Based on recent checks at stores across North India during my travel over the last one month, updating my previous expectation mentioned here
I now expect Indri sales to be 180k - 200k cases - recording a growth of between 80-100% YoY for FY25
I now expect Piccadily Agro FY25 PAT to be ~200cr - recording a growth of around ~80% YoY for FY25
Camikara is gaining traction. By FY25 end, I expect the entire distribution network to have been tapped. And from next financial year onwards, the company starts pushing hard the sales of Camikara - I expect Camikara sales to be breach the 100k cases per year sales mark in FY26. Expect a big sales/marketing drive from Holi till the end of summer positioning Camikara as the cocktail spirit.
Also, I think at least one new product will be introduced in FY26 - could be a vodka or a gin.
Not to sound too pessimistic… but even a PAT of 160cr looks high. TTM PAT is 125Cr, which also includes 29Cr extraordinary profit from sale of land (in Q3FY24), so somewhere around 140cr (translates to 50-55Cr for next two quarters) for FY24 should be fine.
Views on quarterly results?
Revenue from Distillery increased by 15% y-o-y.
Do anyone else feel results are subdued considering this quarter should be best due to festive and wedding season?
PBT before exceptional items at Rs 36.2crs up 32% YoY. Market is ignoring the Rs29 crs exceptional item in last year’s numbers and having a knee jerk reaction. Results are good.
Against a 7% increase in total revenues, the gross profits increased by 31%.
Distillery segment was the sole positive contributor to company profitability. The segment revenue increased by 18%, gross margins improved from 64% to 72% indicating better realizations, and profit increased by 37%.
Indri sales vol. grew by 43% (converging with single malt industry growth of ~30%)
Premium alco bev volumes grew 50%+ (Camikara ramping up from a low base?)
This is showing up in rising EBIT margins (~29% in Q3) of the broader distillery segment, which are up from 25% in Q2FY25 and 24% in Q3FY24
In all likelihood, Indri will end the year at ~300 Cr. of sales and EBIT of 100-120 Cr. (assuming 33-40% margins)
Overall, the story is shaping up well… need to see if there is unserved export demand that’ll be fulfilled via the capex that comes onto steam in FY26.
Assuming FY26 is another 30-40% growth on the EBIT of distillery segment, we will have the following scenarios. Overall, the stock can still give 50-60% in next year if the multiples converge a little and margins are beyond my expectation (likely with lux portfolio)
30%
35%
40%
Distillery Segment
9MFY25
FY25E
FY26E
FY26E
FY26E
Sales
488
688
894
929
963
EBIT
127
182
250
279
308
Margins
26.0%
26.4%
28%
30%
32%
Valuation
7030
7030
7030
7030
7030
EBIT multiple
55.4
38.7
28.1
25.2
22.8
Radico
Diageo
EBIT TTM
491
2001
Mcap
30682
105444
Multiple
62.5
52.7
Note: I’ve assumed another 5% LC on the stock tomorrow and computed the valuation accordingly. I’m guessing the stock will now settle at around 690 where mcap would be around ~6300 Crs
i think they are maxxed out and only selling Indri at higher prices, which are driving margin. it’s safe assumption now that next quarter will/should be similar to Q3 as well.
No. Wrong assumption . Q4 last year had no exceptional items like Q3 . So even similar sales should result in near to 5 rupee EPS next Quarter.
And where did you get the price hike idea ? It sales at same prices in Kolkata atleast as last year . Also , volume cant be same as this year they are selling in the military paramiltary canteens which they did not do last year .
Q4FY24 had sugar business contributing 100 cr, whereas distillery revenues are 185-205 cr. Since profits are going up but topline for distillery remaining the same, it can only come from product mix and higher prices of Indri like diwali edition etc.
Not necessary, the country liquor segment can simply degrow and revenue shortfall can be made up by Indri, which continues to go bigger. Doesn’t have to be a price hike on Indri.
If you compare Q2 and Q3 of this year, something similar might have happened… overall sales on a QoQ basis are flat, yet the QoQ EBIT growth is around 15-20% - has to be because of higher Indri & Camikara sales & maybe degrowth of the mass segment.
Q4 is likely to be higher than Q3, the extent of growth is the only question. If they do 200-220 Cr. and around ~70 Cr of EBIT, their full-year EBIT for the distillery segment will be around 200 Cr - pretty good I would say.
Though, I do think that scale up from here on depends on new product launches and their success. It’s been 1+ year without any product launch and maybe something might come up in next few quarters.
Unrelated, but here is what Radico says about the lux segment:-
Total sales of lux portfolio for Radico: 250 Cr. in 9MFY25; Target to do 500 Cr. + in FY26.
Piccadily’s distillery sales are 488 Cr. in 9MFY25 and I think it should be a safe bet to say that around 50% or around 244 Cr is from Indri + Camikara alone.
Says a lot about the inherent strength of Indri & the segment in general.
