trade Agreement and efforts in the super premium and luxury segment, we have not baked in, but it should lead to a further expansion of at least 300 basis points. So, I think by FY27, this is where we should target to land at,” Gupta said in a conversation with NDTV Profit on Friday.

“Topline growth should be over 15% in value terms,” he added.

In the quarter ended March 2025, the company reported a 20% surge in revenue at Rs 921 crore. The earnings before interest, taxes, depreciation and amortisation reached Rs 136 crore, while net profit stood at Rs 78 crore. It was a significant turnaround from a net loss of Rs 2.4 crore in the corresponding quarter last year. Additionally, the company declared a final dividend of Rs 3.6 per share for fiscal 2025.

Gupta attributed the robust results to a strategic focus on the prestige and above (P&A) segment, improved gross margins, and reduced working capital costs.

“We've seen a 700 basis point expansion in gross margins due to better procurement, operational efficiencies, and softer commodity prices,” he said. The company also benefited from a reduction in interest costs, boosting overall profitability.

Volume growth for the quarter stood at 21%. Gupta highlighted that while the mass premium segment is expected to maintain single-digit growth, the higher-margin P&A segment will drive both volume and value growth in the coming years. 

“For FY26, we anticipate double-digit volume growth, but value growth will significantly outpace this due to our focus on premiumisation,” he added.

Gupta expects the India-UK FTA to lower import duties on bulk scotch. As one of India's largest exporters of bulk scotch, the company anticipates a 200 basis point margin boost from the FTA. It will further strengthen its super premium and luxury offerings by making them more accessible in key markets.

The company is broadening its international footprint. It has expanded from 14 to 23 countries. Gupta outlined three key growth strategies: strengthening presence in markets with Indian diaspora, such as the UAE and the US; building a scalable network in Africa and targeting premium markets in the West, and duty-free channels with its super premium and luxury portfolio. 

“Our international revenue has a better margin profile and lower working capital requirements, which will enhance our overall return on capital,” Gupta noted.

The company has announced a qualified institutional placement issue worth Rs 1,000 crore to fund future growth initiatives. It has announced a capacity expansion of around Rs 29 crore at its existing plant in Punjab.

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