Metrics cut 1
- R&O EBITDA margin guidance lowered to 15–17% (from recent 17–18% levels)
Event Participants
Executives (3)
Nilanjan Sarkar, Paramjit Singh Gill, Shekhar Swarup
Analysts (10)
Abneesh Roy, Hardik Jatheliya, Himanshu Shah, Hitaindra Pradhan, Nishant Bhatt, Nitin Awasthi, Parth Soda, Samid, Sucrit Patil, Tarang Agrawal
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from operations | ₹789 crores | +13% YoY; driven by manufacturing growth (+11%) and continued consumer momentum |
| Manufacturing segment revenue | ₹472 crores | +11% YoY; sales volume 56.11 million litres; capacity utilization 89% (record) |
| Consumer – P&A revenue | ₹55 crores | +35% YoY and +38% QoQ; volumes 0.42 million cases (+45% YoY and QoQ) |
| Consumer – R&O revenue | ₹256.4 crores | +10% YoY; volumes 4.48 million cases (+13% YoY) |
| EBITDA | ₹79.5 crores | +33% YoY; EBITDA margin 10.0% (vs ~8.5% in Q1 FY26 implied) |
| Manufacturing EBITDA per litre | ₹6.5 | Within INR5–7 guidance band; supported by record utilization and ENA demand |
| P&A EBITDA | -₹1.3 crores | Negative; investments in distribution, brand visibility, market development |
| R&O EBITDA | ₹44 crores | +13% YoY; stable execution, Rajasthan steady, UP scaling strongly |
| PAT | ₹27.6 crores | +49% YoY; PAT margin 4.0% |
| Net debt | ₹650 crores | Down from ₹660 crores as of March 2026 |
| Current ratio | 1.01x | Improved post refinancing and debt optimization |
| Interest coverage | 3.14x | Improved post refinancing |
| Installed capacity | 334 million litres | No major capacity expansion planned; maintenance capex ₹50–60 crores/year |
Geographic & Segment Commentary
Manufacturing: Segment revenue grew 11% YoY to ₹472 crores on 56.11 million litres, with record capacity utilization of 89% against ~85% guidance. EBITDA per litre was ₹6.5, within the INR5–7 range, helped by flexible ENA/ethanol production and strong international ENA demand. The UP facility is running above 90% utilization; ~25% of output is captive for consumer business, with the rest bulk sales, and the plant has become the flagship source for international sales under UP government policy.
Consumer – Prestige & Above (P&A): Revenue grew 35% YoY and 38% QoQ to ₹55 crores; volumes grew 45% YoY/QoQ to 0.42 million cases. Growth was broad-based across states and brands (Terai, Snoski, Brothers & Co.). EBITDA was -₹1.3 crores as investments continue in distribution and market development. P&A is now present in 11 states, with 6 states being driven toward core status (4 already core); target is ~10 core states within a couple of years. Assam and Jharkhand are showing strong trade and consumer acceptance.
Consumer – Regular & Others (R&O): Revenue grew 10% YoY to ₹256.4 crores; volumes grew 13% to 4.48 million cases; EBITDA grew 13% to ₹44 crores. Rajasthan remained stable; UP R&O volumes grew 2.4x YoY, crossing 0.2 million cases per month. Management maintained 15–17% EBITDA margin guidance, noting UP runs at slightly lower margins than Rajasthan. West Bengal R&O awaits final regulatory approvals, expected this quarter, with market re-entry ~60 days post-approval. Haryana remains a modest-growth state; Delhi re-entry is underway through the tender route.
Company-Specific & Strategic Commentary
Manufacturing-led consumer platform: Management continues to position Globus as a consumer-focused alcobev company built on a strong manufacturing base, which provides supply security, cost control, quality consistency, and free cash flow to fund the consumer business.
P&A market architecture: Core vs. emerging market framework keeps expansion disciplined; states are expected to become profitable in their third complete year after launch. First-phase core states have already crossed that threshold.
UP structural advantage: In-state manufacturing capability supports both R&O and P&A in UP, enabling faster scaling; UP R&O crossed 0.2 million cases/month during the quarter with >90% plant utilization.
Product innovation & portfolio building: New Snoski variants (e.g., chili mango, jamun) are gaining traction; management is building a portfolio of 3–4 solid P&A brands rather than a one-brand strategy.
UK FTA scotch tailwind: Management expects a favorable impact from lower scotch prices but notes the rupee has depreciated ~20% vs. GBP over the past year, limiting the overall benefit; focus remains on execution.
Capex and capital discipline: No ENA/ethanol capacity expansion planned; maintenance capex is ₹50–60 crores/year. P&A growth is self-funded from manufacturing and R&O cash flows, with debt paydown continuing.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Manufacturing EBITDA per litre | INR5–7/litre for FY27 | Q1 delivered ₹6.5; supported by FCI fixed-price raw material, limited maize hedging, and flexi-price ENA business |
| R&O EBITDA margin | 15–17% | State mix shift toward UP (lower margin than Rajasthan) will bring margins toward the lower end; PET/glass inflation already absorbed in Q1 |
| Capacity utilization | ~85% (guidance); 89% in Q1 | No capacity expansion through FY29; installed capacity stays ~334 million litres |
| P&A profitability | "Sooner rather than later" | P&A improved from ~-60% margin two years ago to near breakeven; states reach profitability in 3rd year |
| West Bengal R&O launch | Q2 FY27 (current quarter) | Final regulatory approvals expected this quarter; market re-entry within ~60 days of approvals |
| Bihar prohibition reversal | 1–2 years | Management expectation, not a committed timeline; reversal expected under new Chief Minister |
| Core state count | ~10 in a couple of years | Currently 4 core P&A states, with 6 being driven toward core status |
Risks & Constraints
| Risk | Context |
|---|---|
| Input cost inflation | Glass/PET costs are up 10–17% depending on brand/pack and are expected to persist; agri-commodity prices are seasonally inflationary in Q2. Mitigated by FCI fixed-price supplies, maize hedging, and flexi-price ENA business; Q3/Q4 typically see price reversal post-harvest. |
| Ethanol oversupply | Industry has significant overcapacity at E20 blending levels; however, flexible ENA/ethanol facilities achieved record 89% utilization, aided by international ENA sales. E20 demand is expected to grow ~7–7.5% in line with petrol. |
| Regulatory delays | West Bengal R&O entry remains pending final regulatory approvals; slippage of 1–2 months possible. Management sees worst-case status quo for market environment. |
| UK FTA benefit offset | Rupee depreciated ~20% vs. GBP over the past year, limiting the gross margin benefit from lower scotch prices; actual impact will emerge as inventory transitions. |
| UP R&O margin mix | UP carries lower margins than Rajasthan; mix shift could pull R&O EBITDA margin toward the lower end of 15–17% guidance, though absolute EBITDA should still grow. |
| Monsoon deficit | Rainfall deficit in eastern/north India could pressure raw material prices; management has secured inventory and hedges, expecting no material impact on FY27 guidance. |
Q&A Highlights
Ethanol demand drivers and E20 controversy
- Question: How will ethanol demand evolve given the E20 engine-damage controversy and potential cooking-fuel use? (Abneesh Roy, Nuvama)
- Answer: Cooking-fuel adoption will be slow; the main driver remains E20 blending, growing ~7–7.5% with petrol. Auto manufacturers and petrol companies have clarified there is no engine damage. Despite industry overcapacity, Globus achieved record 89% utilization due to flexible ENA/ethanol production and rising overseas prices. (Shekhar Swarup)
Bihar prohibition and glass inflation
- Question: Any timeline for Bihar prohibition reversal? What is the impact of glass inflation? (Abneesh Roy, Nuvama)
- Answer: Prohibition in Bihar will "be a thing of the past"; change expected within 1–2 years of the new Chief Minister. Glass/PET cost-push is 10–17% depending on brand and pack and is expected to stay for a while; being managed across the portfolio. (Shekhar Swarup; Paramjit Singh Gill)
UK FTA and scotch cost benefit
- Question: Will lower scotch prices expand gross profit, given your whisky-heavy portfolio? (Nitin Awasthi, InCred)
- Answer: Expect a tailwind as inventory transitions, but partners could revise base prices; too early to quantify. Rupee depreciation of ~20% vs. GBP over the last year means the overall impact will not be significant; management remains focused on execution. (Paramjit Singh Gill; Shekhar Swarup)
West Bengal R&O status
- Question: What is the status of West Bengal R&O amid regulatory changes? (Nitin Awasthi, InCred)
- Answer: Final regulatory approvals are pending; management is confident of securing them this quarter, with market re-entry within ~60 days. The market environment will apply to all players; worst case is status quo, not unfavorable. (Paramjit Singh Gill)
Capacity utilization and next capex cycle
- Question: How much volume growth is possible without capacity expansion? When does the next capex cycle become necessary? (Parth Soda, Trinetra Asset Managers)
- Answer: No plans to increase ENA/ethanol capacity; maintenance capex is ₹50–60 crores/year. Installed capacity is ~334 million litres, and no significant capacity change is planned within the FY29 strategy. (Shekhar Swarup)
Debt and manufacturing margin trend
- Question: What is the June 2026 debt number? Why did manufacturing EBITDA/litre decline, and where are raw material prices heading? (Himanshu Shah, Dolat Capital)
- Answer: Net debt is ₹650 crores vs. ₹660 crores in March 2026. EBITDA/litre of ₹6.5 is firmly within the INR5–7 guidance; Q2 is seasonally inflationary for agri commodities but already budgeted, with maize and FCI cover secured. No red flags versus prior years. (Nilanjan Sarkar; Shekhar Swarup)
R&O margin outlook with UP mix shift
- Question: Should R&O margins be impacted by PET inflation and the fast-growing UP business? (Himanshu Shah, Dolat Capital)
- Answer: The UP mix is more meaningful than PET costs; UP carries slightly lower margins than Rajasthan. R&O EBITDA margin guidance is 15–17% (down from recent 17–18% levels); no structural impact, and PET inflation was absorbed in Q1. (Shekhar Swarup; Paramjit Singh Gill)
UP R&O ramp-up trajectory
- Question: Should we pencil in ~0.1 million cases/month incremental growth in UP R&O? Will absolute EBITDA grow with normalizing margins? (Hardik Jatheliya, ARDEKO PMS)
- Answer: Management cannot quantify quarterly additions; UP is a ~95 lakh cases/month market and remains the next big bankable R&O opportunity with aggressive growth targeted. R&O margins should stay in the 15–17% band with absolute EBITDA growing. (Paramjit Singh Gill)
Expense growth vs. shareholder returns
- Question: How will you balance rising operating expenses, funding needs, and dividends? (Sucrit Patil, Eyesight Fintrade)
- Answer: P&A is entirely self-funded from manufacturing and R&O cash flows; no further capacity capex is planned. P&A has improved from ~-60% EBITDA margin two years ago to near breakeven and should reach profitability soon; debt paydown will continue while maintaining balance sheet discipline. (Shekhar Swarup)
UP plant utilization and Haryana/Assam/Jharkhand outlook
- Question: What is UP plant utilization? When will Haryana R&O scale, and how are Assam/Jharkhand progressing? (Nishant Bhatt, Equity Works Limited)
- Answer: UP utilization is above 90%. Haryana R&O will see only modest growth over the next 2–3 quarters; focus is on aggressive UP growth and West Bengal re-entry. Delhi re-entry is restarting via the tender route. Assam and Jharkhand P&A are showing strong consumer and trade acceptance. (Nilanjan Sarkar; Paramjit Singh Gill)
Key Takeaway
Globus Spirits delivered a strong Q1 FY27, with revenue up 13% YoY to ₹789 crores, EBITDA up 33% to ₹79.5 crores (10% margin), and PAT up 49% to ₹27.6 crores, aided by record manufacturing utilization of 89% and broad-based consumer growth — P&A revenue climbed 35% YoY with volumes up 45%, while R&O grew steadily at 10% with UP volumes up 2.4x to 0.2 million cases/month. Management remains disciplined on capital, guiding to INR5–7/litre manufacturing EBITDA and 15–17% R&O margins, with no capacity expansion planned. Strategic focus is on scaling UP R&O, deepening P&A across core/emerging markets (targeting ~10 core states), and re-entering West Bengal R&O this quarter. Key watch points include input cost inflation (glass/PET up 10–17%), potential UK FTA benefits partly offset by rupee depreciation, and the pace of regulatory approvals in West Bengal. Overall, the company is building toward a higher-quality, consumer-led alcobev platform with manufacturing depth and balance sheet discipline.