Allied Blenders to enter single malt whisky, expects turnover to double in 5 years

Rangapur (Telangana), Sep 30 (PTI) Allied Blenders and Distillers Ltd (ABD), a home-grown spirits company, plans to enter the single malt whisky segment, amplifying its presence in the fast-growing premium segment of the alcoholic beverages, said its Managing Director Alok Gupta here on Tuesday.

Moreover, ABD, which currently operates two distilleries, plans to set up a third distillery to meet the growing demand and premiumisation, and is looking at both inorganic and organic ways for expansion, he said.

ABDL, makers of Officer's Choice Whisky and Premium Gin under brand Zoya, is setting up a single malt plant with a capex of Rs 75 crore at its Rangapur-based integrated manufacturing facility, which will be operational by the end of this fiscal year, he said.

“Single Malt whisky has to mature in a wooden cask for a medium period of three years. So post-2029, we will have our own Indian single-model coming out from this unit,” Gupta told PTI.

This will enable ABD’s entry into the high-growth global market, in which several of the Indian brands have recently won several accolades, winning awards at global competitions.

According to Gupta, this will be a fascinating opportunity for ABD as the Indian single malt has captured the imagination of global consumers. This also helps ABD to increase its exports, which contribute around 8 per cent of its topline.

“We are the largest exporter out of India. Till FY24, we were exporting to 17 countries, and have increased to 27 countries. We will expand our distribution footprint to 35 countries,” he said, adding “that sets a very solid and strong foundation for exporting our luxury portfolio, including the Indian single-model.” ABD, which was listed on stock exchanges in July 2024, had reported Rs 3,541 crore in income from operations for FY25.

Besides, ABD is also working on portfolio expansion, competing with foreign brands in the premium segment.

“Till FY24, broadly our portfolio was starting at sub-thousand rupees, was by and large sub-thousand rupees for a bottle of 750 ml. We have, since January of 24, launched five luxury brands,” he said.

According to Gupta, the recent reduction on duty under the latest GST reforms by the government, coupled with income tax “will allow the consumers to premiumise further.

The company, which on Tuesday commissioned its PET bottle manufacturing facility at its Rangapur manufacturing facility, is aiming for a “higher EBITDA margins, from 7.5 per cent to about 17 per cent” and even increase in return on capital to move from “current levels of 18 per cent to north of 20 per cent” as it is investing in people, technology and processes.

"Our outlook is we see our volumes growing by double digit, but we see our net sales value to grow by mid-double digit,” he said. When asked about the growth, Gupta said the company has guidance for 14 to 15 per cent annualised growth year on year for the next three fiscals.

"So in the next three years, we will see more than 50 per cent increase in our net sales value, and to get it to double, it will take maybe about a little over five years," it said.

ABD, as part of its expansion, is currently investing Rs 527 crore in Capex, as announced earlier.

"Out of Rs 527 crore, 25 per cent investment was done last financial year, 60 per cent will be done in this financial year, and the balance 15 per cent will be done in the next financial year,” said Gupta, adding "these investments are expected to enhance operational efficiency and improve gross margins by ~300 basis points by FY28.” ABD’s PET bottle manufacturing facility at its Rangapur-based integrated manufacturing facility has an annual capacity of over 600 million bottles and will meet a significant portion of its packaging needs, strengthening the supply chain and improving profitability with savings in logistics costs.

The facility also houses an ENA (Extra Neutral Alcohol) distillery, an IMFL (Indian Made Foreign Liquor) bottling unit and the upcoming single malt plant, which will have a capacity of 4 MLPA (million litres per annum). PTI KRH KRH DR DR