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Tilaknagar Industries Ltd. Q4 FY24 Earnings Conference Call Summary
Key Highlights • Date of Submission: May 27, 2024 • Earnings Call Date: May 22, 2024 • Regulatory Compliance: Submitted transcript to BSE and NSE under SEBI's Regulation 30.
Performance Overview • Volume Growth: 16% in FY24, driven by Mansion House and Courrier Napoleon brandies. • Market Share Gains: Significant increases in Telangana and Puducherry. • Financial Management: Reduced net debt and finance costs. • Dividend Declared: Rs. 0.50 per share for FY25.
Management Insights • Focus Areas: Premiumization and innovation for sustained growth. • Q1 Performance: Impacted by election regulations; flattish compared to previous year. • Growth Guidance: Mid-double-digit growth expected for FY25, with sales and EBITDA growth anticipated to exceed volume growth.
Capital Expenditures and Growth Projections • Investment Plans: No immediate significant investments; exploring grain distillery options. • Brandy Category Growth: Projected 10%+ volume growth over the next 2-3 years. • Non-Brandy Portfolio: Optimistic expansion while maintaining a healthy balance sheet.
Operational Insights • Sales Mix Impact: Variability in performance across states; lower-tier brands outperforming premium in Kerala. • Capacity Utilization: Full capacity in Karnataka and Prag plants; underutilization in Shrirampur and Punjab. • Asset-Light Model: Continued reliance on contractual bottling for growth.
Financial Strategy • Free Cash Flow: Primarily reinvested in the business; potential for corporate actions. • Volume Growth Guidance: Mid-double digits for FY25; 11%-13% for FY26.
Cost and Marketing Insights • COGS Trends: Softening glass prices; volatile ENA prices with hopes for stabilization. • Marketing Spend: Increased from 1.3% to 1.7% of revenue in Q4; plans to boost investment.
Additional Inquiries • Volume Discrepancy: Secondary sales grew 6%, primary sales only 0.5% due to cautious strategies. • Exceptional Item: Rs. 8 crore write-off for debtors deemed prudent. • Tax Rates: No tax for upcoming quarters; potential rate of around 25% from Q3.
Closing Remarks • Sustainable Growth Focus: Emphasis on margin expansion and innovation in the brandy segment.
Tilaknagar Industries Limited Q3 FY24 Earnings Conference Call Summary
Submission Details • Date of submission: February 16, 2024 • Regulatory compliance: Regulation 30 of SEBI's Listing Obligations • Call date: February 13, 2024 • Key participants: Chairman Amit Dahanukar, CFO Abhinav Gupta
Company Performance Highlights • Volume Growth: • 13% in Q3 FY24 • 22% for the nine months • Revenue Growth: • 24% increase in net revenue for Q3 • Key Drivers: • Success of premium brands (Mansion House, Courrier Napoleon Brandy) • New product launches (Flandy, Mansion House Chambers) • Margins: • Maintained EBITDA margins despite inflationary pressures
Management Insights • Premiumization and Innovation: Commitment to enhancing brandy segment • Credit Rating Upgrade: Recent upgrade from Crisil
Q&A Highlights • Raw Material Prices: • ENA prices increased from INR 67 to INR 72 per liter • Signs of cooling in other input costs (e.g., glass) • Brandy Segment Growth: • Projected volume growth of 12% to 15% for FY25 • New Product Launch: • MHB Chambers priced at a 50% premium to Mansion House Brandy • Other Income: • Increase attributed to recovery of old advances and investment interest • Expansion Plans: • 85% of sales from South; exploring northern markets
Financial Performance • Current Margins: • 13.6%, impacted by raw material price inflation • Potential Margin Improvement: • Focus on premiumization and cost optimizations • Interest Cost Projections: • Potential 200 basis point reduction post CRISIL upgrade
Manufacturing Insights • Capacity Utilization: • Shrirampur plant: 30-35% • Vahni plant: Full capacity • Prag plant: Full capacity • Punjab Expo plant: 20% capacity (CSD market)
Closing Remarks • The call concluded with thanks from Nikunj Jain of Orient Capital.
Tilaknagar Industries Q2 FY24 Earnings Conference Call Summary
Submission Details • Date of submission: November 9, 2023 • Regulatory compliance: Regulation 30 of SEBI's Listing Obligations • Key executives present: Chairman Amit Dahanukar, CFO Abhinav Gupta
Financial Performance • Volume Growth: 17% year-on-year • Net Revenue Increase: 29% for Q2 • EBITDA Growth: 51% with improved margins despite inflation • Debt Refinancing: Significant reduction in net debt
Key Discussion Points • ENA Price Impact: • Increase from INR 67 to INR 71 per liter in Q2 • Expected stabilization by December with new harvest • GST Reduction: • Molasses GST reduced from 28% to 5%, potential benefits in Maharashtra and Karnataka • Brandy Market Insights: • 85 million cases in FY'23, P&A brands hold 34% market share • Fastest-growing segment in IMFL category
Regional Performance and Challenges • Volume Growth: Similar growth across key states • Working Capital Increase: Due to rising excise duties and longer receivables cycle • Future Outlook: Optimism for growth through marketing and brand activations
Analyst Inquiries • Sustainability of Demand: Minimal growth noted; price differences between states are marginal • North-East Performance: Early success in Sikkim; new premium brandy launch planned for Q3 FY 2024 • Market Share and Capital Needs: • Flandy brandy achieved 5% market share in its first year • Plans to reduce pledged promoter shares to zero within the financial year
Management and Strategy • Management Enhancements: Improved management bandwidth and competitive compensation packages • Focus on Brandy: Significant segment in southern India; potential for premiumization • Future Projections: EBITDA margins projected at 13% to 14% for FY '24
Closing Remarks • Company's Focus: Continued growth in brandy portfolio • Positive Outlook: Strong balance sheet and optimistic future results
Tilaknagar Industries Limited Q1 FY24 Earnings Conference Call Summary
Submission and Compliance • Date of submission: August 14, 2023 • Compliance with SEBI regulations • Conference call held on August 9, 2023
Key Highlights • Chairman’s Remarks: • Strong growth in brandy sales, especially Mansion House Brandy • 42.4% increase in volumes for Q1 FY24 • Focus on marketing initiatives to enhance brand presence
• Financial Performance: • Net revenue: INR 304 crores (32% YoY growth) • EBITDA: INR 38 crores (77% increase) • Gross debt: INR 239 crores; net debt: INR 136 crores • Refinancing of EARC debt in progress
Market Insights • Brandy Market: • 20% market share (10% including Tamil Nadu) • Consistent growth over five years • Plans to expand into whiskey and vodka
• Raw Material Costs: • Volatility in ENA prices; softening in glass costs • Continued pressure on ENA expected
Regional Performance • State Contributions: • South India accounts for 85% of volumes • Significant markets: Telangana, Karnataka, Kerala, Andhra Pradesh • Underdeveloped market in Tamil Nadu
• Pricing Dynamics: • Recent price hike in Telangana; no immediate changes in Kerala and Karnataka • Achieved 50% margin this quarter
Product Development • New Product Launch: • Flavored brandy "Flandy" launched in Puducherry and Telangana • Positive feedback received
• Premiumization Strategy: • Focus on super premium offerings to drive NSR growth
Financial Management • Debt Management: • Short-term debt primarily consists of current maturities (INR 176 crores due) • Anticipated prepayment of debt due to strong EBITDA
• Working Capital: • Targeting around 43 days for net working capital
Growth Potential • Market Expansion: • Focus on increasing market share across various price points • Initial efforts to penetrate Northeast and North India
• Advertising and Promotion: • Increased spending anticipated as the company shifts to growth mode
Future Outlook • Addressable Market: • Approximately 40-45 million cases, growing at a low double-digit rate • Expected debt levels to drop below INR 100 crores this financial year
• Volume and Margin Targets: • Mid-teen volume growth projected for FY24 • Margin targets of 13-14% for FY24
• Capital Expenditure: • Normal capex around INR 25 crores for FY24 • Exploring export opportunities, particularly in Africa and the Middle East
Conclusion • The call concluded with management expressing optimism for future growth and thanking participants for their engagement.