Allied Blenders and Distillers: Luxury Brands and Global Push to Drive H2 Growth

Allied Blenders and Distillers (ABD), a prominent Indian spirits manufacturer, is gearing up for a significant expansion in its luxury portfolio during the second half of the fiscal year (October to March). This period is projected to be critical for the company's sales volumes and overall revenue.

Managing Director Alok Gupta announced plans to introduce three new brands in the luxury segment, complementing its existing six premium brands. These new additions, including white spirits and whiskies, are expected to enhance the company's complete portfolio. ABD forecasts a 10% increase in sales volume and mid-double-digit growth in value sales for the latter half of the year.

The company anticipates further improvements in its profit margins. This is attributed to strategic backward integration initiatives and a strong focus on premiumisation, which aims to increase the market share of higher-value products. Gupta noted that even a 1% volume contribution from the luxury portfolio could lead to an eight-fold impact on net sales value.

Allied Blenders and Distillers is also actively expanding its international presence. It currently exports to 30 countries and plans to reach 35 countries by the end of the current fiscal year, solidifying its position as a leading Indian exporter in the spirits sector.

In a significant long-term investment, ABD is developing India's first single malt distillery at its facility in Telangana, with production expected to commence by 2029.

The company, which listed on stock exchanges in July 2024, reported Rs 3,541 crores in income from operations for FY25. For the September quarter of FY26, its revenue from operations was Rs 1,952.59 crore, a slight decrease of 3.7%. The first half's consolidated total income stood at Rs 3,740.81 crore.

Impact

This strategic push into the luxury segment and global markets is expected to drive revenue growth, improve profitability through higher-margin products, and enhance ABD's brand equity. The company aims to capture a significant share of the growing luxury spirits market in India.

Impact Rating: 7/10

Difficult Terms:

• Luxury portfolio: A collection of high-end, premium-priced products or brands.
• Volume sales: Sales measured by the quantity of goods sold.
• Value sales: Sales measured by the monetary worth of goods sold.
• Premiumisation: The strategy of shifting consumer preference towards more expensive, higher-quality, or premium versions of products.
• Margins: The difference between the revenue received and the costs of producing or selling a product, indicating profitability.
• Backward integration: A strategy where a company gains control over its suppliers or raw materials to reduce costs and improve efficiency.
• Fiscal year: A 12-month period for accounting and financial reporting, which may not coincide with the calendar year.
• Consolidated total income: The combined income of a parent company and its subsidiaries.
• Single malt distillery: A facility that produces whisky from malted barley at a single distillery.