Allied Blenders and Distillers Limited (ABDL) Q3 FY26 Earnings Call Summary

Summary

Allied Blenders and Distillers Limited - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026, 5:00 PM

Event Participants

Executives 4 Alok Gupta (Managing Director), J. Mukund (Head, Investor Relations and Chief Risk Officer), Jayant Manmadkar (CFO), Shekhar Ramamurthy (Executive Deputy Chairman)

Analysts 10 Abhijeet Kundu (Antique Stock Broking), Abneesh Roy (Nuvama), Aliasgar Shakir (Motilal Oswal), Avnish Tiwari (Vaikarya Change LLP), Chetan Mahadik (Systematix Group), Dhiraj Mistry (ICICI Securities), Karan Kamdar (Choice Institutional Equities), Kaustubh Pawaskar (ICICI Direct), Mehul Girish Desai (JM Financial), Nitin (Emkay Global)

Financials & KPIs

Geographic & Segment Commentary

• Telangana: Volumes were temporarily impacted by a 6-8 week disruption due to retail license re-auctions; however, the P&A segment grew 17.5%, outperforming the market. Management noted that stocking patterns normalized in January 2026, with long-pending dues finally starting to clear.
• Maharashtra: Policy-driven price changes negatively affected consumer affordability, leading to high double-digit industry de-growth. ABDL has applied for participation in the Maharashtra Made Liquor (MML) category via its subsidiary Minakshi to mitigate IMFL headwinds.
• Uttar Pradesh (UP): Remains a high-growth market where the company is investing ₹110 crores in a fully automated bottling plant. This move will eliminate a ₹27 per case franchise fee and improve logistics efficiency for its 6 million case annual volume in the state.
• International & Duty-Free: Footprint expanded from 14 to 31 countries in 21 months, with a target of 35 by Q4FY26. The export model is higher margin and lower working capital intensive; ICONiQ White is now present in 9 international markets.

Company-Specific & Strategic Commentary

• ICONiQ White Milestone: The brand is currently running at a 12 million case Annual Run Rate (ARR) and is expected to cross 10 million cases in FY26, compared to 5.7 million in FY25.
• Backward Integration (Phase 1 & 2): Total capex commitment stands at ₹700 crores; Phase 1 (PET bottling, Malt/ENA distilleries) seeks to add 300 bps to gross margins by FY28, with 70 bps already realized.
• ABD Maestro (Luxury Portfolio): This segment reached an ARR of ₹40 crores in Q3, with targets to double this in Q4 and again in FY27. The portfolio now includes 9 brands across Gin, Vodka, and Scotch.
• CSD Channel Expansion: Four brands (Jolly Roger, Sterling Reserve B7, Kyron, and ICONiQ) received CSD approvals, opening a high-margin channel that accounts for ~10-12 million cases annually for the industry.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Telangana Inventory Issues

• Question: What caused the volume softness in Telangana and what is the Q4 outlook? (Nitin, Emkay)
• Answer: License re-bidding forced retailers to exhaust old stocks, causing a 6-8 week buying halt. January 2026 shows normalization, and we expect double-digit growth in Q4 (Alok Gupta).

Margin Drivers

• Question: Can the 15% margin target be reached earlier than FY28? (Mehul Desai, JM Financial)
• Answer: We have upgraded our FY28 guidance to 17-18%. Phase 1 capex adds 230 bps more, and the UK FTA could add 200 bps. We are currently capturing only a fraction of the total integration benefits (Alok Gupta).

Luxury Portfolio (ABD Maestro)

• Question: What are the KPIs for the luxury segment and which brands are scaling? (Sanjay Manyal, DAM Capital)
• Answer: Zoya Gin has grown 300% since launch with 70% gross margins. We are using a “portfolio approach” to reduce the cost of sales in premium on-premise accounts (Alok Gupta).

Capacity & Sourcing

• Question: What is the total ENA requirement and indigenous sourcing plan? (Sanjay Manyal, DAM Capital)
• Answer: Requirement is 200 million liters for a 50 million case volume. We currently produce 70 million liters; this will hit 120 million by FY27 and 200 million by end of FY28 (Alok Gupta).

Key Takeaway

Allied Blenders and Distillers delivered a resilient Q3 FY26, characterized by a significant shift toward premiumization as P&A salience reached 48.5%, despite regional regulatory headwinds in Telangana and Maharashtra. EBITDA margins expanded to 13.6%, bolstered by the successful commissioning of the PET bottling facility and a robust 12 million case run rate for ICONiQ White. Management is aggressively pursuing backward integration with a total ₹700 crore capex plan to secure 200 million liters of ENA by FY28, which is expected to drive margins toward the 17-18% range. Strategic entries into the CSD channel and the luxury ABD Maestro segment (now at a ₹40 crore ARR) provide diversified growth levers. Looking ahead, the company expects double-digit value growth in Q4 FY26 as state disruptions subside, though long-term margin goals remain contingent on the timely execution of distilleries and the implementation of the UK-India FTA.