Globus Spirits Limited Q3 FY26 Earnings Call Summary

Summary

Globus Spirits Limited - Q3 FY26 Earnings Call Summary Tuesday, January 13, 2026 4:00 PM

Event Participants

Executives 3 Nilanjan Sarkar (CFO), Paramjit Singh Gill (CEO, Consumer Division), Shekhar Swarup (Joint Managing Director)

Analysts 8 Aashish Upganlawar, Avinash Roy, Chandrasekhar Sridhar, Dhaval Dama, Himanshu Shah, Hitaindra Pradhan, Nishant Bhatt, Nitin Awasthi, Raman K V, Soumya S., Vijay Shah

Financials & KPIs

Geographic & Segment Commentary

• Delhi: Performance was a significant drag due to excise policy transitions (Policy '24-25 ended Sept '25). Volume normalization began in late Q3, with management expecting a total return to normal operations by the end of Q4 FY26.
• Uttar Pradesh (UP): Achieved a milestone of 1 lakh cases in December for the R&O segment. The new ₹200 crore distillery (100k LPD capacity) received its license in early January, which is expected to drive significant margin expansion for both R&O and P&A portfolios in Q4.
• Rajasthan: Reported modest R&O volume growth of 2% and revenue growth of 3% YoY, consistent with industry trends. Management noted potential for Q4 “bumpy” growth if a rumored price increase leads to dealer advanced stocking.
• West Bengal/Assam: Operations in West Bengal are shifting bottling locations to reduce high labor costs. Assam showed encouraging early results for Mountain Oak and Brothers brands as the company anchors its Northeast expansion.

Company-Specific & Strategic Commentary

• Capacity Expansion: Capitalizing ₹200 crores for the UP asset in Q4, adding 100,000 liters per day of grain ENA production. This facility is dual-feed compatible (grain/molasses) to optimize production costs in the region.
• Vision FY29: Management reiterated targets for the consumer business to reach 50% of total revenue, with P&A contributing 25% of that share. Projected EBITDA margins for P&A are anchored at 15-17% by FY29.
• Premiumization & Innovation: Launched DOAAB Expression 02 (first Indian single malt matured in Japanese Mizunara Oak) and TERAI vodka. Strategy focuses on high-margin, in-house technical innovation rather than just brand acquisitions.
• Fundraising: An enabling resolution for up to ₹500 crores was passed to finance consumer business growth, specifically for brand-building A&P and building maturing malt whiskey inventory.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Direct Consumption & Margins

• Question: What explains the 500 bps YoY gross margin expansion? (Avinash Roy)
• Answer: Primarily due to a 15% YoY reduction in raw material costs and a structural shift toward the higher-margin P&A business. (Shekhar Swarup)

Delhi Turnaround

• Question: How soon will Delhi normalize following the policy drag? (Soumya S.)
• Answer: Normalization began in December; the market should be fully normalized within the January-March quarter (Q4). (Paramjit Singh Gill)

Fundraising Rationale

• Question: Why raise ₹500 crores given improving manufacturing cash flows? (Hitaindra Pradhan)
• Answer: To decouple brand aggression from raw material cycles and to aggressively build malt whiskey inventory for the DOAAB single malt brand, which requires years of maturation. (Shekhar Swarup)

UP Strategy

• Question: What is the target for the UP market? (Chandrasekhar Sridhar)
• Answer: We have anchored UP at 5 million cases by FY29, representing a 5% market share. The new distillery will provide the cost backbone to compete here. (Paramjit Singh Gill)

Key Takeaway

Globus Spirits delivered a quarter marked by structural transformation despite regulatory headwinds in Delhi. The manufacturing segment outperformed guidance with 86% capacity utilization and ₹7.5/liter EBITDA, benefiting from a 15% YoY drop in raw material costs. While the R&O segment remained flat due to policy transitions in Delhi and bottling shifts in West Bengal, the P&A segment grew 37% (ex-Delhi), with management guiding for 50% growth in Q4. Strategically, the company is pivoting toward a brand-led model, supported by the upcoming commissioning of the ₹200 crore UP distillery and a potential ₹500 crore fundraise to scale consumer business investments and malt inventory. Looking ahead, the company remains committed to its FY29 vision of 15-17% P&A EBITDA margins as it normalizes core markets and scales new geographies like Jharkhand and the Northeast.