Allied Blenders and Distillers Limited (MAINBOARD)

About Company

Incorporated in 2008, Allied Blenders and Distillers is an Indian-made foreign liquor company that offers a diverse portfolio of whisky, brandy, rum, and vodka, along with packaged drinking water under brands like Officer's Choice, Officer's Choice Blue, and Sterling Reserve. Notably, Officer's Choice Whisky, introduced in 1988, has been one of the top-selling whisky brands globally from 2016 to 2019. The company's products reach 22 international markets, including regions such as the Middle East, the Americas, Africa, Asia, and Europe. Allied Blenders operates a distillery in Rangapur, Telangana, spanning 74.95 acres with a built-up area of over 25,000 square meters, and boasts an in-house distillation capacity of 54.75 million litres of extra neutral alcohol (ENA) annually. Furthermore, as of December 2022, the company utilizes 30 bottling facilities across India, combining both owned and contract bottling, to support its extensive bottling operations.

Strength Factors

Market Leadership and Diversified Portfolio: Allied Blenders and Distillers is the largest Indian-owned IMFL company and the third largest in India by annual sales volumes from Fiscal 2014 to Fiscal 2022. The company offers a contemporary and diverse product portfolio, including whisky, brandy, rum, and vodka.

Strong Brand Recognition: The company's flagship product, Officer’s Choice Whisky, dominates the mass premium segment with a 20.9% market share in Fiscal 2023. Significant investments in brand strength and appeal have solidified its market leader status.

Strategically Located Manufacturing and R&D Facilities: Allied Blenders operates a large-scale distillery in Rangapur, Telangana, with an in-house distillation capacity of 600 lakh litres of extra neutral alcohol annually. The company also has extensive bottling capabilities across India, utilizing both owned and third-party facilities to ensure a robust pan-India presence.

Risk Factors

Dependence on Whisky Sales: The company is highly dependent on its whisky products, which accounted for over 95% of its revenue from operations from Fiscal 2021 to 2023. A decline in whisky sales could significantly impact its financial health and business prospects.

Profit Volatility: Allied Blenders and Distillers has experienced fluctuations in profit after tax (PAT) and PAT margins, indicating financial instability. There is no assurance of future improvement, which could affect its ability to generate consistent returns.

Regulatory Risks: The company's operations are heavily regulated by both Central and State authorities. Changes in the regulatory environment could lead to increased costs or restrictions on business activities, adversely affecting operations.