Tilaknagar Industries recorded its highest-ever sales in Karnataka during July 2026, marking a significant milestone in the company's expansion within India's largest India Made Foreign Liquor (IMFL) market. The surge was primarily driven by its Imperial Blue brand, which delivered substantial volume growth and market share expansion, reinforcing the company's leadership position in the state's premium spirits segment. The disclosure was made pursuant to Regulation 30 of the SEBI (LODR) Regulations 2015 on August 6, 2026.

Karnataka Sales Performance

Tilaknagar Industries reported total sales of 3 lakh cases in Karnataka for the month, representing a year-on-year growth of approximately 30%. This performance coincided with the company achieving its highest-ever secondary sales in the state, leading to a 40% market share in the Prestige & Above (P&A) category for July 2026. These figures indicate robust retail off-take and effective distribution execution across the state.

Imperial Blue emerged as the primary growth driver, achieving record volumes exceeding 1.5 lakh cases, representing a year-on-year growth of over 50% compared to the corresponding period. Consequently, the brand expanded its market share to 43% in the Deluxe Whisky segment. Nishant Jain, Chief Sales Officer at Tilaknagar Industries, attributed this success to the strength of the expanded portfolio, disciplined execution, and deep consumer connect. He noted that the integration of Imperial Blue into the company's operations has been successful, leveraging a strong distribution network to scale the brand.

The following table summarises the key performance metrics for Karnataka in July 2026:

Market Context and Strategic Positioning

The sales milestone occurs against the backdrop of a revised excise policy in Karnataka, which is expected to create a more balanced and growth-oriented operating environment for the alcoholic beverage industry. The policy framework is anticipated to encourage premiumization, benefiting established players with strong brands and extensive distribution capabilities. Tilaknagar Industries is capitalizing on this shift through its luxury vertical, House of TI, which is positioned to address growing demand for premium and luxury spirits.

This achievement follows another regional success in South India, where Tilaknagar Industries became the largest IMFL player in Telangana in the quarter ending June 2026. The company continues to strengthen its presence across key markets through consistent execution and brand building.

What the Numbers Show

The data reveals a clear premiumization trend within Tilaknagar Industries' Karnataka operations. While overall company sales grew by approximately 30%, the flagship brand Imperial Blue grew at more than double that rate at over 50%. The company's market share in the Prestige & Above segment at 40% and the Deluxe Whisky segment at 43% indicates that growth is not merely volume-driven but also value-driven. This divergence suggests that the integration of Imperial Blue has successfully shifted the company's portfolio mix towards higher-margin categories, aligning with the broader industry shift towards premium spirits facilitated by the new excise policy.

Tilaknagar Industries reported a consolidated net revenue of ₹1,046 crore for the quarter ended June 30, 2026, marking its first-ever quarterly crossing of the ₹1,000 crore threshold. This represents a 166% year-on-year increase from ₹394 crore in the prior year period, driven by a 172% jump in volumes to 8.7 million cases following the full-quarter impact of the Imperial Blue acquisition. However, statutory auditors Harshil Shah & Company issued a qualified conclusion on the unaudited results due to the company’s failure to carry out an impairment assessment of one of its ENA plants, despite indications of impairment. The qualification persists from the audited financial statements for the year ended March 31, 2026.

The Board of Directors approved the unaudited financial results on July 27, 2026. The filing, submitted under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, was published in Business Standard and Kesari on July 29, 2026. Management expects to restart the grain distillery plant after incurring relevant capital expenditure, leading to the belief that no impairment is required. The auditors also noted that the Group has not recognized losses in the statement of comprehensive income regarding its share of loss in an associate/joint venture in earlier periods.

Financial Performance

Consolidated revenue from operations stood at ₹1,046 crore for the quarter, compared to ₹394 crore in the year-ago period. Adjusted for subsidy income, net revenue was ₹1,026 crore, growing at 189%. EBITDA grew by 79% to ₹169 crore from ₹94 crore, with an EBITDA margin of 16.10% compared to 23.61% in the prior year period. Adjusted for subsidy income, EBITDA stood at ₹148 crore, representing a 166% year-on-year growth with a margin of 14.5%. Excluding the impact of inflationary pressure, the margin would have been approximately 17%.

Profit before tax increased by 9% to ₹96 crore. After accounting for exceptional items totaling ₹30.11 crore related to post-acquisition integration costs for the Imperial Blue business, and tax expenses, the reported net profit was ₹31.59 crore. However, adjusted profit after tax (PAT), excluding exceptional items and amortization related to the acquisition, rose 52% to ₹76 crore.

*Excluding exceptional items and amortization related to Imperial Blue acquisition.

Operational Highlights and Integration Status

Volumes grew by 172% year-on-year to reach 8.7 million cases. On a quarter-on-quarter basis, total volumes rose by 9%, led by Imperial Blue (IB), which recorded 17.7% growth. IB expanded its market share across India by approximately 150 basis points quarter-on-quarter, with significant improvements in North, West, and South regions. The brand crossed 2 million cases in both May and June 2026. Mansion House Brandy (MHB) reached 2.6 million cases, reflecting growth of over 7% year-on-year.

Amit Dahanukar, Chairman & Managing Director, stated that ~90% of IB operations have been transitioned out of the Transition Services & Manufacturing Agreement (TSMA), leaving only one state to be completed. Consequently, exceptional costs relating to the transition are expected to reduce significantly over the remainder of FY27, with average monthly TSMA expenses halving to ~₹8 crore. In Karnataka, management noted a good uptake in volumes following price reductions, with significant improvement in market shares.

Balance Sheet and Debt Structure

The company's gross debt decreased slightly to ₹2,241 crore from ₹2,295 crore in March 2026, primarily due to a reduction in working capital loans from ₹230 crore to ₹175 crore. However, cash and cash equivalents dropped significantly from ₹384 crore to ₹141 crore, resulting in an increase in net debt to ₹2,100 crore. The term loan component remained stable at ₹2,041 crore. This term loan has a six-year period with a two-year principal moratorium, followed by a balloon repayment structure where 65% of the principal is due in the sixth year. The effective interest rate on the term loan is ~10%-11%.

Management Guidance and Strategic Priorities

During the concall, management outlined key strategic priorities and financial targets for the near and medium term. The company's strategic focus includes generating demand for its brands to deliver double-digit volume growth, expanding the luxury and premium portfolio by leveraging the pan-India distribution strength of Imperial Blue and Mansion House, and increasing trade and consumer engagements for Imperial Blue.

On the volume and revenue outlook, the combined business is expected to achieve high-single-digit to low-double-digit volume growth for FY27, with an upgrade to mid-teens annual volume growth for the next couple of years from FY28 onwards, supported by new launches. Revenues are projected to grow at least 300 basis points higher than volume growth. A price increase is also expected in Telangana in Q2, which could provide an incremental margin impact of 150 to 200 basis points on an annualized basis.

On the debt and margin front, the company aims to reduce net debt from ₹2,100 crore in Q1FY27 to approximately ₹1,700 crore by March 2027, targeting a net debt-to-EBITDA ratio below 1x by March 2029 through efficient capital deployment and disciplined debt management. Consolidated EBITDA margins are targeted to reach 16% to 18% by FY29 with an upward bias, improving from the 15.5% base set in Q4FY26 for FY27. This improvement is expected to be driven by optimizing packaging, processes, and supply chain, leading to operating leverage and economies of scale. Cost savings from packaging changes and customs reductions under the India-UK FTA are also expected to contribute 250–400 basis points in margin expansion on the acquired business.

Corporate Developments

The Board appointed Ms. Bhumika Batra as an Additional Independent Director for a term of three years, commencing July 27, 2026, subject to shareholder approval. Additionally, the Board approved the incorporation of a wholly-owned subsidiary in Nigeria, pending regulatory approvals. The company continues to pursue the Composite Scheme of Amalgamation involving subsidiaries Punjab Expo Breweries Private Limited and Vahni Distilleries Private Limited, awaiting approvals from shareholders, creditors, and the National Company Law Tribunal (NCLT). Tilaknagar also increased its stake in Bartisans to 41.45% through a ₹2 crore primary infusion, aiming to capitalize on the growing cocktail culture and q-commerce momentum.