Tilaknagar Industries, a key player in India's liquor market, is set to increase prices in Telangana to maintain its strong stock performance. Known for brands like Mansion House brandy and Imperial Blue whisky, the company's shares have risen about 27% this year.
Amit Dahanukar, Chairman and Managing Director, said they've asked Telangana's government for a price hike, noting the last increase was three years ago. He cited rising input costs as a reason for the request.
The company has taken its proposal to a government price committee, hoping for a 12% increase, similar to the last one. At 10:25 AM on the National Stock Exchange, shares were trading at ₹579.25, showing over a 16% gain this past year.
Tilaknagar is also targeting Tamil Nadu, one of India's largest liquor markets. The state sells around 65 million cases annually, with brandy making up half. Despite this, Tilaknagar earns less than 1% of its revenue from Tamil Nadu.
Tamil Nadu's liquor trade is tightly controlled. All sales are managed by TASMAC, a state-run body that buys from a few approved manufacturers, mostly local. This makes it tough for outsiders like Tilaknagar to break in.
But politics in Tamil Nadu have shifted, with a new ruling party in power for the first time in decades. The government hints at possible liquor policy changes, though nothing is confirmed. Dahanukar mentioned that they are not hearing anything specifically on that regarding expanding the supplier list. Any changes could benefit Tilaknagar significantly.
Currently, Tilaknagar has just a 5% share of the premium brandy market in Tamil Nadu, compared to 45% nationally. This highlights the untapped potential, especially in the premium segment, which sees 10 million cases sold annually.
Tilaknagar has transformed since buying Imperial Blue, now 70% of its business. Dahanukar called the integration intensive, but noted volumes are up. In Q1, Imperial Blue volumes hit about 5 million cases, usually the weakest quarter. Annual volumes are expected to reach 23.5 to 24 million cases, up from 21 million cases at acquisition.
With a market cap of ₹14,378.23 crore, Tilaknagar is focusing on price hikes in Telangana and potential entry into Tamil Nadu's market, which could reshape its revenue in the coming years.
