Any current/future new fundraising through debt or equity?

The company recently completed a preferential allotment (equity fundraising). The funds raised through this preferential allotment, along with internal accruals, will primarily finance the new expansion projects. There might be some minimal debt financing for the capex, but it will be very minor and easily manageable. The company does not foresee any significant debt requirement, expecting internal accruals and equity funds to suffice for project funding.

Any current/future capex/capital investment/strategic investment?

The company plans a capex of around INR 270 crores for setting up a new plant including a distillery and bottling plant in Uttar Pradesh to cater to northern markets. Financing of this expansion will be primarily through internal accruals and recently raised funds via preferential allotment; debt financing is expected to be minimal and manageable. The new Uttar Pradesh plant aims mainly for captive use, with excess ENA capacity to be sold externally. Expansion plans also include entering new states such as Goa, Karnataka, Maharashtra, and Pondicherry, with excise approvals expected post

Future growth expectations in sales/revenue/volumes?

Overall revenue growth of around 15% expected, including ethanol segment (Page 14). IMFL proprietary brands projected to grow 15%-20% in both volume and realization (Page 14). IMFL licensed segment expects steady growth with plans to enter new states (Goa, Karnataka, Maharashtra, Pondicherry, UP) from Q2 FY25 onward (Page 11). Premium and super-premium products launch planned, targeting 18%-20% growth in this segment, improving margins (Pages 10-14). Ethanol segment revenue estimated at around INR 300 crores for FY25 with full capacity utilization (Pages 12-16). IMIL volumes likely to remain s

Future growth expectations in earnings/operating earnings/profits/EPS?

The company expects EBITDA margin improvement going forward due to price hikes and full capacity utilization of the ethanol plant, leading to better fixed cost absorption. IMFL proprietary brands are projected to grow at 15%-20% in volume and realization, contributing to revenue growth. Overall revenue growth guidance is around 15%-16% for FY25, supported by expansion and premium product launches. Ethanol segment revenue is anticipated to be around INR 300 crores in FY25 with EBITDA margins between 8%-9%. EBITDA margins are forecasted to be in the mid-double-digit range (between 10%-16%). The

Current/ Expected Orderbook/ Pending Orders?

The ethanol plant is tied up with orders at 100% capacity utilization until January 2025. The company has orders in hand for full capacity ethanol production, ensuring no supply gaps until the contract expires. Post-January 2025, a new tender will be launched; the company expects continued demand due to government’s 20% ethanol blend target by 2025. For FY25, ethanol segment revenue is expected around INR 300 crores. The company is continuously bidding for tenders with all Oil Marketing Companies (ONCs) and has secured full-year contracts. Expansion plans include new states for IMFL proprietar

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Associated Alcohols & Breweries LtdQ1 FY24Beverages

Associated Alcohols & Breweries Ltd Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹842P/E: 19.4Market Cap: ₹1.7K CrSector: Beverages

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Overall revenue growth of around 15% expected, including ethanol segment (Page 14).
→IMFL proprietary brands projected to grow 15%-20% in both volume and realization (Page 14).
→IMFL licensed segment expects steady growth with plans to enter new states (Goa, Karnataka, Maharashtra, Pondicherry, UP) from Q2 FY25 onward (Page 11).
→Premium and super-premium products launch planned, targeting 18%-20% growth in this segment, improving margins (Pages 10-14).
→Ethanol segment revenue estimated at around INR 300 crores for FY25 with full capacity utilization (Pages 12-16).
→IMIL volumes likely to remain stable due to government caps, but price hikes aid top-line growth (Page 11).
→Company anticipates mid-double digit EBITDA margin with operational efficiencies and better fixed cost utilization (Pages 9-13).

Margin guidance

Category 3

→The company expects EBITDA margin improvement going forward due to price hikes and full capacity utilization of the ethanol plant, leading to better fixed cost absorption.
→IMFL proprietary brands are projected to grow at 15%-20% in volume and realization, contributing to revenue growth.
→Overall revenue growth guidance is around 15%-16% for FY25, supported by expansion and premium product launches.
→Ethanol segment revenue is anticipated to be around INR 300 crores in FY25 with EBITDA margins between 8%-9%.
→EBITDA margins are forecasted to be in the mid-double-digit range (between 10%-16%).
→The company expects sustained double-digit growth in premium products, targeting 18%-20% growth.
→Profit after tax (PAT) grew 22% YoY in FY24, indicating positive momentum.
→No significant debt expected for capex; expansion primarily funded through internal accruals and preferential allotment.

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Fundraise plans

Yes

→The company recently completed a preferential allotment (equity fundraising).
→The funds raised through this preferential allotment, along with internal accruals, will primarily finance the new expansion projects.
→There might be some minimal debt financing for the capex, but it will be very minor and easily manageable.
→The company does not foresee any significant debt requirement, expecting internal accruals and equity funds to suffice for project funding.

Order book

→The ethanol plant is tied up with orders at 100% capacity utilization until January 2025.
→The company has orders in hand for full capacity ethanol production, ensuring no supply gaps until the contract expires.
→Post-January 2025, a new tender will be launched; the company expects continued demand due to government’s 20% ethanol blend target by 2025.
→For FY25, ethanol segment revenue is expected around INR 300 crores.
→The company is continuously bidding for tenders with all Oil Marketing Companies (ONCs) and has secured full-year contracts.
→Expansion plans include new states for IMFL proprietary brands, with approvals expected post-election cycles.
→Overall, the order book for ethanol is firm till Jan 2025, with strong demand outlook aligned with government blending targets.

Capex plans

Yes

→The company plans a capex of around INR 270 crores for setting up a new plant including a distillery and bottling plant in Uttar Pradesh to cater to northern markets.
→Financing of this expansion will be primarily through internal accruals and recently raised funds via preferential allotment; debt financing is expected to be minimal and manageable.
→The new Uttar Pradesh plant aims mainly for captive use, with excess ENA capacity to be sold externally.
→Expansion plans also include entering new states such as Goa, Karnataka, Maharashtra, and Pondicherry, with excise approvals expected post elections.
→The company is focused on premiumization with plans to launch new premium/super premium products across quarters ahead, which should enhance margins.
→Ethanol segment has a recently operational plant producing revenue expected at around INR 300 crores in FY25, with full capacity utilization anticipated.

How does Associated Alcohols & Breweries Ltd rank vs peers in Beverages?

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