Piccadily Agro Industries Ltd

Have exited this counter today - no near term triggers (next 6 mos). I will look to re-enter this closer to Q2 results. Give that the stock is already at 50x TTM PE, there’s limited upside unless earnings go up dramatically (which they will.. in FY27 in my view).

2 luxury products (hopefully one gin) will help with the seasonal business too.

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Radico Khaitan is trading at 94 p/e, Tilaknagar with CG issues trades at 40 tax adjusted. What would be the fair value here?

Investor Presentation is up

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Part of the capacity addition I was looking for, this can play out as a short-term trigger for growth if there are no delays in Commissioning/Statutory approvals. To thrive, they will eventually have to evolve into a brand with products catering to all different classes, and this increase in capacity might also open doors to newer products. Although the future looks hazy and lack of con-calls makes it even worse, this trigger might give an opportunity to exit right for the ones looking to.

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At a very high level, I want to understand what is hampering high growth in revenues and profits given

  1. A premium brand that has won awards and made waves internationally
  2. Strong demand(anecdotal)

Toh phir problem kya hai? Scratching my head on this one.

PS: I was very disappointed by the numbers. Trimmed my stake.

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As a investor only interested in IMFL business. Going to be huge positive for piccadily i think
from inv presentation " EVALUATE OPTIONS FOR SUGAR BUSINESS INCLUDING DIVESTMENT/DEMERGER".

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As per the investor presentation, malt distillery/barrel maturation started in 2010. In 2022, they released a 12 year aged rum. So, they started aging the rum, as soon as they started? And only if they keet adding new barrels every year since then can they continuously supply these 12 year olds, right? Is there so much inventory? Then there is the 8 year old and now the 3 year old. Most probably they will have very less 12/8 year olds and a lot of low value 3 year olds going forward.
Anyways, my guess is that the sales growth has peaked due to insufficient raw materials/barrels of aged liquor. A lot of capacity addition happened in last 2 fiscals, which means, it will take a lot of time before those batches will be ready for sale.

Sold most of my holding and now just holding a tracking position.

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Piccadily launches Cashmir, Small-Batch Luxury vodka made with heritage organic Indian winter wheat and Kashmir water, expanding premium spirits portfolio.
1cf78caf-c2d2-46c0-9ab0-f3dd1189f1e8.pdf (1.6 MB)

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Compelled to revisit some of my thesis here after the investor presentation said IMFL margins are higher.

Margins will further expand in the distillery segment as the share of IMFL goes up and hence for the overall co.

I did a scenario analysis of what the margins could be for IMFL and other distillery segments:-

Segment Revenue Scenario 1 Scenario 2 Scenario 3 Scenario 4
IMFL 380 45% 35% 38% 40%
Other Distillery 257 8% 23% 19% 16%
637 30.2% 30.2% 30.2% 30.2%
IMFL EBIT 171 133 144 152
Other Distillery EBIT 21 59 48 40
Total 192 192 192 192

To my mind, somewhere between scenario 3 and 4 is where the story lies..

Future projections basis 25% growth assumption for IMFL only
Margins for each segment taken as average of scenario 3 and scenario 4
Stagnant revenues assumed for other distillery products

IMFL CAGR Growth (Assumption) 25%
Revenues FY26 FY27 FY28
IMFL 475 594 742
Other Distillery 257 257 257
Total Revenues 732 851 999
EBIT FY26 FY27 FY28
IMFL 185 232 289
Other Distillery 44 44 44
Total EBIT 229 276 334
EBIT Multiple 33 33 33
Valuation 7,571 9,099 11,010

Key assumption here is that other distillery segment remains stagnant when we all know that won’t happen.

Also, please note the numbers are super super conservative. The distribution for Piccadily has expanded drastically. Critical whisky and rum markets have only been penetrated in Q4FY25. See below

Q1FY25 Q2FY25 Q3FY25 Q4FY25 Notes
Countries 25 25 28 28 Spain & Malaysia - critical markets added in Q3
States 20 21 23 28 Key southern markets added in Q4 i.e. Andhra, TN and Kerala
India Duty Free 8 11 15 16
International Duty Free 6 7 9 11

Radico and USL, both trade at 60-65 times EBIT at present.

Did some sensitivity analysis too:-

Y axis - exit EBIT multiple for FY28
X axis - YoY Growth rates for IMFL segment

Scenario Analysis 25% 26% 27% 28% 29% 30%
38 12,678 12,944 13,214 13,489 13,768 14,051
40 13,345 13,625 13,910 14,199 14,493 14,791
42 14,012 14,306 14,605 14,909 15,217 15,530
44 14,680 14,988 15,301 15,619 15,942 16,270
46 15,347 15,669 15,996 16,329 16,666 17,009
48 16,014 16,350 16,692 17,039 17,391 17,749
50 16,681 17,031 17,387 17,749 18,116 18,488

Parts in bold is the likely outcome come FY28. Key triggers - new products, rising supply (barrels, malts, etc.)

This is my thesis on this stock.. happy to listen to counters.

Btw the discounted EBIT multiple takes care of sugar business as part of the overall co. If demerger etc happens, multiple could rerate further.

EDIT - will look to add this again in coming weeks. It’s at a good entry point at present.

Also I’m surprised as to how so few people have appreciated the fact that Piccadily has the vision to gain expertise and just be part of the ecosystem in Scotland via its distillery there. This is far ahead of competition and they will reap fruits of it in next 5-10 years.

The co does have all the potential to be the flagbearer of Indian spirits industry.

Will revisit these assumptions in Q1FY26 since I expect it to be bumper given geographical expansion in critical south markets

12 Likes

Piccadily Agro Industries Limited’s investor presentation for the year ended March 31, 2025, showcases significant growth and a strategic shift towards premium spirits, marking a compelling outlook for investors.

Key Financial Highlights (FY25 vs FY24):

Metric FY25 (₹ Crore) FY24 (₹ Crore) Growth (%)
Total Income 893 829.4 7.7%
Revenue from Operations 886.3 828.3 7.0%
EBITDA 191 152.3 25.4%
EBITDA Margin 21.4% 18.4% +300 bps
PAT (Adjusted) 105 86 22.1%
PAT Margin 11.7% 10.3% +140 bps
EPS 11.08 9.09 21.9%

Segment-wise Revenue and EBITDA:

Segment FY25 Revenue (₹ Crore) FY24 Revenue (₹ Crore) Growth (%) FY25 EBITDA (₹ Crore) FY24 EBITDA (₹ Crore) Growth (%)
Distillery 636.8 552.8 15.2% 194 148.4 30.7%
Sugar 249.5 275.5 -9.4% (3.2) 3.9 -182.1%

Strategic Business Evolution and Highlights:

Piccadily Agro Industries is actively transforming its revenue profile, moving away from bulk commodity-based sales to focusing on branded and premium alcoholic beverages.

Revenue Mix by Product Category:

Product Category FY25 Revenue Contribution FY24 Revenue Contribution
Distillery 71.9% 66.8%
IMFL 42.9% 32.9%

Key Achievements in FY25:

  • Volume Growth of Key Brands (YoY):
Brand Growth (%)
Indri >37%
Whistler 54%
Camikara 310%
Total IMFL 46%
  • Market Share & Recognition: Indri captured an estimated 55% share of the Indian Single Malt export market and has earned over 50 prestigious accolades globally, including ‘World’s Best Whisky’.

  • New Product Launches: Introduced several new expressions, including Indri Game of Thrones, Indri City Series Edition, Indri Diwali Collectors Edition 2024, Indri Founders Reserve 11 YO, Camikara 3 YO, and Camikara mixers.

  • Enhanced Distribution: Expanded presence to 28 states and Union Territories (including CSD) from 20 in FY24, and increased retail stores to over 16,000 in India (including on-trade) from 6,700 in FY24. International reach expanded to 28 countries (vs 22) and duty-free presence grew significantly.

  • Infrastructure & Innovation: Maturation capacity enhanced with the number of barrels reaching 75,000 (from 45,000 in FY24). Launched the Indri Experience Centre, offering tours and tastings, and implemented SAP for operational control.

  • Talent Acquisition: Strengthened the management team with the appointment of Mr. Rakesh Vashisht as Head of Sales (42+ years experience) and Mr. Natwar Agarwal as CFO (24+ years experience).

  • Combatting Counterfeiting: Became the first Indian Alco-bev company to adopt NFC technology to combat counterfeiting, ensuring product authenticity and consumer trust.

  • Promotional Activities: Conducted the Camikara Millionaire Bartenders’ Challenge with a winner prize of ₹1 million, aligning with on-trade channel engagement strategy.

Future Outlook and Expansion Plans:

The company is well- poised for future growth with ongoing expansions:

Project Location Capacity Expansion (Distillery) Expected Commissioning Notes
Indri, Haryana 78 KLPD to 220 KLPD for ENA; 12 KLPD to 30 KLPD for Malt H1 FY26 Barrel storage capacity also scaling up from 45,000 to 100,000 barrels.
Mahasamund, Chhattisgarh New 210 KLPD distillery for ENA and Ethanol H2 FY26
Portavadie, Scotland New Malt distillery (evaluation ongoing) FY27 Marks a global expansion, providing access to international single malt expertise and channels.

Piccadily Agro Industries is committed to driving premiumization in the Indian and international spirits landscape, supported by robust financial performance, strategic expansions, and a focus on quality and innovation.

For more details, you can refer to the full investor presentation. https://www.bseindia.com/xml-data/corpfiling/AttachHis/f0d4fba6-704d-46e7-8f23-5f95fc3dd357.pdf

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The concerning thing is revenue from Distillery Vertical fell during the Q4 on YoY basis also. I think it is due to lower sale and realisation in Ethanol and ENA segment. I am speculating this only, no such disclosure/bifurcation is given. I am personally invested as there are other growth triggers also incl Capacity Expansion and introduction of new brands in different categories.

Would love to hear other’s opinion on this.

I noticed most of the sugar companies reported good growth in PAT, whereas here the Sugar business is in negative. Can anyone throw some light on this if aware.

Worth noting that company is not even considering worth clarifying on this. Hopefully the divestment happens soon.

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There is clear info available in the PPT they shared .The reduction is due to stopping of selling of malt to other breweries .

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I don’t think it is due to stoppage of B2B Malt Selling, it was already a small segment in other distillery segment. Most of the contribution in that segment comes from Ethanol, ENA and IMIL Segment.
They may have also stocked Ethanol and ENA for this quarter like Associated Alcohols. There is a good increase in Inventory level also.

I think if it is anything other than slowdown in flagship IMFL brands, the stock is worth looking.

https://www.bseindia.com/xml-data/corpfiling/AttachLive/1a4f0065-77df-4106-b679-c3ba3b5af0cd.pdf

Good analysis. Have been tracking this company for quite some time and finally added few shares today.
What stands out for me is the ability to create brands with strong legacy around them. Seems the promoters have the knack & desire to create niche but exclusive products. Other than INDRI ,they are able to churn out a differentiated offering (CASHMIR Vodka looks interesting) which will help them charge premium.
Secondly, supply constrains in INDRI (production ramp up in progress) have ensured that demand for it remains high all the time. Any new variant launched gets consumed/sold out with in days which proves that product been able to generate brand loyalty.
Launch of INDRI experience center is another step that proves that management is thinking innovatively.

Other than this portfolio shift to IMFL & demerger of sugar business should help in attaining higher valuation multiple.

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The price range of 750 (i think 7500 is a typo) to 1500 is quite interesting. And they’re aiming to target 1mn cases for it in next 3 years. Interesting developments in this counter.

I have high expectations from this year’s annual report - it should be more on the lines of their investor presentation and not just simple text

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As per presentation 3 new products are expected to be launched this year. Cashmir Vodka is already announced. Just saw a teaser for new Whisky on Linkedin

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Seems they have already named it Agneya (Agni for Fire). May be more smoky kind of Whiskey for whiskey enthusiast on Smoky side.

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All the Warrants converted at 744 rs. This shows the good confidence on the company. Hopefully this starts delivering some good momentum to the stock. Next leg is Sep where it is more fund raise will happen though ccds and expansion hopefully is completed by then.

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