Associated Alcohols & Breweries Ltd

- The company plans a capital expenditure (capex) of INR150 to INR200 crores for setting up a 100 KL plant and bottling unit in Uttar Pradesh. - This capex is expected to be funded mostly through internal accruals. - No explicit mention of raising new funds through debt or equity was made in the discussion. - The company currently has surplus cash and is managing raw material procurement and other expenses internally. - No additional updates on future fundraising through debt or equity were stated.

- Planned Greenfield project in Uttar Pradesh with a 100KL ENA plant and bottling unit targeting northern states and the northeastern market. - Expected capex for the UP plant is INR 150-200 crores, funded mostly from internal accruals. - Initial plan to set up the bottling plant quickly and purchase ENA externally; subsequently, utilize internally produced ENA once the plant is operational. - Expansion into new states: Goa and Maharashtra finalized bottling arrangements; plans to enter Karnataka, Pondicherry, and Assam in the current financial year. - Focus on growing premium IMFL products, including newly launched Nicobar Gin and Central Province Rum, with more premium product launches planned quarterly. - Ethanol plant commercialized recently, with capacity utilization expected to reach 100% soon, contributing to margin expansion and revenue growth.

- Expansion into new states (Goa, Maharashtra, Karnataka, Pondicherry, Assam) planned from April FY25 to drive topline growth. - Focus on premiumization of IMFL products with new premium launches each quarter, expected to boost realizations and margins. - IMFL proprietary brand sales projected to grow 15%-18% YoY; licensed IMFL segment expected to grow 12%-15% YoY; premium lines targeted at 18%-20% YoY growth. - Ethanol plant operating at full capacity from February 2024, expected revenue INR250-300 crores in FY25, enhancing margins and overall EBITDA. - IMIL segment volume expected to remain stable due to policy constraints, with focus shifting towards premium and IMFL products for growth. - Merchant ENA sales showing significant growth (+29% YoY), contributing positively to revenue. - Overall EBITDA margin expected to improve over time as premium product mix grows and ethanol business stabilizes.

- The company targets double-digit EBITDA margins post-ethanol production, with FY25 margins expected in the lower double digits and higher margins anticipated in FY26. - EBITDA margin expanded by 200 bps recently due to increased sales of premium products and is expected to grow further with premiumization strategies. - IMFL proprietary brands are projected to grow 15%-18% YOY; licensed IMFL brands 12%-15% YOY; premium products 18%-20% YOY. - Ethanol plant commercialization is expected to scale to 100% capacity by February 2024, generating INR250-300 crores turnover in FY25, improving operational efficiency and margins. - The company anticipates sustained PAT growth with recent quarters showing 16%-21% YOY increases. - Premiumization and cost controls, including shift to PET bottles and multi-feedstock strategy, aim to enhance profitability and EPS growth. - Margins to benefit from economies of scale due to ethanol integration and favorable government policies supporting ethanol blending expansion.

- The ethanol plant has already received orders booked for 100% of its capacity. - The company is in the process of stabilizing the ethanol plant and expects to operate it at full capacity within 1-2 weeks from the call date. - There is no concern about capacity utilization as full capacity contracts have been signed with Oil Marketing Companies (OMCs). - The company is leveraging existing capacities and orders to ensure full utilization and sales post-stabilization.