Associated Alcohols & Breweries Limited ($507526)

Ladies and gentlemen, good day, and welcome to the Associated alcohols and Breweries Limited Quarter 4 and FY '26 Earnings Conference Call hosted by GoIndia Advisors. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Riddhi Shah from Go Advisors. Thank you, and over to you, ma'am.

Thanks, good evening, everyone. It's my pleasure to welcome you on behalf of Associated Alcohols & Breweries Limited. Thank you for joining us today for quarter 4 and FY '26 earnings call. We have with us Mr. Anshuman Kedia, Wholetime Director and CEO; Mr. Tushar Bandari, Wholetime Director; and Mr. Dilip Kumar Inani, Chief Financial Officer. Please note that today's discussion may include certain forward-looking statements, and therefore, they must be viewed in conjunction with the risks that the company faces. I will now like to hand it over to the management for opening remarks. Thank you, and over to you, sir.

Thank you, Riddhi. Good afternoon, everyone, and thank you for joining us on the Associated Alcohol & Breweries Limited Q4 and FY '26 Earnings Conference Call. FY '26 has been a year of meaningful progress for ABL marked by disciplined execution, strategic expansion, continued investment in backward integration and sustained focus on scaling our IMFL proprietary portfolio. During the year, ABS sharpened its strategic focus towards building and strengthening its own brands and took meaningful strides towards establishing itself as an emerging Alcoa offering complete basket of portfolio at different Alcoa player offering a complete basket of portfolio at different price points. This is clearly reflected in a strong performance of our proprietary MSL business. which recorded 32% year-on-year volume growth in FY '26 [indiscernible] growth potential markets as trades and Orissa. Simultaneously, we have solidified our presence in our core markets such as NB and [indiscernible] . I'm happy to share that we have gained 1.5% market share in Kerala, making us the third biggest private payer in Kerala. Further, to fortify our presence in the state of Kerala on 16th April 2026, we had announced the acquisition of SBF Industries Limited, a distillery come bottling unit. This acquisition is expected to enhance our operational efficiencies, strengthen in-house bottling capabilities and further reinforce our market presence in the state. The year gone by also saw some realignment of business relationships. Let me begin by acknowledging that FY '26 witnessed a conscious realignment of our [indiscernible] business transitioning from an IMFL licensing agreement through a contract manufacturing model. As you may have noticed in our results, the overall top line growth remained flattish, largely impacted by this transition. That said, our focus remains towards strengthening the core business of IMFL proprietary brands portfolio. We continue to strengthen our manufacturing ecosystem and deepen our backward integration capabilities. Further, we enhanced our EMA capacity utilization through improved operational efficiencies, details of which will be discussed further by Mr. Dilip Inani. Alongside our strong ENA and ethanol capacities we commissioned a 6,000 LPD mall facility, a significant milestone that further enhances our in-house capabilities and strengthens our whiskey portfolio. With plans to launch our own single mode within the next 18 months, this investment reflects our focus on building greater control over quality, consistency in craft mention. We are steadily building a portfolio that caters to evolving consumer preferences across categories, whether it is whiskey, vodka, gin, rum, RTD or in the premium mold offerings. Our objective for the next 2 years is to focus on volume growth, developing market capabilities and launching of our new products. Step by step, we are building a stronger and more future-ready product portfolio position to capture the long-term premiumization opportunity in India. I would like to now hand over the call to Mr. Tushar Bhandari, our Board time Director, who will take you through our brands of operations and strategic initiatives.

Thank you, Anshuman. Let me brief you on performance of our product profile. During the fourth quarter, our priority MSL portfolio has delivered 37% Y-o-Y volume growth, supported by from execution and improving consumer traction across categories. particularly our center-driven portfolio, spanning whiskey, ramp and Vodka continued to perform exceptionally well across key markets registered a robust growth of nearly 28% Y-on-Y reinforcing the strength of our brand portfolio. One of the most notable success has been the strong market response of Orange CP Wacka in Mediaset. Within this 6 months of launch, the brand has garnered a market share of nearly 25% within the stay in its category. Our long-term vision remains firmly focused on scaling our proprietary [indiscernible] meter business. with the objective of increasing its contribution to nearly 50% of our overall top line over the next 4 to 5 years. We believe this growth will be driven through a balanced expansion across our popular and premium and above segment. We are already witnessing healthy volume momentum in our popular segment, alongside encouraging consumer response to a prestige and apart across the market where they have been introduced. We have soft launched our RTD product culture in [ Majipadesh, ] while both Brandy and Takeda are started for launch during FY '27. Although the Kapila launch has witnessed a slight delay due to shipment related issues, our endeavor is to launch both these products by H1 FY tag. As we look ahead, our strategic priority remains centered and escalated the scale-up of our proprietary ample business. We are currently present across states and continue to pursue geographic expansion in line with this vision, we are targeting to enter [indiscernible] and a I will now hand over the call to our CFO, Mr. Inani, for a detailed review of the financial and operational performance for Q4 FY '26

Thank you, Tushar and good afternoon, everybody. I will focus now on the operational and financial performance for the quarter 4 and FY '26. Talking about financial highlights, Net revenue for Q4 FY '26 came at INR 239 crores. EBITDA grew by 13% year-on-year basis to INR 40 crores driven by operational efficiency, we are able to expand our EBITDA margin by 200 basis points year-on-year basis to 17%. Paid increased by 5% year-on-year basis INR INR 24 crores with paid margin of 10%. Now moving on to the segmental performance for Q4 FY '26 our proprietary MFL portfolio remained the key growth driver during the quarter. We registered a strong volume growth of 37% year-on-year to 6.6 lakh cases while revenue grew by 38% to INR 50 crores. We reported highest quarterly EBITDA margin of 22% and IMFL Honda. Now regarding volume stood at 9.8 leases for Q4 FY '26, while revenue increased by 7% year-on-year basis, reaching to revenue of INR 62 crores and EBITDA margin stood healthy at 20% in IMS. Now ethanol volumes stood at 4 million liters. It decreased by 35% year-on-year basis. This was largely due to the oversupply of ethanol industry due to excess capacity. And however, we expect an improvement in the volume driven by the proposed changes in the ethanol blending policy due to this geopolitical situation and oil crisis and also, we are also exploring the other than on [indiscernible] And the revenue from ethanol came at INR 24 crore in Q4 FY '26 and EBITDA margin stood at 10%. Lastly, on merchant E&A volume sold 6.9 million liters, up by 129% year-on-year basis, while revenue increased by 1.8% year-on-year to INR 47 crores please. G&A margin stood at 14%. It is noteworthy that we have enhanced our ELA production to 50 million liters from 47 million liters last year. through higher plant efficiencies, streamline operations and minimizing downtime. We remain confident in scaling our proprietary brands improving operational efficiencies, expanding into new markets and strengthening our backward integration capabilities while continuing to build a strong foundation for long-term profitable growth. That concludes my update now, and we can open the floor for question and answer. Thank you.

[Operator Instructions] Our first question comes from the line of [indiscernible] Gogri with Choice Institutional Equities.

Just to reiterate, can you please reiterate what was the reason of the decline in the ethnol business that we have? And what are the opportunities that you are looking at, you said, I think you are looking at other than OME tires. So what are the opportunities that we are looking at?

The main reason of ethanol volume going down was the oversupply of ethanol in India. That's why we got a lesser allocation. But now new opportunities which are coming up is that OMCs, we are also looking at OMCs. And other than OMCs, we are also looking at other private players to sell ethanol to them. And then apart from that, present geopolitical situation, at the prices of crude, government is also considering to increase the ethanol blend from 20%. So if that happens, then the volume would go up and government has considered and the proposal of blending of anywhere above 20% to 25%. So that is pass-through, then the volumes will come back.

it. And any other business, can you comment on the war and the impact on the business that you are you are seeing any consumption drop anything as such.

So because of the wall, the major impact which has come is the increase in the packaging material cost, primarily the fine bottles and paper and aluminum. That is the major impact. And if the petrol price goes up substantially, then it will have a further impact in transportation as well.

When do you see this you see that this impact for H1 '27 or to go further into the full year '27?

It completely depends on the government if they increase substantially the price, then the that will come. But right now, whatever the packaging material impact price was there, has already come. And so we are mitigating this price increase in packaging materials by either doing value engineering or by increasing our EDP wherever we can. So we have gone a step in value engineering. In certain of our popular products, we have removed a [indiscernible] carton to mitigate the cost increase in other packaging materials. So the combination of both, we are taking care of this.

And sir, can you please give us any EBITDA guidance for 2017? So EBITDA guidance for '27?

EBITDA for '27 should be around in the range of 15%.

The next question comes from the line of Rosie Shah with Alchemy Capital.

Am I audible?

Yes.

Yes. Congratulations, good set of numbers. Sir, I had a couple of questions. My first question was on the IMFL proprietary side. You have told that this time your center proven portfolio has done very well. So if you can take us reason wise, how you are seeing taxing in all these set an all the other states that you have entered like Maharashtra, Goa UP. So if you can give a color on that?

So basically, as we are completely committed towards the increase in the sale of our own IMFL portfolio. And we have demonstrated that in our performance also. As you can see that we have grown our portfolio has grown by almost 32% year-on-year. and we expect it to grow around again, 25% to 30% in the coming years also. But still, the major thing we have to look into is the major contribution is coming from our 2 major states, which is [indiscernible] and Kerala. In other states, we are introducing premium products and popular products also. So the next traction we are expecting to come out is from Cactus and from Delhi and [indiscernible] in this year onwards. And apart from that, as you asked about the Maharashtra see, Maharashtra is a very slow-moving market. So 1 has to have a sustainable growth in Maharashtra and increased sales. And Maharashtra, because of this MML policy, we have introduced only premium brands. That is Salford category and above. So in premium brands to develop a brand and get the market acceptability, it's a long-term journey. We are going and part of that journey and our case, the best part is that our volume is increasing month-on-month be it a little bit volume, but we have seen an increase in volume month-on-month basis. So it's a 2 to 3 year journey in the premium brand to get the market share.

Got it, sir. Sir, my next question was on the margins in IMFL proprietary. If we see first time, our margins have been the highest at 22%. And if I recollect during the Q2 conversation that we had Q2 FY '26. You had talked about higher marketing expense that might bring down your margins. So what is your outlook on the margins on IMFL proprietary side?

So margin of IFFL proprietary side would be in the range of somewhere around 15% to 17%. We are targeting that kind of percentage. Yes, definitely, the expense would increase marketing expenses were to increase as and when we aggressively grow our premium portfolio. So we are working on that premium portfolio. And eventually, when the entire portfolio of tequila and other mall single malt also will come our contribution towards our marketing expense would increase to around about 10% because the premium product requires more marketing expenses than the popular brand category.

Got it. So you as per your assumption, this 22% margin can go down to 15% to 17% is why I understanding correct?

Yes. In the initial end as the premium brand sale would increase over the period being the margin contribution would increase.

Sir, my second question was, see, this time, you have given a guidance of 15% for FY '21 as a -- for the whole year? So my question was, sir, if we recollect our November 2022, that is your Q2 FY '23, at that time also, we had seen the same kind of impact where your plus, your PET coal, all the prices has it increased? And at that time, we had a huge margin decline. So what is your outlook on that? How will we achieve this 15% margin?

See, we will achieve a 15% margin by increasing the sale of our popular products and by increasing the sale of our premium products. And as soon as we enter the other markets and the sale increases substantially. So the economies of scale will come because the same want of staff would sell more of the products, and we'll be able to maintain this margin.

Okay. Got it. Sir, if I can squeeze in one more question. This time merchant D&A volumes were very good sequentially and early -- so what has changed in that part of the business?

The merchant DNA would be only we'll sell whatever we are not able to use in our own value-added products. I see -- so that is the thing. But apart from that, we have increased our plant efficiency. And with the game plan, we have been able to increase the output of merger DNA. Right now, whatever the with us selling it outside and our whole aim is to consume it in-house in our own value-added product.

Got it. And sir, this HDF Industries acquisition that they have done, how are we planning to go about in that? How will it benefit us? And I know CapEx, we have talked about INR 70 crores in FY '27for this. So what is our plan for this acquisition?

So CapEx, first of all, CapEx, we have not expected to see INR 70 crores. We have done an acquisition of a core around approximately INR 30 crores. And INR 10 crores CapEx will be done in this unit for upliftment and modernization and automization of the plan. See, this acquisition was very necessary for us because we are one of the third largest private player in the state of Kerala. And our volumes are increasing and our team is performing really well and pushing up the volumes, and increasing the sale of our popular brand portfolio and a premium brand portfolio. So right now, we were doing a bottling tie-up at 3 different units, okay? And there were certain operational challenges with these units were facing and due to which we were not able to increase our production and increase our sales. So that was the major reason of doing this acquisition because until now, we were dependent on somebody. So we wanted to take the entire control and we are planning to completely automize the plant and increase the efficiency there. So one, is that we have stable we will have a stable supply of our own products, one; and second, it will be centrally aligned. So this SDF industry is very strategically located in the central part of Kerala, which is [indiscernible] for across Kerala and it is quite close to 2, 3 major airports. So that is a strategic location. So it will benefit us in increasing our sales will benefit us in increasing our margin and will add a significant contribution. And with that, this we will be a significant local player in the state of Kerala because the opportunity still pursue

The next question comes from the line of Bhagwat with Prosperity Wealth Management.

My question is regarding the can business. You mentioned about that volumes should increase as the government has tax standards for 30% ethanol branding in to. So are we also using retinal production for our practice conviction as well?

I didn't get you. Your question was not clear.

Are we using the [indiscernible] Are you say production for our captive conversion as well?

No, we are not using the old for a captive consumption. It is a stand-alone ethanol unit, which we are selling it to oil marketing companies.

Okay. Understood. So my second question is regarding -- if you could comment on the revenue guidance for current year and next year, please?

We have planned around 10% double-digit growth, 10% plus revenue growth for next year in -- and from 2029, the growth will be increased after launching of single malt whiskey. And it would be around IMFL, which is our main focus core area, will give a 30% plus growth, which is our key focus area. Our main focus area and our driver would be our own IMFL proprietary brands, so which we expect to continue to grow at around 25% to 30%.

Okay. So this 25% to 30% growth we can expect from FY '28 onwards?

FY '27 .

Yes. Okay. You mentioned about 10%. So that I couldn't understand if you could repeat

Overall it would be in double digit, 10% plus. But in IMFL business, we have a 30% plus growth.

Okay. So consolidated level, it's 10%.

Yes.

Okay. And that would be for FY '28 as well?

No. FY '28 will be higher growth because of -- at that time, the single malt [indiscernible] will also come in the picture because after this single ball biscuit started maturing. And this -- the maturity will fall in FY '28 partially and for full year FY '29. So growth will be higher in '28 and '29.

Okay, approximately around 15%, 20%, if you could. [indiscernible] concern at?

Yes, around 15%.

And also increase?

Yes, volume may not be increased because it will be a high-value item. So the value will increase by 15% around from '28 onwards, okay. And so considering that, our EBITDA margin also increased from FY '28 or not as the premium products are increase? Yes, yes. And -- but it will not increase substantially from '28 onwards. It will increase from '29 onwards because initial first year being a single mall product and a very high-value product. There'll be a good amount of marketing and distribution expenses, which will be involved to create a brand because brand awareness and everything will have to do across the markets. So we are preparing ourselves for that. So for that, we have taken steps ahead as we are already present in -- today on 14 states, and we are increasing the sales in those states of our popular brand category. And slightly, we are introducing and increasing the sales of a premium category that by that time, our single mall comes in the market, we have already established in almost a major part of the country.

Okay. So we can expect then around 15% of margin in [indiscernible] and the slight margin increase from FY '19 numbers. Is that right understanding?

Yes. Absolutely.

The next question comes from the line of Karan Kamdar with Choice Institutional Equities.

A couple of questions. One on [indiscernible] Can you help us with the status and where are we selling it in which markets what is the product like what is the alcohol percentage like? And second, I was just sharing about single malt very exciting times. A little more update on the mall plant? How is the production line? And are you planning to sell any mode directly? Or are you planning to only use it for our production [indiscernible] you for asking.

I think these 2 -- these 2 are very important questions. And I think everybody is looking forward to these 2 products of us. First of all, in terms with culture, so we have already launched on a top launch in the state of Mandipadesh, okay? We have launched in 5 flavors and with a alcohol percentage of round about 8% with an MRP of INR 130 per can for the 300 mL can, okay? We are launching only in can, and it's more vibrant in colors and more appealing and it's the packaging done -- has got a very good response in the initial phase of launch. In the other states, we have already applied for label registration and approvals. So we expect the labor ratio and approvals to come in the next 1 to 1.5 months in the other states, which we are present in. And we are also excited about this product to see how the response comes from the market. That is on terms of culture, the RTD, which we have launched per se. Second, if you asked in terms of the mall plant. So as Mr. Inani has said that the mall plant, we've already -- the plant is running really well. We are getting the full efficiency of the plant. And we have already started maturing our mold in the barrels. And we've seen a very good result of maturation in these barrels. They're running really well, they're blending above our expectations. The first lot of mall will come in FY '28, okay? So then we will be launching our single malt in FY '28. And then post that, we will be launching a premium single mold also in -- towards the end of FY '28 or first Q1 of [indiscernible] attain certain portion of the mall yet. You actually said a certain portion of the mature bond we will also be selling in the market, and we will be using in our own products like basically in central province and imports. Right now, we are buying more from outside and putting it. So we'll be using in our own products also this [indiscernible] We will say our cost of purchase of mold also because our ore cost is lower than the purchase cost, which is sale from H2 next year.

Got it. That's great to hear, sir. Sir, what is the kind of the peak revenue you would expect from culture over like next 2, 3 years, will peak revenue? How big of a product can pick up and can you sort of help me with one of this product, maybe in some other states, not in Madera, where would I place this product in competition group? Or is it like a completely different product ?

To give a guidance on the revenue, which will come from the culture at this present state is water because see, we expect the RTD would be the next big thing in the Indian market as it's there in the western market. So RTD has picked up recently in the Western markets. and we expect the same culture to follow in here, and there will be a spike in the consumption of RTD. That's what we are targeting, one. Second is if we talk about who would be placed against the competition. So actually, there are very fragmented players. There is no national player per se, in RTD at present apart from [indiscernible] . So [indiscernible] be as is one of the single largest leader in the country right now, which controls almost 80% to 85% market share of the RTD. The advantage, obviously, has been gaining across market as it's present in all the markets. So that's what we are targeting that we will try to target all the markets in which we are present. And that's how -- if there's a wide spread, WD is good, then we will see a greater traction to come in. But one case of RTD, we have priced at around INR 1,300 at the existing trends. That will be our realization.

Got it. Sir, what about the ethanol business. Are we expecting any kind of improvement in production or will it stay at these levels? I think there was a question asked but I sort of got drops, I didn't hear that out. What is your outlook on the ethanol business and why is the production falling there?

The production has fallen because of the low government allocation in terms of ethanol as ethanol production is surplus is more than the demand, which is there. So right now, there is only 20% blending in ehtanol, which is allowed, petroleum, which is allowed. Other political scenario and shortage of pictorial and increase in the crude price. Government is aggressively looking at increasing the alcohol, it's all blending from 20% to either 25% or 22%. So if that comes in place, then definitely our ethanol production would also increase. And plus apart from that, we are also exploring other options than oil marketing comment HPCL, BPCL, we are also looking at private oil manufacturing companies to selling ethanol to utilize the plant fully.

Got it, great. Sir, one last question, if I can squeeze in. On the Kerala market. how do you see your market share evolving? I heard 1.5%, I think, at the start of the call, can we bump it to 5% over a long term or a medium term?

No. So 1.5% is the market share which we have gained last year.

So market share right now?

Yes. Last year, we closed at a market share of 7.3%. We expect to gain the market share in [indiscernible] market.

Got it. And how high can we go before that saturation?

See, our target Kerala is a very big market, which is primarily dominated by the major players. So it's a 2 million case monthly market. that's the kind of market that we're looking at. So this year, we have done around 1.6 million, 1.7 million cases. We are targeting to achieve 2 million cases this year annually. So the market is quite -- there is potential -- there's a lot of potential in the market. But there were certain reasons of manufacturing changes as we are getting in manufactured at other places certain SKUs, which we were not able to provide at the right time. So with this acquisition, definitely, we'll be able to gain a higher market share in the years to come.

The next question comes from the line of Pawan Katariya from Busy.

Yes. So I had one thing because since we are looking for the premium on journey, right? So however, the one area that appears under leverage is the digital visibility -- so particularly on the digital front, we are going for premiumization, right? But the that area is relatively loves. So do you see any plans on improving the brand building and the visibility of the brand?

See, one thing is that we are done is finally looking aggressively at increasing the sale of our entire portfolio and increasing the volume. So we have -- we anticipate to increase our volume by almost IMS volume by almost 25% to 30% on a year-on-year basis. And that would be a combination of popular and a premiumization brand all Yes, as you rightly pointed out, being from the liquor industry, we cannot do extensive advertising. So we'll have to be present only through the meta platforms. So all the products are available on the meta has got an install profile and a Facebook profile. The TP portfolio has almost touched 60,000 followers. So we are seeing a greater traction [indiscernible] Nicobar and Titan. So almost all our products are available on the digital platform. But yes, definitely, we are seeing traction in the increase and the liability of our digital profiles of the products.

Okay. Because then the visibility is if you see other brands like [indiscernible] other brands like the visibility through the meta platforms, right, like instant they are being the aplite marketing, which influences were having 1 million plus followers -- so following all the banks we don't see someone promoting the brand in a [indiscernible]

I absolutely agree or agree or point on, but the company is working towards that direction and creating a base for itself and making a base for itself. Because by around 1, 1.5 years, we will have a product which will be in the price point of [indiscernible] . So we'll have to work towards it from now on. What we are working towards this.

The next question comes from the line of Sumit Agrawal and Individual Investor.

Congratulations on good set of numbers. I have 2 questions. One question is on if you could give some color on the number of cases sold for Nicobar, import and titanium woodcut? Month for month basis, if you can give some kind of color and estimate.

Sir, I can share the details with you. So on an overall basis, if I talk about on the sale of Nicobar so the sale of Nicobar in last entire financial year, we've done around 2,000 cases. And for import, we have done around somewhere around 4,000 cases across the market. Our still portfolio leader in central province CV so which has done a substantial amount of sales and the certain brand portfolio, which is [indiscernible] and others, have got a higher volume. Nicobar and import is likely on the premium category. So it will take time to reach to a substantial amount of volume.

Okay. Perfect. Because it's good to see because I'm based out of Delhi to report now -- poor network now in Delhi, so which is [indiscernible]. My next question was on the -- if you could give some color on the estimated time lines of Tequila launch and where it is -- where the volumes are right now?

So Tequila would be launched in H1 27. To give you the exact status of Tequila, it shifts from Mexico. It got delayed because of this ship and ship trade prices and everything. So it is targeted to be launched in H1 this year.

The next question comes from the line of Sunita an individual investor. Sunita, please go ahead with your question and kindly unmute your line in case if you are on mute. Since there's no response from the participant, we move to the next participant that would be Piyush Jain, an individual investor.

Am I audible?

Yes.

Two questions on this. What I understood, sir, from your opening remarks, you said the IMFL business will become a 50% of the overall business -- is that correct? -- by well?

Our target is that our MSL business should contribute to 50% of the top line. excluding our ethanol revenue contribution. So this is our target in the next 3 to 5 years.

Okay, the 50% is fine. So currently, this MSL is around INR 177 crores for FY '26, correct? This number is correct.

Yes. So sir, 50% means in other business will grow, and this 177 will also grow a significant headroom from year because 50% of the overall liquor business is difficult to get the number.

So how we can see this INR 170 crores, INR 7 crore can become a, let's say, INR 350 crores, INR 400 crores or INR 500 crore number because today, our overall top line crosses [indiscernible] Yes. Sir, can you give any color on this?

Yes. So I will just lie. So this year, it was INR 177 crores, which has grown by approximately 30% -- 30%, 35% as per last year. So if the growth is there at the similar base, which we are anticipating. So same as from INR 127 crores last year, we moved to INR 177 crores this year. So as one is that, that will add the 30% growth will add. Second is the number of states which we are entered into. Out of that, 2 of the major states are major contributors right now. even if 2 or 3 out of the 14 states will be entered contribute to equal or half the volume of what MP and Kerala are doing, then that number would be quite achievable. And apart from that, the premium products, which we will be launching in the next 3 to 4 years, which is Takeda and single malt products and RTD. So these will also contribute substantially to the top line. And our focus is primarily on the entire business portfolio. Our main focus and complete entire focus is on increasing the sale of its own IMFL proprietary brands.

Why this IMFL license business has declined very sharply?

IMFL license plan has declined very sharply as we've also said in our opening remarks that because of the Ingo business, the patterns have changed from franchisee business has moved to job of manufacturing business. So that is the main reason of decline in from IMFL franchisee portfolio.

Okay. Now my second question is on, sir, ethanol because current year on a segmental basis, our ethanol business was a loss-making. So what is your strategy here because around INR 250 crores to INR 260 crores of revenue, whatever we did in this year in ethanol. So we haven't generated any profit or cash flows here. So what is your strategy here going forward?

It is giving a 7% EBITDA on annual basis and in quarter Q4 FY '20, it has given 10% EBITDA. So it is not loss making. Yes, it is not a similar red.

No, no. On an EBIT basis, your segmental repartition which you have given on an EBITDA basis, Q4, it is a INR 6.5 crore loss and full year, it is a INR 2.5 crore loss. So maybe on EBITDA basis, it might be making 7%, 8%, but EBIT basis, the segmental results which we have published, basis at this number is negative. That's why I'm asking what is your strategy here? Because it is dragging overall our ROC and overall margin because even though we did good EBITDA margin during the quarter and year for IMFL business and all our overall EBITDA margin still hover around 13%, 14% only?

We see the main objective here is running the ethanol business. ethanol is not primarily our core business. There was an opportunity which we entered and assuring us economies of scale. That's why we entered into this Unfortunately, there has been an excess demand in the industry -- excess supply in the industry. That's why we did not get enough allocation in a [indiscernible] that's why you would see that the ethanol volume has also reduced that in FY '25, we sold INR 3.4 crore liter in FY '26, we sold 2.9 crore liters. Our strategy going forward is to run the plant efficiently, and apart from OMCs also to give suppliers and all to other private players. And second is that do a right procurement in that. So that is the main strategy. And -- and if the government increases, it's not allocation, then definitely the volumes will go up here.

Is there any fungibility between rather than ethanol, if we can produce DNA and can use as a feedstock for our MSL or single mold?

No, it's all stand-alone unit for. But definitely, we are looking at -- as you rightly said that we are also -- in the future, we are looking at 3 major things. One is volume growth. Second is EBITDA growth; and the third is the ROE increase. And most of it would also would be primary would come from the sale of our own at products, which we are concentrating on.

Because why I'm raising this point, even though sir, our balance sheet is net debt free our margins are improving. But because of ethanol business is not remunerative in current year or something, somewhere or margin and ROC and everything is dragging because of that.

So you cannot -- you can just efficiently run the plant and do the maximum sales. That's what you can do. And it's all -- is a very -- it's a less time involving business. You just have to have the strategy is right in place, which we are doing agressively doing. And we are also trying to increase our production in the eternal business so that the more we sell, we get the more economies of scale and we get a better margin. So that's the only thing which we are concentrating.

Okay. And last question from my side. With respect to this IMFL strategy, can you just elaborate a little more when you are planning to launch? And are you starting with this statewide stage-wise will you start with a few states, then will you gradually increase the stake? And what type of pricing it will be there. It will be like a big premium or premium or high premium, how you will position the brand or the product.

Which brand are you talking about in this?

IMFL, proprietary, which your future launching?

We are already present in around 12 to 14 states. Every state, the purchasing seen is as that every state has got a different economies and different policies altogether. So we have to price accordingly at different states differently. So for example, in Madpadesh, our maximum selling brand is central province whiskey, which is there. In Maharashtra, you're not allowed to sell that brand because of the IMFL policy. In Karnataka, it is only different strategy. So we have -- so that's what we are at Sumanta opening them up. is that we are in process of being a future-ready company. These are planning to have even every product in our portfolio, be it Rum, [indiscernible] Vodka, Gin, RTD, Tequila and at different price points. So after the launch of these entire product portfolio, we will be one of the companies in the country, which will have the entire portfolio availability to us. So as we are present in 14 states right now, so it becomes easier because if only one of the products you enter, it becomes difficult for you to track in that particular state. Out of these 14 states, 2 or 3 products will play

Sir, I was asking of pricing and positioning of the single malt, which you will be launching in future?

Okay. So pricing and promoting a single mall would depend on state to state. We are planning to do single malt in 2 price point category, okay? One, a price point would be at a reasonable price point. which will be affordable single malt, and we will be looking at a higher volume on those. And second would be on the premium category side. So these are the strategies which we are looking to launch. And apart from that, the positive thing which we have seen in Indian markets is that market and as the world also, the Indian Single Malt has gained a higher traction higher traction of single malls across the world. So last year's data, if I give you, in India, 53% of the single mall industry was off mid-single malls. So that speaks to a lot about the quality which we are producing.

Okay. And by when will we be wanting this ingest -- we'll be launching our single band to [indiscernible] 228, okay, the first single month also will come in X22 FY '29. -- correct?

Yes, [indiscernible] No, no, no. It's FY '28. Okay. So it means H2 27, maybe half year of '27 FY '28.

The next question comes from the line of Shweta Hana and Individual Investor.

[indiscernible] -- destination regarding this category because a lot of players are entering in a circular. So what are our strategies? What are we deploying to enter this category and also build our market like what is the industry TAM for this category are consumer towards white spirits?

See, this is a new category after Jim, which has been growing substantially and seeing a great amount of traction in the market. And our strategy in this is that we would be the only Indian tequila. So we are calling for the authentic tequila from Mexico. That is the main reason why our [indiscernible] also got delayed. Because to call it Tequila, you have to get yourself registered in Mexico, your brand should be registered in Mexico, Tequila region per se. So that's what we have done. And we will be launching at a very attractive price point. So we'll be trying to disrupt the market with this product, which we launched.

The next question comes from the line of Atia with ANS Wealth.

Congratulations on a good set of numbers. I just wanted to ask, are we any more places in Maharastra now?

As of last time, you were only in 3 places. So that's my first question. So we are available right now only in primarily 3 to 4 places in Astra. So that is 4 places. That is Bombay, Thane, Pune and Napo region. We are trying to have a good foothold in these primary main regions because Maharashtra is a very expensive market. It's a very capital-intensive market for an entry player. And once your product gets clicked in these particular markets, we'll automatically see traction in the other markets as well.

Okay. Perfect. And I had a very small question. On the RTD, which we have, what is the underlying spirit per se?

So underlying spirit is primarily what car. It's what -- and like we have a different flavor. So one flavor is a in that underlying is and the other products, we have vodka right now.

Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for the closing remarks.

I would like thank everyone for taking the time to join us on today's conference call. Should you have any further queries, please free to get in touch with our Investor Relations advisers Go India. Thank you once again for your continued support and participation.

Thank you, sir. Ladies and gentlemen, on behalf of Go India Advisors, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.