Tilaknagar Industries Reports 57.7% Drop in Q2 Net Profit at ₹22.26 Crore on Imperial Blue Integration Costs

Homegrown spirits maker Tilaknagar Industries Ltd (TIL) reported a 57.7 percent decline in its consolidated net profit to ₹22.26 crore for the September quarter of FY27, according to a regulatory filing released on Friday. The company had posted a net profit of ₹52.67 crore in the corresponding period of the previous fiscal year.

The drop in bottom-line performance was largely attributed to an exceptional loss of ₹10.94 crore incurred during the quarter. These non-recurring expenses were connected to the ongoing integration of the Imperial Blue business division, which TIL acquired from Pernod Ricard India. Excluding exceptional items, the company's profit before exceptional items and tax stood at ₹33.24 crore, registering a 37.16 percent decrease from ₹52.91 crore recorded a year earlier.

Despite the profit contraction, the company witnessed substantial top-line growth. TIL's revenue from operations surged twofold to reach ₹2,437.55 crore in the second quarter, compared to ₹896.92 crore in the same period last year. Total income similarly increased twofold to ₹2,438.33 crore. However, total expenses also rose twofold, touching ₹2,405.08 crore during the quarter under review.

In operational terms, the company stated that overall volume grew 160 percent year-on-year, reaching 8.9 million cases of 9 litres each. Chairman and Managing Director Amit Dahanukar noted that while primary volumes remained flat during the quarter, secondary volumes showed robust momentum with an impressive 8 percent growth on a quarter-on-quarter basis. According to Dahanukar, Imperial Blue secondaries grew by 8.5 percent, while existing business secondaries expanded by 7 percent. He added that Imperial Blue further strengthened its position by gaining over 100 basis points in pan-India market share during the quarter.

Tilaknagar Industries is known as the maker of Mansion House Brandy, which stands as India's largest and the world's second-largest-selling brandy. The company is also home to Imperial Blue Whisky, recognized as the world's third-largest-selling whisky.

"Corporate mergers and acquisitions often bring short-term financial pressure, as seen in Tilaknagar Industries' exception-driven profit dip due to the Imperial Blue integration. While integration costs and doubled expenses have impacted the bottom line for the quarter, the simultaneous doubling of revenue and steady growth in secondary volumes indicate that top-line scale is expanding. The key for management going forward will be to streamline operational synergies efficiently to translate surging revenues and brand strength into sustainable net margins." — Dr. Shishir Gupta, Founder & CEO, StartupLanes