Key highlights of the call

The net sales for Q3 FY16 inclined by 26% YoY to Rs 196.7 crore driven by robust growth in IMIL, Bulk Alcohol and By-products segment. EBIDTA grew by 91% to Rs 18.7 crore with EBIDTA margin 9.5% (up 320 bps YoY). The net profit stood at Rs 3.5 crore against Rs 1 crore in the corresponding quarter of last year.

IMIL volumes improved by 11% YoY led by strong growth in all IMIL markets; Bulk Alcohol registered 22% growth, while Others segment led by value added product DDGS reported 116% growth

Growth in Consumer business stood higher at 28% to Rs 92.5 crore.

Revenues from IMIL stood at Rs 92.2 crore, an increase of 30% due to strong revenue growth of 25% & 47% in Rajasthan & Delhi respectively. Overall volumes improved to 3.1 mn cases

In Rajasthan, 1.77 mn cases in sold. Revenue grew 25% to Rs 57.99 crore.

In Haryana, 0.69 mn cases in sold. Revenue stood at Rs 19.21 crore.

In Delhi, 0.18 mn cases in sold. Revenue grew 47% to Rs 4.88 crore

Launched in Jan 2015, Bihar sold 0.5 mn cases in Q3 FY16 accounting for 11% of total 3.1 mn IMIL cases in Q3 FY16

Revenues from manufacturing business increased by 25% to Rs 104.2 crore in Q3 FY16 driven by 17% revenue growth in Bulk Alcohol and over 228% growth in DDGS; DDGS volumes and realizations improved by 124% and 46% respectively

Capacity utilization improved substantially to 94% in Q3 FY16 from 77% in Q3 FY15 resulting in production of 13 mn BL in Q3 FY16. Bulk revenues increased by 22% due to higher off take of bulk alcohol in domestic & export volumes. Witnessed 24% growth in export volumes

By-products reported strong growth of 116% driven by DDGS – higher alcohol production resulted in increased DDGS volumes combined with improved realizations.

DDGS growth is because of higher production due to stabilization of both the units and good marketing efforts.

Franchisee IMFL revenues were down by 10% due to lower volume offtake in Rajasthan partly offset by volume increase in Haryana.

Bottling volumes marginally increased by 3%; this was led by sustained traction in Haryana, which witnessed 14% higher volumes, volumes in Rajasthan declined by 11% due to lower take-off

East India expansion advancing well – on schedule to commission facilities in Bihar and West Bengal in Q1 FY17

IMIL ban in Bihar not expected to impact greenfield operations of the Company as bulk alcohol demand to remain robust as IMIL to be replaced by economy IMFL brands. Bihar IMIL market is of 20 lakh cases per month. and IMFL is 6 lakh cases per month. With the banning of IMIL, the consumer will move to lower segment IMFL. There will be good demand for lower segment IMFL..

Bihar remains a deficit state – to cater the growing need of Bulk Alcohol in Bihar, which is witnessing a huge deficit of 55 million liters

West Bengal IMIL industry is around 20 lakh cases per month, same size as Haryana market. Its faster growing markey than Haryana and it is fragmented market. Mid term outlook – opportunity here is attractive. MRP here is fixed by government. Selling price of the company's product will be higher than Haryana.

Out of Rs 240 crore capex on East India expansion, the company has spent Rs 163 crore.