Som Distilleries & Breweries Limited (SDBL) has announced the completion of its acquisition of Woodpecker Greenagri Nutrients Private Limited (WGNPL), marking a significant expansion of its alcoholic beverage manufacturing capabilities. The acquisition transforms WGNPL into a wholly-owned subsidiary of SDBL, with a focus on an integrated Alcobev manufacturing project in Farrukhabad, Uttar Pradesh.

Strategic Expansion

The acquisition is set to unfold in two phases:

1. Phase I: Establishment of a brewery

   • Enhances SDBL's product availability in Uttar Pradesh and the northern region
   • Aims to boost sales and market reach of SDBL's beer brands

2. Phase II: Addition of a distillery

   • Further strengthens SDBL's production capabilities
   • Expands the company's product portfolio

Acquisition Details

• Shareholding: SDBL has acquired 100% of WGNPL's share capital
• Consideration: Cash transaction, with shares acquired at par value
• Regulatory Approvals: No additional governmental or regulatory approvals were required for the acquisition

Strategic Benefits

The integration of WGNPL as a wholly-owned subsidiary is expected to yield several benefits for SDBL:

• Better operational alignment
• Streamlined decision-making processes
• Enhanced strategic integration
• Optimal utilization of resources
• Improved governance
• Unified approach towards future expansion

Related Party Transaction

The acquisition is classified as a related party transaction due to common directorship. However, SDBL has stated that any transactions with the new subsidiary will be conducted on an arm's length basis, ensuring fairness and transparency.

Market Impact

This strategic move by Som Distilleries & Breweries Limited is likely to strengthen its position in the alcoholic beverage market, particularly in North India. The expanded manufacturing capabilities and improved distribution network could potentially lead to increased market share and revenue growth for the company.

Som Distilleries & Breweries Ltd reported mixed results for the second quarter of fiscal year 2026, with strong growth in its Indian Made Foreign Liquor (IMFL) segment offsetting a decline in beer volumes.

Financial Highlights

• Total income for Q2 FY2026 stood at Rs. 2,700.00 million
• EBITDA grew by 15.1% to Rs. 405.00 million
• Net profit reached Rs. 195.00 million

Segment Performance

Beer Segment

• Beer volumes declined by 19% year-on-year to 35.70 lakh cases
• Despite the volume decline, beer accounted for 89.7% of total volumes and 80.5% of revenue in Q2 FY2026
• Price realization for beer improved to Rs. 607.00 per case, up from Rs. 531.00 in Q2 FY2025

IMFL Segment

• IMFL portfolio witnessed a robust 65% volume growth
• IMFL realization was Rs. 939.00 per case, compared to Rs. 1,038.00 in Q2 FY2025
• The strong performance was driven by the launch of the new whiskey brand, Mahavat

Operational Insights

The company attributed its resilient performance to:

1. Favorable mix of older glass bottles
2. Softening of key raw material and packaging material prices
3. Stable costs of key raw materials and packaging materials during the quarter

Management Commentary

While Som Distilleries did not provide specific management quotes, the results suggest that the company's strategy of diversifying its product portfolio is paying off. The strong growth in the IMFL segment, particularly with the new Mahavat whiskey brand, has helped offset the challenges faced in the beer segment.

Future Outlook

Som Distilleries appears to be well-positioned to capitalize on the growing demand for premium alcoholic beverages in India. The success of the Mahavat whiskey launch indicates the company's ability to innovate and expand its product offerings in the competitive IMFL market.

As Som Distilleries continues to navigate the evolving market dynamics, investors will be watching closely to see if the beer segment can recover while maintaining the momentum in the IMFL portfolio.

Note: All financial figures are in Indian Rupees (INR).