Tilaknagar Industries Ltd Q4 FY26 Earnings Call: Record Revenue Surges 148% YoY, Guides 16-18% EBITDA Margin

Tilaknagar Industries Ltd held its Q4 FY26 earnings call on May 29, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Quarterly Revenue and Volume

• Q4 net revenue of Rs.949 crores— up 148% YoY; adjusted for subsidy, Rs.941 crores (up 154% YoY), driven by the Imperial Blue acquisition and organic momentum.
• Q4 adjusted EBITDA of Rs.146 crores— up 124% YoY, delivering an adjusted margin of 15.5%; reported EBITDA was Rs.155 crores (margin 16.3%).
• Q4 overall volumes surged 135% YoY to >8 million cases— Imperial Blue contributed 4.6 million cases in its first full quarter of ownership.
• Q4 NSR per case of Rs.1,177— up 5.4% YoY; ex-Imperial Blue NSR rose 2.6%, reflecting a favourable mix shift.
• ~40% market share maintained— as the largest P&A IMFL player in Southern India during Q4 FY26.
• Exceptional expense of Rs.60 crores booked in Q4 FY26— primarily on TSMA fees and labour code changes; the company exited TSMA in Q4, with three states remaining and full transition expected by March 2027.

Acquisition Delivering Scale, Margin Expansion Underway

• Imperial Blue revenue in FY27 guided to exceed ~Rs.3,300 crores— the level at which the business was acquired in FY25; management expects 21–21.5 million cases sold in FY27 (FY 2026-2027).
• Q4 FY26 Imperial Blue volumes of 4.6 million cases— with net realization of ~Rs.1,300/case, implying an annual run rate of ~Rs.2,400 crores; NSR per case will be 5–10% lower after discount exclusion under new accounting.
• Full integration of Imperial Blue targeted by end of FY27— management expects no delay into FY28 (FY 2027-2028).
• 250–400 bps margin expansion expected on the acquired business over FY27–FY28— driven by cost optimizations, supply chain improvements (bottling, packaging, G&A), and potential price increases in key states like Telangana.
• Employee cost optimization from the acquisition already commenced— further supply chain and revenue synergies (TI brands entering new states, IB entering new regions) are expected from FY27 onwards.
• Deferred consideration of 28 million euros payable to Pernod Ricard— with no other related costs expected; a two-year moratorium on debt repayment remains in place.

Mansion House Milestone and Northern Market Foray

• Mansion House Brandy crossed 10 million cases in FY26— cementing its position as the largest brandy in the company's portfolio and a key driver of P&A segment leadership.
• Brandy launch in northern markets planned for FY27— covering mass, semi-prestige, and luxury (Monarch) portfolios; management did not disclose specific touchpoint targets.
• Prestige-and-above brandy market expected to grow at a similar clip to Tilaknagar's overall growth in FY 2026-2027— driven by Mansion House and Courrier Napoleon brandy performance.
• Amara Vodka from the SSL portfolio now generating traction— a usership arrangement kicked in during the latter part of FY25-26, contributing to the company's books; management declined to disclose specific plans for new vodka brand launches.
• NPD pipeline and luxury business described as priorities— management called it premature to provide specifics, but cross-linkages between TI organic luxury/super-premium and SSL portfolios are expected to deepen.

Medium-Term Margin Ambition with Near-Term Cost Headwinds

• Management guided consolidated EBITDA margins to reach 16–18% within 24–36 months— i.e., by FY 2027-2028 to FY 2028-2029, aided by a change in disclosure of selling expenses.
• At least the lower end of 15.5% margin sustainable in FY 2026-2027 on a full-year basis— though management acknowledged potential short-term impact in Q1 FY 2026-2027 from input cost inflation; the upper end of guidance includes UKFTA benefit and the Telangana price hike.
• Selling costs as a percentage of grossed-up revenue stood at ~6–6.5%— based on Q3 FY26 reported numbers; these are now netted against gross revenue under the new accounting policy, with no impact on absolute EBITDA, PAT, or EPS.
• Quarterly staff cost run-rate confirmed at Rs.43 crores— a steady-state level; workforce expanded from ~350 to 850 employees as of March 2026.
• TSMA fees for FY27 expected to decline QoQ— full-year impact of Rs.55–Rs.60 crores; only one state is expected to remain under TSMA in H2 FY27.
• UKFTA customs duty reduction will have no direct impact on margins— it affects MRP, not revenue or cost; margin expansion will come from operational levers, not trade policy.

Leverage Reduction Path and Nigeria Expansion

• Net debt target of ~Rs.1,700 crores by end of FY27— implying a reduction in leverage; net debt-to-EBITDA ratio guided to fall below 1x by FY29 (FY 2028-2029).
• Working capital cycle guided at 53–55 days of gross revenue for FY 2026-2027— management sees this as the ongoing sustainable range.
• Investment of up to Rs.30 crores planned in Nigeria subsidiary— period unspecified; management cited a sustainable existing business of ~2.5 lakh cases with an addressable volume opportunity.
• Maintenance capex guided at Rs.25 crores per year for FY27 and FY28— reflecting a disciplined capital allocation posture.
• Telangana government dues have been stable since January 2026— no further deterioration in Q4 FY26; management is actively working with authorities to reduce outstanding days.

Growth Drivers and Strategic Priorities

• High single-digit to low double-digit volume growth guided for FY27— with Imperial Blue growing slightly faster than the base business due to the lower FY26 base; double-digit volume CAGR expected over the next three years.
• Karnataka MRP reduction of ~Rs.20 on 180 ml packs for Imperial Blue and Mansion House— expected to boost volumes in FY 2026-2027; a similar Rs.22 reduction previously drove high-teens growth.
• Under new accounting, consolidated revenue (including brandy) will be less than Rs.5,000 crores for FY27— with old accounting it would exceed that threshold; IB NSR per case is approximately Rs.20–Rs.30 above the company's combined NSR.
• Full-year TSMA impact of Rs.55–Rs.60 crores in FY27— declining QoQ, with only one state expected to remain under TSMA in H2 FY27; about 5% of TSMA costs may appear in operating expenses going forward.
• Management cited FY26 as a landmark year— expressing confidence in identified short-term and long-term drivers, aiming to build a pan-India, premium-focused alcobev company.
• Geopolitical impact on input costs flagged as a near-term pressure point— management is pursuing cost optimization measures to offset the impact.