Coupled with a slight improvement in average sales realisations, it saw a 14.4% jump in net revenues to Rs 2,685.7 crore, according to India Ratings.
The company’s volume contribution from Andhra Pradesh improved in FY22 to 1.3% from 0.2% in FY21. Other states such as Maharashtra, Uttar Pradesh, West Bengal, and Telangana as well as exports recorded significant sales volume growth.
Yet, its revenue was lower than the Rs 2,995.9 crore it reported in FY20. “We expect our revenues to cross pre-Covid levels this fiscal,” said Barik.
According to India Ratings, the company’s operating margin declined to 7.3% in FY22 from 8.3% from FY21, on account of a sharp increase in power and fuel cost charges as well as selling and distribution costs.
“The company has received price increases from many markets and is expecting similar increases in the remaining markets as well, which should provide some cushion to the company’s margins,” India Ratings said.
The draft red herring prospectus filed with the Securities and Exchange Board of India highlighted that its Executive Chairman Kishore Rajaram Chhabria will forego the annual compensation (Rs 43 crore in FY22) post the completion of the IPO, which should be incrementally accretive to its operating margin.
The company is also scouting for brands in the premium segment to boost its margins and take it close to its top two listed peers, United Spirits Ltd. and Pernod Ricard India Pvt., whose margins are in double digits.
“We are currently exploring brands when it comes to acquisitions of certain brands,” said Bikram Basu, vice-president-marketing and strategy at Allied Blenders and Distillers. “We expect margins to come closer to mid-high double digits soon,” he told BQ Prime.
Allied Blenders and Distillers is looking to raise Rs 2,000 crore via an initial public offering.
The IPO will consist of a fresh issue of equity shares worth up to Rs 1,000 crore and an offer for sale of Rs 1,000 crore by promoters and shareholders.
Of the total fresh issue, the company expects to utilise around Rs 700 crore towards debt repayment. The balance will be used for other corporate purposes including brand building, and capacity expansion, said Barik.
Its total outstanding debt stood at Rs 843 crore in FY22.