Allied Blenders and Distillers reported a record 10 million cases in Q2 FY27, boosting revenue to ₹1,152 crore. However, profit margins slipped to 12.4% due to supply chain costs and brand investments. Investors are watching rising debt levels as the company pursues major expansion projects.
Allied Blenders and Distillers (ABD) hit a key operational milestone in the July-September quarter of FY27, selling 10 million cases for the first time. This represents an 11.1% increase compared to the same period last year. The strong volume growth helped push the company’s total revenue from operations up by 15.8% to ₹1,152 crore, driven largely by the popularity of its core brands, including ICONiQ White, which saw a volume surge of 20.6%.
Despite the strong sales, profitability has come under pressure. The company’s EBITDA margin dropped to 12.4%, compared to 13.1% in the same quarter last year. ABD management explained that this decline was caused by costs linked to revamping its main brands and launching its new super-premium portfolio, 'ABD Maestro.' Additionally, the company faced a ₹29 crore financial hit from supply chain disruptions in West Asia. If these one-time costs are set aside, the company noted that margins would have been higher at 14.9%.
The company’s financial position shows a rise in borrowing as it expands. Net debt increased by ₹292 crore during the first half of the year, bringing the total to ₹1,273 crore. This increase is largely tied to ₹351 crore in capital spending on expansion projects. The company is investing in backward integration to strengthen its supply chain, which includes a new bottling unit in Moradabad and a malt distillery in Rangapur. As a result, the current Net Debt/EBITDA ratio has reached 2.2x, which is currently above the company’s stated goal of keeping this ratio below 2.0x.
On the positive side, India Ratings & Research recently upgraded the company’s credit rating to IND AA-, signaling improved confidence in its long-term financial health. The management team expects that the newly commissioned infrastructure will eventually help improve profit margins by 300 basis points by FY28.
Moving forward, the primary monitorable for investors will be the company’s ability to execute these new projects and translate them into improved profitability. Shareholders may also track whether the company can successfully bring its debt ratio back under the 2.0x target and if the new super-premium portfolio can sustain demand to offset the heavy brand investment costs.