Allied Blenders & Distillers Limited has delivered impressive profitability growth in Q3FY26, demonstrating operational efficiency despite facing revenue headwinds. The company's Board of Directors approved the unaudited financial results for the quarter and nine months ended December 31, 2025, during their meeting held on January 29, 2026.

Strong Profit Growth Amid Revenue Decline

The company's standalone performance for Q3FY26 showed remarkable profit expansion despite challenging top-line conditions. Net profit after tax surged 33.9% year-on-year, reflecting improved operational efficiency and cost management.

Nine-Month Performance Shows Sustained Growth

The nine-month period ended December 31, 2025, demonstrated the company's ability to maintain strong profitability trends across an extended timeframe. Net profit growth of 77.2% significantly outpaced the revenue decline, indicating effective margin management.

Cost Structure and Operational Efficiency

The company's expense management contributed significantly to profit growth. Cost of materials consumed increased to ₹56,011.25 lakhs in Q3FY26 from ₹49,709.17 lakhs in Q3FY25. However, excise duty on sales decreased substantially to ₹92,149.15 lakhs from ₹1,36,844.50 lakhs year-on-year. Employee benefits expense rose to ₹4,857.55 lakhs compared to ₹4,399.21 lakhs in the previous year quarter.

Ongoing Legal Challenges

The company continues to address significant legal matters that could impact future operations. A customer dispute with Canteen Stores Department involves a contested claim of ₹3,398.72 lakhs related to differential trade rates for sales made during March 2012 to October 2017. The matter is currently under arbitration with the next hearing scheduled for June 10, 2026.

Additionally, Allied Blenders faces income tax demands totaling ₹35,231 lakhs plus interest of ₹24,914 lakhs following assessment orders for multiple years. The Income Tax Department has granted a 90% stay on these demands, allowing the company to deposit the balance in installments.

Recent Corporate Developments

The company has undertaken several strategic initiatives during the period. In June 2025, Allied Blenders completed the acquisition of 100% stake in UTO Asia Pte. Ltd. for EUR 1,225,000. The Board also approved a Scheme of Amalgamation involving two subsidiary companies, subject to regulatory approvals. Post-quarter end, the company approved acquisition of distillery assets in Uttar Pradesh for up to ₹7,000 lakhs.

Exceptional Items and Regulatory Changes

The company recognized an exceptional expense of ₹318.74 lakhs during Q3FY26 related to the impact of new Labour Codes notified by the Government of India in November 2025. These codes affected past service costs for gratuity and leave encashment due to revised wage definitions.

Allied Blenders & Distillers Limited announced that its Nomination and Remuneration Committee (NRC) has approved the grant of 3,200,000 stock options under the ABD Employee Stock Option Scheme-2024. The decision was made during the NRC meeting held on January 23, 2026, which concluded at 02:50 P.M. (IST).

Stock Option Grant Details

The comprehensive stock option grant encompasses significant value for eligible employees across the organization. The company has structured this initiative under its established Employee Stock Option Scheme framework.

Vesting Schedule and Structure

The stock options follow a systematic 4-year vesting schedule designed to balance retention and performance incentives. The vesting structure incorporates both time-based and performance-based components to align employee interests with company objectives.

Exercise Terms and Conditions

Once vested, employees have a four-year window to exercise their stock options from the respective vesting dates. This extended exercise period provides flexibility for employees to optimize their decision timing based on market conditions and personal financial planning.

The scheme operates under the ABD Employee Stock Option Scheme-2024 framework, ensuring compliance with regulatory requirements and corporate governance standards. The company has structured the program to align with SEBI regulations governing share-based employee benefits.

Regulatory Compliance

The stock option grant fulfills all requirements under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015. The company has provided comprehensive disclosure details as mandated by SEBI Master Circular No. SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024.

This employee stock option initiative represents Allied Blenders & Distillers' commitment to employee retention and performance-based compensation structures. The substantial grant of 3.2 million options demonstrates the company's confidence in its workforce and long-term growth prospects.