Associated Alcohols & Breweries Ltd.: overview
Associated Alcohols & Breweries Ltd (BSE: 507526; NSE: ASALCBR; Market Cap: INR 1599 Cr) reported revenue growth of 5.3% YoY to INR 2,809 Mn. EBITDA stood at INR 299 Mn with EBITDA Margins of 11%. PAT came in at INR 178 Cr with PAT margins of INR 6%. IMFL (P) brands continued to stand out, with revenue growing 58% YoY to INR 652 Cr, while volumes increased 40% YoY to 0.7 Mn cases.
Management had guided for ~30% volume growth in FY27, but the business has started the year well ahead of that target, delivering nearly 40% volume growth along with an impressive 58% increase in revenue in Q1FY27. Realizations improved by 13%, driven by strong consumer acceptance of AABL's premium product portfolio.
Guidance: Targeting 25–30% CAGR revenue growth in the IMFL Proprietary segment over the next 4–5 years
In Q1 FY27, IMFL proprietary contributed 23% of company's overall revenue, compared to 16% in Q1FY26, reflecting the increasing contribution towards higher-margin proprietary portfolio. AABL continues to invest in consumer engagement initiatives, on-ground activations, and strengthening its sales and marketing manpower.
A major contributor to this growth has been the Central Province (CP) portfolio, which is rapidly emerging as the company's flagship brand. The portfolio, comprising CP Whisky, CP Rum, CP Vodka and CP Orange Vodka, recorded an exceptional 260% YoY increase in volumes and has already established a strong position in Madhya Pradesh.
Nicobar Gin and HillFort Whisky are still relatively small contributor, selling ~6,000–8,400 cases and 12,000–18,000 cases p.a respectively. Both these brands are steadily gaining consumer acceptance across newer markets as the company continues to strengthen their branding and market positioning.
The next phase of growth is expected to be driven by an aggressive product pipeline. Kultur, the company's ready-to-drink (RTD) offering, has already been launched in Madhya Pradesh and is currently undergoing registration across 8 additional states ahead of the festive season.
Kultur enables AABL to participate in one of the fastest-growing categories within the alco-bev industry. At the same time, the company remains on track to launch premium Tequila and Brandy in Q2FY27, while the ongoing maturation of malt supports the planned commercial launch of a super-premium Single Malt whisky in FY28. Collectively, these launches reinforce AABL's long term strategy and enhance the breadth of its product portfolio.
Expansion into New States
Maharashtra expansion remains calibrated, with an initial focus on Mumbai, Thane, Pune and Nagpur. Maharashtra being highly capital-intensive, AABL is prioritising sustainable, phased expansion while witnessing encouraging month-on-month demand growth.
Entered Odisha during Q1FY27 and is progressing towards entry into Karnataka and Andhra Pradesh, as part of its strategy to expand the IMFL (P) footprint beyond its core markets.
New markets typically take 2–3 years to stabilise, Delhi and Chhattisgarh are gaining traction and expected to drive medium-term growth.
Update on SDF Industries
Currently, bottling in Keralam is carried out by third-party. Plans to begin transitioning operations to the SDF facility in a phased manner, with one unit expected to be shifted by December 2026.
Full-scale operations from SDF are targeted to commence from April 2027.
Once the SDF facility becomes fully operational, it will improved operational efficiencies and greater flexibility to introduce smaller SKUs that were previously not economically viable.
IMFL Licensed Business
Licensed IMFL volumes witnessed a decline due to the transition from business agreement with Inbrew from licensing to contract manufacturing.
Licensed volumes expected to stabilise at ~1 Mn cases annually.
Licensing business for Diageo has remained almost flat. Celebration Rum witnessed a sequential volume decline due to its seasonal nature, coupled with a slight industry-wide decline in the category.
ENA & Ethanol Business Update
ENA business delivered healthy volume growth of 35% YoY to 7.3 Mn litres, with revenue increasing 25% YoY. However, margins remained under pressure due to lower realisations.
Ethanol performance remained impacted by industry-wide oversupply and lower quota allocation, resulting in subdued realisations.
Average realization from annual tenders, was ~INR 64/litre, with mix of FCI rice and maize. Ethanol realization to private players stood at INR 52–54/litre. Ethanol business requires a realization of ~ INR 57–60/litre to achieve breakeven.
Expects to improve from better quota allocation and participation in upcoming OMC tenders from October.
Outlook: AABL remains focused on scaling its IMFL proprietary portfolio, targeting ~30% volume growth in FY27, supported by strong momentum in existing brands, new product launches and expansion into newer markets. IMIL business to remain a stable and consistent contributor, supported by steady demand. Ethanol profitability is expected to stabilise as industry conditions normalise. AT CMP, stock trades at 18x PE on TTM basis relatively lower than its 5 year Avg PE of 21.
Q1FY27 Presentation Financial Results For Management Meeting