By Chaitanya
BBA Finance Graduate with over 6 years of experience in the stock market and finance.
Tilaknagar Industries Ltd, a prominent name in India’s alcoholic beverage sector, has reported an exceptional Q1 FY26 performance, showcasing robust financial health and a strategic vision for the future. The company’s recent announcement not only highlighted impressive earnings but also confirmed a significant acquisition that is set to reshape its market presence. This strategic move aims to solidify Tilaknagar Industries’ position as a pan-India, multi-category player, moving beyond its traditional dominance in the Southern Indian brandy market.
Q1 FY26: A Quarter of Impressive Growth for Tilaknagar Industries
Tilaknagar Industries has kicked off the financial year with remarkable figures. For the first quarter of FY26, the company reported a substantial revenue of Rs 4,091 million (Rs 409.1 crore), marking a significant 30.6% increase year-on-year. This surge was primarily fuelled by a strong 26.4% growth in sales volume, surpassing 32.1 lakh cases, even amidst regional price adjustments in Andhra Pradesh. Excluding subsidy income, the revenue growth stood at a healthy 20.5% year-on-year.
The operational performance also saw a considerable uplift. Operating profit (EBITDA) reached Rs 94 crore, representing an impressive 88% rise from Rs 50 crore in Q1 FY25 and a 20.5% quarter-on-quarter increase from Rs 78 crore in Q4 FY25. After accounting for exceptional items, the Profit After Tax (PAT) demonstrated a phenomenal 120.8% year-on-year jump, reaching Rs 88.5 crore compared to Rs 40.1 crore in the previous year. Diluted Earnings Per Share (EPS) for Q1 FY26 stood at Rs 4.54.
Financially, the company remains strong, reporting a net cash position of Rs 1.63 billion as of June 30, 2025. Demonstrating its commitment to capacity building, Tilaknagar Industries has approved an investment of Rs 590 million for expanding its Prag Distillery in Andhra Pradesh. This expansion is set to significantly boost annual production capacity from 6 lakh to an impressive 36 lakh cases.
Strategic Leap: The Imperial Blue Acquisition
In a landmark move, Tilaknagar Industries has signed a definitive agreement to acquire the renowned Imperial Blue whisky business from Pernod Ricard India. This all-cash deal, valued at Rs 4,150 crore, includes a deferred payment of Rs 282 crore payable four years post-closure. This transaction marks the largest acquisition by an Indian company in the domestic alcoholic beverages sector, underscoring Tilaknagar’s ambitious growth strategy.
Imperial Blue, a formidable brand, commands an approximate 9% volume share within India’s whisky category, with annual sales volumes ranging between 22.2 to 22.4 million cases. The brand contributed approximately Rs 3,067 crore in revenues in 2024 and ranks as the third-largest whisky brand in India by volume, only behind McDowell’s and Royal Stag. This acquisition is poised to dramatically enhance Tilaknagar Industries’ presence in the vast Indian whisky market, which itself accounts for around 78-79 million cases annually.
The deal, which will be funded through a combination of debt and equity, is anticipated to close in approximately six months from July 2025, pending approval from the Competition Commission of India (CCI), which is expected by the end of calendar year 2025. Furthermore, Tilaknagar Industries has secured brand continuity for its Mansion House and Savoy Club brands, with the Bombay High Court upholding its trademark ownership – a crucial development for its established product lines.
Future Outlook and Projections
Analysts are optimistic about Tilaknagar Industries’ trajectory. According to a Systematix report, the company is projected to achieve robust growth in the coming years. It is important to note that these projections primarily reflect organic growth and do not yet include the financial impact of the Imperial Blue acquisition, as separate disclosures are pending.
| Financial Metric | FY25 (Actual/Adjusted) | FY26E | FY27E | FY28E | CAGR (FY25-FY28E) | Notes |
|---|---|---|---|---|---|---|
| Revenue Growth | – | – | – | – | 16.5% | From Systematix report, excludes Imperial Blue projections |
| Volume Growth | – | – | – | – | 15.7% | Estimated volume CAGR |
| EBITDA CAGR | 16.1% operating margin (adj. subsidy) | 16.3% | 16.7% | 17.1% | 19.7% | Margins projected to expand slightly; substantial reinvestment into marketing |
| PBT CAGR | – | – | – | – | 22.6% | Taxation impact factored from Q2 FY26 |
Operating margins, adjusted for subsidy income, are estimated to expand modestly from 16.1% in FY25 to 17.1% by FY28E. A significant portion of this margin expansion is planned for reinvestment into marketing and brand-building activities, vital for sustained Tilaknagar Industries growth. Based on these projections, Systematix has revised its target price for Tilaknagar Industries shares to Rs 568, up from Rs 438, valuing the company at 45x June 2027E EPS.
Latest Developments and Market Reaction
The market has reacted positively to these developments. As of August 12, 2025, Tilaknagar Industries’ shares saw a rise of over 4%, closing at Rs 491.9, with an intraday high of Rs 513. The company’s market capitalization stood at approximately Rs 9,545.33 crore.
- August 12, 2025: Tilaknagar Industries shares surged over 4% following the Q1 FY26 results. The company achieved record Q1 volume (32.1 lakh cases) and a substantial profit growth, with PAT jumping 120.8% year-on-year to Rs 88.5 crore and EBITDA increasing 25% excluding subsidies.
- August 12, 2025: Q1 FY26 revenue reached Rs 409 crore, up 30.6% year-on-year, while volume growth was 26.5%, marking the best Q1 volume performance since FY15.
- July 23-24, 2025: The company formally announced the definitive agreement to acquire the Imperial Blue whisky business from Pernod Ricard India for Rs 4,150 crore. This includes a deferred payment of Rs 282 crore after four years.
- Regulatory Update: The acquisition is currently awaiting approval from the Competition Commission of India (CCI), which is anticipated by the end of 2025.
Conclusion
Tilaknagar Industries is clearly on a fast track, leveraging strong organic growth and a game-changing acquisition to enhance its market footprint. The impressive Q1 FY26 performance, coupled with the strategic Imperial Blue acquisition, positions the company for significant future expansion and diversification. With solid financial health, ambitious capacity plans, and favourable analyst outlooks, Tilaknagar Industries appears poised for continued strong growth in the dynamic Indian alcoholic beverages market.
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