Tilaknagar Industries Q1 Review: Systematix Maintains 'Buy', Hikes Target Price — Here's Why

Q1 FY26 revenue for Tilaknagar Industries rose 30.6% YoY to Rs 4091 million, exceeding expectations. Excluding subsidy income, revenue growth stood at a healthy 20.5%. The volume growth of 26.4% was strong, though NSR dropped due to regional price reduction in Andhra Pradesh.

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Systematix Report

Tilaknagar Industries Ltd. is undergoing a strategic transformation by acquiring the Imperial Blue whisky business, moving beyond its brandy-first, Southern India concentration to become a pan-India, multi-category player. This acquisition diversifies its portfolio into whisky and strengthens its presence across nonSouthern regions of India.

The Hon'ble Bombay High Court has upheld Tilaknagar Industries' exclusive ownership of the Mansion House and Savoy Club trademarks, ensuring continued and uninterrupted sales under these brands. Tilaknagar Industries has demonstrated strong performance with robust volume growth.

The company also maintains a strong balance sheet, achieving a net cash position of Rs 1.63 billion as of June 30, 2025. Furthermore, Tilaknagar Industries has approved an investment of Rs 590 million to significantly expand its Prag Distillery in Andhra Pradesh from 6 lakh to 36 lakh cases annually, safeguarding supply in a key IMFL market.

Stable input costs, cost optimization initiatives, continued premiumization, and a favorable shift in state and brand mix are expected to support margin expansion.

We have introduced our FY28E estimates. We have not factored in projections for the acquired Imperial Blue business. We await disclosure of Imperial Blue’s standalone financials from the company.

We continue to value the standalone business of Tilaknagar Industries. We project a revenue CAGR of 16.5% over FY25-FY28E, primarily driven by a volume CAGR of 15.7% during the same period.

We have built in Ebitda CAGR of 19.7%. In FY25, the operating margin (adjusted for subsidy income of c. Rs 290 mn for FY25) stood at 16.1%. We estimate margins to expand modestly to 16.3%/ 16.7%/ 17.1% for FY26E/ FY27E/ FY28E respectively.

This limited margin expansion reflects our expectation that a substantial portion of the gains will be reinvested into marketing initiatives to support brand building.

We have factored in taxation impact from Q2 FY26 onward. At the PBT level, we project a CAGR of 22.6% over FY25–FY28E. We maintain our Buy rating on the stock with a revised target price of Rs 568 (vs Rs 438 earlier), based on 45x June 2027E EPS.

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