Allied Blenders Q1: Profits Jump Multifold | NDTV Profit
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00:00The quarter has started off to plan. I think a lot of work that has happened in the last
00:06few quarters was around consolidation of our portfolio, looking at more profitable market,
00:11sharper focus on the P&A segment, entry into the luxury segment, sharper focus on our gross
00:16margin. So a lot of numbers that you've spoken about reflects on the fact that the gross
00:20margins have expanded by over 300 basis point and it's reflecting in EBITDA growth. So the
00:26quarter one is looking good. We're quite happy where we are and the rest of the year is equally
00:30exciting.
00:31Right. And, you know, I want to understand that if you can give us a breakup as to how
00:36much the volume growth was versus how much was the value growth in Q1 FY25?
00:41Yeah, so there are two ways of looking at it. One is, of course, doing a comparison
00:45with Q1 of last financial year and second is to do it on a trend basis. So if you were
00:49to look at Q1 this financial year versus the Q4 last financial year, we are marginally
00:54up by about 3% in terms of volume and value. So trend wise, it's looking better and it
01:01is coming on back of a better state margin combination, therefore delivering a better
01:06gross margin and eventually reflecting down in EBITDA. So that's really where we are.
01:11In terms of our new brand launches, you would recall we've spoken about ICONIC earlier.
01:16So ICONIC did do 2.2 million cases last year, exited on the ARL of 3 million. Very happy
01:21to say that it's only grown and consolidated from there and it's looking more like a 4
01:25million case ARL plus and continuing to grow.
01:28Right. But Mr. Gupta, overall, you know, correct me if I'm wrong here, overall volumes were
01:33down by around roughly 1 million cases. So I want to understand what went wrong here
01:38and, you know, will this be recovered in the coming quarters?
01:42Well, I think it was all about what went right, because consciously we picked up state brand
01:48combination that offer a better margin profile. As you know, in our business,
01:53it's not a function of volume, it's a function of which volume and which state and which brand and which SQ.
01:58So this is part of what I would say a very planned portfolio consolidation.
02:04And that's why when we look at when we do the comparison versus Q1 of last financial year,
02:09you're seeing a degrowth. But when you're seeing Q1 versus Q4, that's the exit quarter, you're seeing a growth.
02:14So I think from here on, all the required work that was to be done in terms of portfolio
02:19consolidation, making the right choices in terms of state brand combination has been done.
02:24So we should hopefully see a quarter on quarter better performance in terms of volume.
02:28And we certainly look forward to catching up the million cases that we've lost.
02:32Got it. And Mr. Gupta, you know, I want to understand that, you know, when it comes to the AlcoBev segment,
02:38we always talk about how the premiumization wave has been happening in the entire industry.
02:43But I want to understand that your prestige in above category has taken some kind of hit in terms of volumes and as well as sales.
02:49So was this on account of a lower base? Is it just that or, you know, it's an actual hit.
02:57And overall, do you see the premiumization trend going ahead also in the same way as it was last year?
03:04So the PLA segment for us actually is doing exceedingly well.
03:09Officer's Choice Blue, Iconic White and Sterling B7, all three brands put together,
03:14give us a very, very strong foothold in the R25 million case P&O Whiskey segment.
03:18So we're quite happy where we are. The correction that were required were only to the extent of state
03:24or state brand combination where we are not happy with the gross margin return.
03:27So like I said, I think these corrections were required to make sure that we end up with a better margin profile,
03:32which is again reflecting in the number. Another segment that we're quite excited about is a premium and luxury segment
03:37where we launched Zoya last year. It's rolled out in two states and by the end of this quarter,
03:42we'll roll out in six more states. So we are now moving closer towards a national launch of Zoya
03:48and we're looking forward to launching a few more new products during the current financial year on the luxury side.
03:53So premiumization both from the consumer side continues and from our side will continue to be an important area of focus.
04:00Right. And which segment will these products be from? Because I believe whiskey and gin is your strong suit.
04:07Well, whiskey is definitely a strong suit. Now we have presence of luxury gin with Zoya.
04:13We are looking at consolidating our position again in whiskey, but hopefully also looking at luxury vodka,
04:19maybe looking at, you know, premium dark.