Shri gang industries and Allied Products Limited has informed the stock exchange about receiving significant tax demand notices from Uttar Pradesh tax authorities for the Financial Year 2022-23. The company disclosed this development under Regulation 30 of SEBI Listing Regulations on April 01, 2026.

Tax Assessment Details

The Deputy Commissioner, State Tax, Sikandrabad, Uttar Pradesh has issued tax assessment orders under two separate provisions:

The company received these orders on March 31, 2026, and has committed to filing appeals against the demand orders with appropriate authorities within the prescribed time limit.

Nature of Dispute

The tax assessment involves charging higher rates of VAT/CST on products sold by the company. Shri Gang Industries disputes this assessment and characterizes the demands as not maintainable based on their evaluation. The company is exploring all available legal options, including filing appeals against the orders.

Company's Response and Impact Assessment

The management has indicated that they do not anticipate any adverse impact on the company's financials, operations, or other activities. The company is currently evaluating all available options to contest the tax demands through appropriate legal channels.

This disclosure was made by Company Secretary and Compliance Officer Kanishka Jain as part of the company's regulatory compliance obligations under SEBI Listing Regulations.

Shri Gang Industries and Allied Products Limited has demonstrated strong operational performance in Q3 FY26, showcasing the benefits of its integrated alcobev manufacturing strategy and strategic partnership with global spirits leader Diageo. The company's investor presentation highlights significant progress across key financial and operational metrics.

Financial Performance Overview

The company delivered impressive quarterly results with net revenue reaching ₹114 crore in Q3 FY26, representing a substantial 28% increase compared to ₹89 crore in Q3 FY25. Sequential growth was even more pronounced, with revenue jumping 33% from ₹86 crore in Q2 FY26.

Profitability metrics showed significant improvement, with gross profit margin expanding to 37% in Q3 FY26 from 30% in the previous year, while EBITDA margin strengthened to 19% compared to 16% in Q3 FY25.

Nine-Month Performance Analysis

For the nine-month period ending December 2025, the company reported net revenue of ₹286 crore compared to ₹266 crore in 9M FY25, reflecting an 8% year-on-year growth. However, margin pressures were evident with EBITDA declining to ₹31 crore from ₹45 crore in the corresponding previous period.

Strategic Partnership and Manufacturing Capabilities

The company's exclusive manufacturing partnership with United Spirits Limited (Diageo) remains a cornerstone of its growth strategy. This long-term agreement covers production of premium IMFL and Scotch brands including Signature, McDowell's No.1, Royal Challenge, Antiquity Blue, VAT 69, Black Dog, Black & White, and Smirnoff Vodka for the Uttar Pradesh market.

Key operational highlights include:

• Manufacturing Capacity: 5.60 million cases annually with 10 bottling lines
• Diageo Commitment: 75% of bottling capacity dedicated to Diageo brands
• Distillery Expansion: Grain-based distillery capacity increased from 55 KLPD to 66 KLPD in 2025
• Integration Benefits: Fully integrated operations from ENA production to finished bottling

Growth Trajectory and Market Position

The company has demonstrated remarkable growth momentum since establishing its alcobev operations, with revenue CAGR of 59% and PAT CAGR of 84% from FY22 to FY25. The strategic location in Uttar Pradesh provides significant advantages, being situated in India's maize and rice belt while serving the country's largest and fastest-growing alcohol market.

Strategic Expansion Plans

The company is evaluating several growth initiatives including capacity expansion from 5.60 million cases to 10 million cases, phased distillery expansion to meet captive consumption needs, and discussions with third-party brands for contract manufacturing opportunities. The management is also exploring brand acquisition opportunities in the UPML/IMFL segments to strengthen its own brand portfolio, which currently includes "Golden Cascade" and "Bulldozer" in the UPML segment.

Financial Stability and Balance Sheet Strength

The company has significantly improved its financial position, with net worth turning positive in FY25 driven by consistent operational profitability. The debt-to-EBITDA ratio has improved dramatically from 14.50x in FY22 to 1.70x in FY25, while the company continues to generate annual cash profits exceeding ₹30 crore over the last two years. Promoter commitment remains strong with capital infusion through warrant subscription in FY26, demonstrating long-term confidence in the business prospects.