Allied Blenders and Distillers Limited: A Spirited Performance in Q2 FY26

Allied Blenders and Distillers Limited (ABDL) has once again demonstrated a robust financial performance, marking its fifth consecutive quarter of strong growth since listing. The company's Q2 FY26 results reveal a strategic focus on premiumization and backward integration, positioning it for sustained profitability in the dynamic Indian spirits market. The consolidated income from operations for the quarter stood at an impressive ₹995 crore, reflecting a substantial 14.4% year-on-year increase. This growth was underpinned by a significant improvement in profitability, with EBITDA rising by 23.6% to ₹130 crore and EBITDA margins expanding to 13.1%. The profit after tax (PAT) saw an even more remarkable surge of 32.3%, reaching ₹63 crore.

Driving Growth Through Premiumization and Portfolio Expansion

The company's strategic pivot towards higher-value segments has been a key driver of its recent success. The Prestige & Above (P&A) category exhibited strong momentum, with an 8.3% quarter-on-quarter and a notable 28.8% year-on-year volume growth. This has significantly increased the P&A segment's contribution to total sales, reaching 56.9% in Q2 FY26, compared to 49.0% in Q2 FY25. ICONIQ White, a standout performer, has been instrumental in this growth, recognized as one of the fastest-growing spirits brands globally, doubling its volume organically. The brand's success is attributed to its strong appeal among younger consumers and effective distribution expansion across regions. Even the Mass Premium segment, led by the flagship Officer's Choice whisky, maintained its market leadership despite a 5% degrowth in Q2 FY26 due to a specific regulatory intervention in a southern state.

Strategic Investments and Global Ambition

ABDL is not just focusing on sales but also on strengthening its operational backbone through strategic investments. The company successfully commissioned its EBITDA-accretive PET bottle manufacturing facility in Rangapur, Telangana, in September 2025. This ₹115 crore investment, with an annual production capacity of over 600 million bottles, will meet 70-75% of its current PET packaging requirements, leading to enhanced supply chain efficiency and reduced costs. Furthermore, the company's single malt distillery in Rangapur and the ENA distillation capacity expansion in Aurangabad are on track, expected to be operational by Q4 FY26 and Q4 FY27, respectively. These initiatives are projected to contribute approximately 300 basis points upside to gross margins over the next 2-3 years.

In terms of global ambition, ABDL has significantly expanded its international footprint, increasing its reach from 14 to 30 countries within just 18 months, with a target of 35 countries by March 2026. This asset-light, high-profit export model delivers profitability approximately 1.3 times higher than the domestic market and operates with less working capital per case. The company aims to build a 1 million case business in Africa by FY28 and is broadening its presence across Latin America, Europe, North America, and Southeast Asia. The Super-Premium to Luxury portfolio, under ABD Maestro, is also expanding its presence, debuting in duty-free markets and gaining global recognition.

Navigating Challenges and Future Outlook

Despite the strong performance, ABDL acknowledges certain challenges. The Mass Premium segment faced a temporary setback due to a regulatory intervention in a southern state and the Maharashtra-Made Liquor (MML) policy, which led to a 20% decline in IMFL volumes in Maharashtra. The company is also actively working to resolve overdue payments of over ₹700 crore from the Telangana government, with some payments already initiated. However, management remains optimistic, expecting a normalization of the Telangana market by Q3 FY26 and continued profitable growth momentum in H2 FY26, driven by the festive season.

ABDL's management is focused on Net Sales Value growth, operational excellence, portfolio diversification, optimizing working capital, and timely project execution. The company's capital structure provides ample headroom for future growth plans, with a Net Debt/Equity ratio of 0.56x in H1 FY26, well within the stated framework. The average cost of borrowing has also reduced by 140 basis points to 8.2% in H1 FY26, supported by two credit rating upgrades. With a clear strategy for premiumization, backward integration, and global expansion, Allied Blenders and Distillers Limited is well-positioned to deliver long-term profitable growth and create sustainable shareholder value.