This article first appeared on GuruFocus .
Release Date: November 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Allied Blenders and Distillers Ltd ( NSE:ABDL ) reported a 14.4% increase in consolidated income from operations, reaching INR 995 crores in Q2 FY26.
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The company's EBITDA grew by 23.6% year-on-year, with an improved margin of 13.1%.
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The flagship brand, Officer's Choice, gained incremental market share and continues to lead the mass segment in India.
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The Prestige and Above (PNA) category maintained growth momentum with an 8.3% increase versus Q1 FY26 and a 28.8% year-on-year volume increase.
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The company has expanded its international presence from 14 to 30 countries in 18 months, highlighting the success of its high-margin export model.
Negative Points
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The mass premium category witnessed a 5% growth decline due to regulatory intervention in one of the southern states, impacting short-term pipeline.
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The company faces challenges from state-level regulatory changes and the rise of local brands in certain regions.
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The increase in net debt by INR 127 crores is primarily due to CapEx investments.
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The average cost of borrowing remains high, although it has reduced by 140 basis points to 8.2% in H1 FY26.
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The company is still awaiting the clearance of overdue payments from the Telangana government, with total dues close to INR 700 crores.
Q & A Highlights
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Q: What are the advantages of your new PET bottle manufacturing facility, and how does it compare to third-party suppliers? A: The PET manufacturing facility, with an investment of INR115 crore, is expected to add roughly INR30 crore to our gross margins, translating into about 75 basis points on current year volume. Unlike glass bottle manufacturing, PET manufacturing is decentralized, allowing us to achieve economies of scale. This facility will primarily serve Telangana and adjoining states, which account for 65% of our PET consumption. (Respondent: Executive Deputy Chairman)
Q: Can you elaborate on the growth and market share dynamics in the super premium and luxury segments? A: Indian consumers are increasingly open to Indian brands, which has removed a significant barrier. Continuous product development is crucial in the luxury segment. For example, our Zoya Gin has seen 30% of its volume from flavor extensions. We are also expanding internationally, with a focus on markets like the UAE and travel retail. (Respondent: Managing Director)
Q: What is the current status of the Telangana market, and how do you see it evolving? A: The Telangana market is expected to normalize by December as new retail licenses are issued. The pipeline correction should largely resolve by then. We are also in discussions with the government regarding overdue payments, and we received over INR100 crore in October. (Respondent: Chief Financial Officer)
Q: How is the international expansion progressing, and what are your targets? A: We have expanded from 17 to 30 countries, focusing on Africa, North America, and Europe. Our international revenue currently accounts for 8% of our top-line, and we aim to increase this to 12-15% as we roll out our ABDM portfolio. We are targeting a million-case business in Africa by FY28. (Respondent: Managing Director)
Q: What are your plans for the single malt distillery, and when can we expect a launch? A: The single malt distillery in Telangana will start production in Q4 FY26. We plan to launch our single malt in 2029, focusing on authenticity and leveraging the local environment and resources. We are also building our global distribution network in anticipation of this launch. (Respondent: Executive Deputy Chairman)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
