GLOBUSSPR - Globus Spirits Limited Share Price

Management Outlook and Key Points:

Manufacturing Business Outlook:

• Margins Recovery Expected: Post-Q3 challenges, margins are projected to improve to Rs.5-7/liter (long-term average ~Rs.7) due to FCI rice pricing (Rs.58.5/liter ethanol) and reduced raw material volatility. Capacity utilization is expected to rise post-maintenance (Q4) and stabilize in FY26.
• Strategic Flexibility: Ability to shift production between ENA and ethanol optimizes margins. Corn oil plant commissioning (West Bengal) and maize procurement strategies will enhance efficiency.

Consumer Business Outlook:

• Regular Category (Country Liquid): 22% YoY growth in Q3; Rajasthan price hikes (4.35%) to boost margins. UP expansion (volume-driven initially) to gain traction, with distillery commissioning (Q2 FY26) improving margins later.
• Prestige & Luxury (IMFL): Achieved 245% YoY revenue growth (best-ever quarter); targeting breakeven in FY25. Dedicated luxury division (Terai, DÅŒAAB) focusing on premium launches and UP market penetration. IMFL revenue expected to exceed Rs.200 crore run rate by FY26.

Strategic Initiatives:

• Geographic Focus: Targeting 9 states (UP, Delhi, Bengal prioritized) for IMFL growth. UP to become a key volume driver.
• Operational Efficiency: Malt spirit plant commissioned; UP multi-feed distillery (Q2 FY26) to enhance supply security and margins.
• Raw Material Stability: FCI rice supply and maize procurement (warehousing secured) to reduce cost volatility.

Financial Targets:

• Debt Reduction: Anticipate strong cash flow (stable manufacturing margins, consumer business scale) to reduce leverage.
• Long-Term Vision: IMFL revenue target of ~Rs.500 crore in 3-4 years; manufacturing to prioritize ethanol/ENA flexibility.

Summary: Management remains confident in balanced growth across manufacturing (margin recovery) and consumer segments (volume + premiumization), supported by strategic investments in capacity, raw material security, and market expansion.

Question 1:
Viraj Mehta (Enigma Investment Partners): "Congratulations for great numbers. My first question is in your IMFL business. For the first time, we have grown significantly. We have passed Rs. 100 crores for nine months. And we think we might do Rs. 120 crores"“Rs. 130 crores this year. Can you give what the milestone that we're looking for next year in terms of revenue?"

Answer:
Management expects strong growth in FY26 due to favorable excise policies in Rajasthan and Uttar Pradesh, though not as high as FY25's surge. Revenue is projected to exceed a Rs. 200 crore annualized run rate by year-end but will not cross Rs. 200 crore for FY26. UP's distillery commissioning in Q2 FY26 will improve margins for regular category sales.

Question 2:
Viraj Mehta (Enigma Investment Partners): "Second question is with the ENA and ethanol business... Is it fair to assume that next year we should be running our facilities at 80%, 85%, 90% utilization for the full year?"

Answer:
Capacity utilization is expected to rise to near-full levels in FY26 as maintenance activities were prioritized in Q3/Q4 FY25. Margins are projected to stabilize at Rs. 7 per liter due to reduced raw material price volatility, supported by FCI's fixed rice pricing and maize procurement strategies.

Question 3:
Viraj Mehta (Enigma Investment Partners): "In country liquor, sir, you just have got price hike in Rajasthan... Is it fair to assume that a significant portion of that will directly flow down to our EBITDA?"

Answer:
The 4.35% price hike in Rajasthan will largely benefit EBITDA, though mix variations and UP's lower-margin volumes (pre-distillery commissioning) may pressure margins temporarily. Rajasthan's volume growth is expected in single digits, while UP's contribution will expand.

Question 4:
Dhaval Desai (Total Capital): "Our understanding is that it's a business where... how do we intend to get into that market and scale up?"

Answer:
UP's market entry focuses on route-to-market efficiency, brand visibility, and consumer trends. Initial volumes (13,000 cases/month) are testing demand. A dedicated distillery in Q2 FY26 will align UP margins with Rajasthan's historical averages (16"“17%).

Question 5:
Dhaval Desai (Total Capital): "With the new policy regime, you expect less volatility in margins... will it be incremental every quarter or a straight jump?"

Answer:
Margins will stabilize as FCI's fixed rice pricing and maize procurement reduce raw material volatility. Ethanol margins are tied to raw material costs, with long-term stability expected. Rs. 7 per liter EBITDA is projected for FY26, aided by policy-driven price ceilings/floors.

Question 6:
Vedant Bhasin (Minerva Asset Advisors): "In country liquor... margins reported (~17"“18%) are higher than competitors. Is this a state-specific advantage?"

Answer:
Rajasthan's 16"“17% EBITDA margins reflect full integration and brand strength. UP's initial lower margins will align with Rajasthan post-distillery commissioning. The company prioritizes states where margins are sustainable.

Question 7:
Nitin Awasthi (InCred Research): "On the IMFL side... will per-case realization grow with brand mix?"

Answer:
Growth will focus on luxury/premium segments (e.g., Terai, DÅŒAAB) to elevate net sales value. Current sales skew toward deluxe categories, but premium/luxury launches will drive future NSV growth.

Question 8:
Ankit Gupta (Bamboo Capital): "How do you see marketing spends for IMFL as profitability nears?"

Answer:
Marketing investments (~Rs.15"“30 crore annually) are tapering as gross profits offset spends. The prestige segment aims for breakeven in FY26, with at least one quarter of positive contribution expected.

Question 9:
Kiran (Table Tree Capital): "What drives IMFL's revenue surge (e.g., specific brands)?"

Answer:
Growth is led by Snoski vodka, Mountain Oak whiskey, and Brothers whisky. Luxury brands (DÅŒAAB, Terai variants) are projected to accelerate growth, with premiumization driving future NSV.

Question 10:
Anil Shah (Insightful Investments): "What are the 3"“5 year growth drivers?"

Answer:
Prestige/above categories (targeting Rs.500 crore revenue) and UP's regular segment expansion are key drivers. Manufacturing margins will stabilize, while consumer businesses (IMFL/country liquor) will generate cash flow for debt reduction.