1. At a Glance
Allied Blenders & Distillers Ltd (ABDL) is the ₹12,499 Cr spirits maker behind Officer’s Choice and Sterling Reserve. Five-year profit has compounded at 104% CAGR to ₹195 Cr PAT in FY25, but at ₹447 the stock trades at 64× P/E versus a fair-value range of ₹104–140 (EPS 6.97 × 15–20).
2. Introduction with Hook
Imagine turning hooch into gold—that’s Allied Blenders’ speciality. From ₹13 Cr profit in FY20 to ₹195 Cr in FY25, the company has delivered a profit CAGR of 104%. But when a distiller trades at 64× trailing earnings, even whisky connoisseurs might cringe. Is this premium price justified, or is the bubble about to burst?
3. Business Model (WTF Do They Even Do?)
- Product Portfolio: Whisky (Officer’s Choice, Officer’s Choice Blue), Brandy, Rum, Gin, Vodka across mass-premium to deluxe segments.
- Manufacturing Footprint: Plants at Derabassi (Punjab), Rampur (Himachal), and contract manufacturing tie-ups for regional brands.
- Distribution Network: Pan-India reach via 300+ distributors and direct partnerships with state excise authorities.
- Brand Extensions: ICONiQ White (vodka), Sterling Reserve (premium whisky), plus recent forays into flavoured spirits.
- Acquisitions & Partnerships: EUR 1.225 M acquisition of UTO Asia for Mansion House and Savoy Club brand rights.
4. Financials Overview – Profit, Margins, ROE, Growth
- Revenue: ₹3,520 Cr in FY25 (3% CAGR over 5 years)
- PAT: ₹195 Cr in FY25 vs. ₹2 Cr in FY20 (104% 5-yr CAGR)
- OPM: Expanded from 6% (FY24) to 12% (FY25) thanks to premiumisation and operating leverage
- ROE: 20% in FY25; up from 0.07% in FY24
- ROCE: 21% in FY25; improving from 16% in FY24
5. Valuation – Is It Cheap, Meh, or Crack?
- TTM EPS: ₹6.97 (FY25 PAT ₹195 Cr ÷ ~28 Cr shares)
- Current P/E: 64×
- Sector Median P/E: ~30×
- Fair Value Range:
- Lower: 15× EPS = ₹6.97 × 15 ≈ ₹104
- Upper: 20× EPS = ₹6.97 × 20 ≈ ₹140
- Conclusion: Trading at ₹447, the stock is >3× our upper fair-value estimate—signalling froth.
6. What’s Cooking – News, Triggers, Drama
- Premium Push: Launch of Russian Standard Vodka variants in India (Jun ’25).
- Global Rights: Full acquisition of UTO Asia, enabling Mansion House and Savoy Club launches.
- Fund Raise: ₹1,000 Cr QIP approved in May ’25 for capacity expansion.
- Tax Appeal: Facing ₹352 Cr demand orders; appeals filed—outcome could swing earnings.
- Dividend Hike: Recommended ₹3.60/share (52% payout) in FY25 after five years of nil dividends.
7. Balance Sheet – How Much Debt, How Many Dreams?
- Equity Capital: ₹56 Cr (FV ₹2)
- Reserves: ₹1,487 Cr (up 316% since FY20)
- Borrowings: ₹905 Cr (vs. ₹793 Cr in FY23)
- Net Debt: ₹905 Cr – ₹61 Cr cash = ₹844 Cr (moderate)
- Debt/Equity: ~0.61× (industry average ~0.5×)
8. Cash Flow – Sab Number Game Hai
- Operating CF: –₹678 Cr in FY25 (one-off destocking & ramped capex)
- Investing CF: –₹182 Cr (capacity expansions at Derabassi)
- Financing CF: +₹922 Cr (QIP fund raise)
- Free Cash Flow: Negative in FY25; watch for stabilization once brownfield capex completes.
9. Ratios – Sexy or Stressy?
| Ratio | FY24 | FY25 | Comment |
|---|---|---|---|
| Debtor Days | 136 | 181 | Ballooning—potential working capital risk |
| Inventory Days | 124 | 196 | Elevated due to bulk stocking for Diwali |
| Payable Days | 204 | 206 | Stable supplier financing |
| Cash Conversion Cycle | 57 | 172 | Stress on liquidity |
| ROCE | 16% | 21% | Improved capital efficiency |
| Dividend Yield | 0.15% | 0.80% | Dividend resumption adds shareholder cheer |
10. P&L Breakdown – Show Me the Money
| Segment | FY21 Sales | FY25 Sales | 5-Yr CAGR | FY21 PAT | FY25 PAT | % of PAT |
|---|---|---|---|---|---|---|
| Whisky & Brandy | ₹2,348 Cr | ₹3,520 Cr | 10% | ₹3 Cr | ₹195 Cr | 100% |
| Rum, Gin & Vodka | — | — | n/a | — | — | — |
| Corporate/Exports | — | — | — | — | — | — |
| Note: Company discloses consolidated figures—majority of PAT from core spirits business. |
11. Peer Comparison – Who Else in the Game?
| Company | CMP | P/E | ROE | Mar Cap (₹ Cr) |
|---|---|---|---|---|
| Allied Blenders | 447 | 64× | 20% | 12,499 |
| United Spirits | 1,358 | 61× | 21% | 98,745 |
| Radico Khaitan | 2,718 | 105× | 13.6% | 36,404 |
| United Breweries | 1,960 | 113× | 10.8% | 51,823 |
| Tilaknagar Inds. | 338 | 29× | 29.9% | 6,557 |
- Allied trades at a premium to most peers except UB; however, its ROE/ROCE improvements justify some uplift—but not 3× fair value.
12. Miscellaneous – Shareholding, Promoters
- Promoters: 80.9% (stable)
- FIIs: 2.7% (low)
- DIIs: 4.0% (modest)
- Public: 12.3%
- No. of Shareholders: ~1.09 Lakh
13. EduInvesting Verdict™
Allied Blenders has engineered a stellar turnaround—from ₹2 Cr loss in FY24 to ₹195 Cr profit in FY25—powered by premiumisation and capacity expansion. Yet at 64× trailing EPS, the stock is priced for perfection. Unless working‐capital metrics normalize and QIP capex yields strong free cash flow, this vintage may be overcooked.
Tags: Allied Blenders & Distillers, Spirits, Premiumisation, Fair Value, Financial Analysis, Peer Comparison, Debt Metrics, EduInvesting Verdict
