Globus Spirits Limited (GLOBUSSPR) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Globus Spirits Ltd. Q3 and 9M F526 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing start and zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Suryash Samund from Stellar Investor Relations Advisors. Thank you, and over to you, Mr. Samund.

Thank you. Good afternoon, everyone, and thank you for joining us today. We have with us today the Senior Management Team of Global Spirits Limited, Mr. Shekhar Swaroop, Joint Managing Director, Mr. Paramjit Singil, CEO of Consumer Division, and Mr. Nilandan Sarkar, Chief Financial Officer, who will represent Global Spirits Limited on the call. The management will be sharing the key operating and financial highlights for the quarter and nine months ended 31st December 2025 followed by a question and answer session. Please note, this call may contain some of the forward-looking statements which are completely based upon the company's beliefs, opinions, and expectations as of today. These statements are not a guarantee of the company's future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect developments that occur after the statement is made. The call will be limited to one hour. I now hand over the conference to Mr. Shekhar Swaroor. Thank you, and over to you, sir.

Good afternoon, everyone. Thanks for joining us on the Q3 nine-months earning call. Param and Nilanjan are also with me. Building on our earlier communications, we would like to reiterate our approach. Over the last few quarters, the company has transformed into an innovative and growing brands-led company, backed by a robust manufacturing backbone. We continue to build and strengthen the company to ensure consistent growth of our consumer business in the years to come. To this end, the board had passed a resolution for a fundraise, which is an enabling resolution. We have a one-year time frame for the resolution, and based on the requirement of the company and the right investor set, we will evaluate our options. These actions provide us the ability to finance the business, create innovative and world-class brands, and ensure industry-leading margins. And I will ask Param to walk you through the developments of the consumer business in detail shortly. Coming to our manufacturing business, which provides, besides providing us a stable supply and innovation platform, the manufacturing business also ensures high-capacity utilization of assets, thereby reducing cost of production for the consumer business. In the quarter gone by, we have consumed around 15 million liters of ENA and sold 52.25 million liters of ENA and ethanol, driving capacity utilization of 86% in the quarter gone by, which marginally exceeds our guidance of 80 to 85%. The bulk sales business, the manufacturing business, generated a margin of 7.5 rupees per liter in the quarter, EBITDA margin of 7.5 rupees per liter in the quarter, and an EBITDA margin of 5.76 per liter in the nine-month period. This is in line with our guidance of 5 to 7 rupees per liter for the year. We're expecting capitalization of our UP asset worth around 200 crore rupees in Q4, which will add a capacity of 100,000 meters per day of grain E&A production. The facility is also compatible to use molasses. This capacity will help further improve our margins of R&O and P&A portfolio in Uttar Pradesh. Over to you, Param.

Thank you, Shekhar, and good afternoon, everyone. Coming to consumer business, for Q3 FY26, Prestige and above reported a volume growth of 37% year-on-year and revenue growth of 32% year-on-year, excluding Delhi. Coming to Delhi, in Q2, we had mentioned that Delhi had certain issues. These issues have since been resolved during Q3, and volumes have already started normalizing, and we totally get into a normal stream by end of Q4. As you will recall, Delhi is one of the first three states where our consumer business has started, and hence the impact on our overall business has been a little more than normal. We are confident of 50% volume growth in the P&A segment in Q4 FY26, bringing us back on track. As we keep growing in geographies, the share of business of a single state reduces significantly, and therefore, our overall stability keeps improving. On new states, early reports from Assam, where we launched our two key brands, Mountain Oak as well as Brothers, are encouraging. As we continue to expand our presence there towards improving our presence in the overall northeast region, with Assam being the key anchor. Jharkhand will be the next state where we plan to enter by the end of Q4. We expect overall P&A to grow in the zone of about 50% in this quarter. Coming to RNO, Rajasthan recorded a volume growth of 2% year-on-year and revenue growth of 3% year-on-year in line with industry. UP has shown accelerated growth in Q3 with sale in December, breaching the $1,000,000 case mark. Overall, R&O segment volumes had flat growth year-on-year and revenue growth of 1% year-on-year. In Delhi, the excise policy of 24-25 ended in September 25, and since then, a new policy is awaited. In West Bengal, the company has decided to shift the bottling location, and that shift is already underway. This shift has been necessitated due to high labor costs in the previous setup, and we expect our overall R&O growth to remain in mid-single digits in Q4. With that, I request the moderator to open the forum for Q&A. Thank you.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes to the line of Abhinash Roy with Nuwama. Please go ahead.

Yeah, thanks. My first question is on gross margin as a company overall. I see around 150 with quarter-on-quarter expansion, find it with YOY. Any one-offs here? And from a near-term perspective, for Q4, how do you expect overall gross margins? You also said that you expect 50% growth in P&A for the quarter. So, if you could clarify, is this for Q4, 50% kind of growth expectation?

Thanks, Agnish. Thanks for the question, Agnish. The expansion in gross margins are for two reasons. One is a lower cost of raw material in Q3, which is in line with what we had expected, given the structural change in the raw material scenario in the country that transpired even in Q3. So that story is really playing out, continues to play out, and will remain this way. The other reason is, you know, as our P&E business grows, in fact, even as our R&O business continues to grow, overall gross margins will rise. So all of this is a structural improvement and not one-off. Param, over to you for Q4 P&A growth.

So, yes, your point, Agnish, was correct that we are projecting a 50% volume growth in P&A consumer business. And our margins in the consumer business, as we have indicated, are already in the zone of about 40-odd percent, and we do not expect any significant change as we continue our growth path.

Understood.

My last question is on UP market. You entered a few quarters back in terms of the R&O. So I wanted to understand when you compare a very large state for you, Rajasthan, where you have a very large market share versus a new state like Uttar Pradesh, in terms of gross margin, how do those two states compare? I understand, I don't know if I'm right, I understand that UP, the pricing is a bit lower than Rajasthan, but in terms of RM cost, also is there a big difference, so some clarity on that. Plus, you mentioned that around 1 lakh. Cases in UP in December, I understand it is India's largest market in terms of R&O. One last case is, how does it measure versus your own internal expectations? Any problems, any big wins, any problems you see currently in UP market in terms of that business?

So, in terms of if we are looking at comparing... RNO margin between Rajasthan and UP. In the initial stages, we definitely see UP while the margins on their own being very healthy, but they will be marginally less than Rajasthan. Coming to the second part of the question, how do we see this 1 lakh cases? We are excited for the pure reason, as you have called out, that UP is one of the largest markets of almost a crore case per month. And our current performance of reaching the 1 lakh case is well in line with our journey, which we had predicted for ourselves. Very early to start. Putting it in terms of big wins, but definitely it gives us a lot of confidence that the path that we have chosen and the strategy that we have implemented is resonating with the outcomes. And further, as our manufacturing unit is coming on, this really is coming on stream very, very soon. We are very, very confident that this will start as soon as it stabilizes in a couple of weeks, it will start improving our margins in UP also. So the growth journey in UP is very, very exciting from both point of view. High level of excitement, no big wins. It's too early to start reporting big wins on a small base yet.

So I just wanted to come in here on the margin in UP. There's going to be an expansion in UP margins as soon as the distribution starts. We were expecting to start last month, Abneesh, but there were some delays with the licensing. We've received our license early January, and now we've started the process of commissioning, and we hope to announce commissioning very soon. So there will be significant margin expansion now as soon as the distributor starts supplies, and then as the business stabilizes, scales up and stabilizes, there will be further growth in margin.

I understood one clarification here. Once the distillery in UP fully stabilizes, in terms of gross margin, so my question was not for EBITDA margin, because EBITDA margin, obviously, for a new business, is not the right metric to look at in the initial part of the cycle. Well, my question was more, once the distillery in UP is up and running, then is there a big gap in terms of Rajasthan gross margin and UP gross margin? You did say that the difference is not big, but once… Not very big.

No, not very big.

Sure. Thanks. That's all from my side. Thanks.

Thank you. A reminder to all the participants, please restrict yourself to two questions and rejoin the queue for more questions. Next question comes from the line of Himanshu Shah with Dolk Capital. Please go ahead.

Thank you. Thanks a lot for the opportunity. A couple of questions. First, on the manufacturing business, how much has been the correction in the raw material prices, maybe on a YOY or QOQ basis, if you can highlight, both in broken rice as well as made, number one. And secondly, has the entire benefit got factored in current quarter, or we should see some flow-through impact through higher spread even in the upcoming quarters?

So, Nilanjan, you could please pull out the change in raw material price, YOYQOQ. Meanwhile, I'll talk about the trend. So, the significant reduction in raw material prices started taking place towards mid-November. Which is in line with seasonality. Every year we see around November and essentially after the shera, we start seeing correction in raw material prices. This lasts still about. So Q3 and early Q4 is usually very good for margins. And that's the trend that's playing out even now. Milanjan, do you have the Q1Q and YOY numbers?

Yeah, the Q1Q reduction has been 4% and YOY reduction 15%.

Okay. And so, Shikhar, just a follow-up. So, we should see some more flow-through benefit because this price reduction has happened from mid of November. So, full benefit should come in Q4 and we should see some further healthy margin improvement for Q4 too. Fair to assume that?

No, so February and March prices will start firming up again. Overall, for the financial year, the margin will be around 6 to 7 rupees. In fact, it should be around 7 rupees a meter. Strategically, 5 to 7 is our guidance, and that is what we continue to maintain.

Fair. Secondly, on UP, Capex you mentioned has 200 crore. In presentation, we were seeing UP Capex has 120 crore. Any reason for this sharp increase in Capex for UP?

I don't know about the 120 number. I think CWIP is around 180. Nilanjan, can you talk about this?

Yeah, CWIP is at 184 crore.

So, we are expecting a little more, a little more capex, which is not yet, which happened in Q3 and is still pending. So, 120, I'm not sure what this number is yet.

I'll share the screenshot of the presentation after the call.

Maybe there was an error, I apologize for that, but please do share that information so we can correct the answer.

Sure. Thirdly, just a bookkeeping question. We have seen a change in numbers for Q3 FY25 between consumer IMFL and manufacturing numbers of the base quarter last year, Q3 FY25. Last year, IMFL revenue was 48 crores, which has been reported as 43 crores. Any specific reason for this?

There was a reclassification as per index, and that reclassification has been addressed in this quarter. Okay.

So, London, that reclassification was only in Q3 last year?

Only in Q3. Q3 of last year versus Q3 of this year. Okay.

And on IMFL, this is our vision statement, what we have guided for, basically 50% revenue from consumer, and within that 50%, 25% coming from PANF. This ballpark implies a 50% revenue CAGR over FY26 to 29. How confident are we on this and what will drive this? Because last two quarters, performance is not indicating any kind of positivity from an IMFL perspective. So, on a higher base of IMFL revenue, we are guiding for indirectly a 50% CAGR. So, how confident are we and what we are.

So, thanks, Imanchu. There's some background noise here. So, thanks, Imanchu, for the question. Obviously, overall, you see, we had called out in the last quarter that Delhi has been a drag on us for the last four, four and a half months, and that has had a big impact. Except for that, our overall strategy and growth are in line. Now, there is obviously, there can be a month or a quarter as we go forward into our next couple of years journey where there can be a performance which can exceed the projection and another quarter where it can slip. That is part, but we are very confident of our overall projection and our numbers purely because strategically we are going to grow within each state as well as we are organically also growing geographies. Further to top it up, also we have a lot of support coming in from luxury to build up the top line and the bottom line growth, which is being driven by P&A. So, overall, we are very, very confident because what we have narrated is part of a well-crafted strategy that has been successfully implemented for the last three years. We must keep it in mind that there will be these quarters of over-delivery and some quarters of softer delivery, and that is part of the journey. These will start getting less and less impactful as we keep going forward and have more brands, more geographies, so that any individual state, tailwind, or headwind will start becoming a very normal consequence or part of the journey as it is well known in our industry.

That was helpful. And how much independent our vision FY29 statement is on the QIP? Assuming if the QIP doesn't go through, would we still be holding on to our vision statement or we may recalibrate that?

We'll be holding on to our vision statement in either scenario. What we are getting with QIP is an ability to grow our business a little bit faster to be able to have certain opportunities for growth, you know, as and when the opportunity is available, to be taking actions in those opportunities, As well as for increasing our moral to whiskey inventory. So, you know, in either scenario, these are the numbers that we are projecting to achieve.

Thank you. Mr. Shah, please rejoin the queue for more questions. Next question comes from the line of Nitin Awasti with Internet Search. Please go ahead.

Hello, sir. One question on the manufacturing side and one question on the consumer side. On the manufacturing side, our utilization has been tagged below the numbers we used to do in the earlier years.

Sorry, Nitin, your voice is very soft.

Mr. Avasi, please speak a little louder. Thank you.

Yes, please go ahead. Okay, okay, great. So, on the historical front, from the historical perspective, our nine-month utilization number for the manufacturing business seems to be on the lower end. So, is it because of the CAPEX that we were doing and the refurbishing of the plants that we were doing? And do we expect this to, again, go back to the historical level of 90% plus?

Listen, we're expecting capacity utilization at 80% to 85% going forward. Given the capacity base, our current capacity base, and the incremental growth after UP, that's what we're going to be able to achieve, and that's been our guidance since last quarter.

Understood, sir. Sir, on the second question on the consumer front, Rajasthan had a multi-year policy which was implemented last year. It has done this before also. However, in the mid-year, it used to come and give a policy again for the next year. And that used to normally make Q4 a bumpy quarter, because the new exercise policy used to have higher prices come into April, and people used to stock up in Q4. So this time around, are we expecting any such movement because of multi-year policy or are we just expecting normalization of the whole thing?

So, Param, I can come in on this if that's all right. So, Nitin, you know, typically the one issue that I have here this time is that, you know, given our stabilization of our SAP HANA project, this quarter we've been able to announce our results a lot sooner than in the other quarters. We hope that this kind of momentum will continue now going forward. The one problem because of this is that usually Q3 results are towards mid or end of February, and by then I have complete clarity about next year's policy. Sitting mid-Jan right now, there are talks that are on for a potential price increase in Rajasthan. If that price increase is to come through, then yes, similar ordering pattern will continue as there was last year. But if it isn't to continue, then there won't be any change. Regardless of this, we are expecting this mid-single-digit kind of volume growth in the R&O segment, whether it is a little bumpy or not in Rajasthan, but we should be able to deliver on this mid-single-digit growth.

Understood, sir. Thank you.

Thank you. Next question comes from the line of Sid with Minerva India Undeserved. Please go ahead.

Yeah, my first question is that what is your guidance for EBITDA per liter, for FY27, and for this, what would be your underlying assumptions for rice and maize price for this guidance?

Our guidance remains five to seven rupees per meter for the next financial year at 80 to 85% capacity utilization. My assumption for maize and rice prices is a similar trend that has played out this year. If there is significant change, then we expect that prices will also move in line with the significant change that takes place.

Okay, so if the margins should... Yes, yes. My second question was how do you see profitability for IMFL in the next financial year, FY27? And if you could also give any inputs on FY28 profitability, that would be helpful.

At this point, we've given a guidance for FY29 profitability. We are not in a position to give year-wide guidance for the P&A business. So we request you to bear with us for a few quarters till then.

Okay, so for IMFL, you can't give FI 27 or 8 profitability guidance?

Not at the moment. Not at the moment. We've given 15 to 17% EBITDA margin guidance in FI 29 for P&A.

Alright, so then, my last question is that, what are our plans for UP, for IML, in the next financial year? Can you provide a target for, like, in terms of millions of cases that we are planning to reach in FI 27?

So, Param, who would you?

See, we don't want to project individual cases by a state. What we are expecting is, as we have called out, that overall, we are indicating that the R&O business will continue its mid-single-digit growth. Now, we obviously are expecting that. UP will continue to drive growth, as well as the support from Delhi and West Bengal will kick in once the new policy of Delhi excise comes through, which definitely will come through, if not sooner than in March. And West Bengal, by the latter half of this quarter, end of this quarter, our operations will start. So, individual... State-wise, guidance we are not releasing at this point of time. Kindly bear with us.

Okay, so, but it's fair to assume then that for IML and UP, we can expect similar mid-single digit growth in volumes.

No, I mean, UP is not... Overall, I said across IML, not for UP. UP will obviously grow much, much faster than that for the simple reason that the base is very slow, very small. UP is a very small base. We are seeing across the total performance of logos across all five states.

Okay. All right. Okay. Got that. Thank you.

Thank you. Thank you.

Thank you. Next question comes from the line of Asumia S. with Insightful Investments. Please go ahead.

Yeah. Hi, sir. Thank you for the opportunity. So, basically, my question was similar to the last participant. In the Delhi market, since you're saying that, you know, it has come back and now we're expecting better performance going ahead, if there is any chance you could give us what kind of volumes and revenue we're expecting, you know, going forward since it's a market that we were previously presenting and are now sort of seeing a revival.

So, thanks, Sonia. To give you a broader indication, we have given the performance of P&A that we reported a 37% year-on-year growth, volume growth without Delhi. You have our overall numbers of volume growth, which we have already published. It starts giving you that Delhi obviously was a salient market for us. As I have said, we individually do not predict state-wise, quarter-wise growth. But we are very confident of Delhi's turnaround, the turnaround which has already begun, should totally normalize by the end of this quarter itself.

All right, sir. Thank you.

Thank you so much, Sunil.

Thank you. Next question comes from the line of Ashish Upganlava with Invesc PMS. Please go ahead.

Thank you. Thank you. Fundraise that we've taken in the division of the board. So, any concrete plans as of now as to how much are we doing out of the time it grows and in what timeline? And secondly, the utilization of that, how we plan it.

Currently, there's nothing concrete. As I mentioned in my opening remarks, it's an enabling resolution, and based on how the business is growing, the requirements, as well as environmental factors, we will take a decision later in the year.

Okay, and what's the thought process on utilization of that? Where are we going to utilize it?

Utilization is essentially for growing our consumer business, both in terms of working capital, finance, as well as increasing inventory of more risky.

Okay. So the only point is that during the market cap of our company, 500% seems to be a reasonably big valuation that would come in. So, as investors, I mean, we would be looking at lesser of a dilution because... And is it a dire need for the business?

No, like I said, there is no dire need, firstly. Secondly, this is an enabling resolution, and 500 crore is the limit. The requirements that we are foreseeing are lower than that. So let's see how things shape up as the year progresses, and we'll keep you informed.

Okay, so we are moving on the... Thank you. Drop-in prices of raw materials, can you help me with the numbers on what would be the drop-in maize prices that you would have seen, and also on the broken rice, what was the kind of drop that we saw?

Nilayaj, you have the drop separated for broken rice and maize? I think it's an overall thing. No, it's not the right way to see it because, you know, we may not have been purchasing maize in a certain period that we're purchasing maize right now. So the base may not be comparable. Nilanjan mentioned that 15% is the reduction in raw material price year on year and 4% quarter on quarter and factors in the raw material mix.

Right. So would we have used more of broken rice this time around? I mean, is that a fair reduction or we are using a mix of both?

It's a mix of three, right? FCI, broken rice, and maize. In the north, maize prices are not that favorable. In the east, they are more favorable. So it's a mix.

Okay. I mean, just looking at the direction as to in the market, what would be the drop in the means price? I don't have the data. What are all the...

So, in terms of total raw material price, difference is 15% year-on-year. But if I were to talk about means... Last year, December, May's price in December last year was about 2,300 rupees, and this year it's about 2,150 to 2,200. But these are spot price changes, not average of quarter or any such number. So the average of quarter, the right way to see it, is average raw material price for that period.

Right. Got it. Sure.

Thank you. Next question comes from the line of Hitender Pradhan with Maximal Capital. Please go ahead.

Good afternoon, sir. Sir, if I heard you right, you said for Q3, you did 37% YOY on P&A, X of Delhi, and overall 9%. Do you have the similar figure for 9M also?

No, beyond this, there is not much more detail at this point of time. We are sharing. The reason why we called out was just to point out the impact of Delhi because Delhi was one of the first three states we had entered, UP, Delhi, and West Bengal, and as we continue with our growth journey, it still is a significant contributor, and our impact on Delhi has been noteworthy in our business. As I have said that we are very quickly normalizing the situation and the momentum will be there for all to see in Q4 itself. And going forward, obviously, such blips will become less and less noteworthy as we expand into more geographies and more brands. Okay.

And similarly, sir, on the R&O business, so, you know, from the beginning of the year, we were expecting a mid-single-digit sort of sales volume growth, but we have been more or less flat. And so let's say Rajasthan, you have called out about inventory alignment in Q2. So let's say if you remove Q2, then Q1, Q3, how has been the growth in Rajasthan market in terms of volume, if you can give some flavor on that?

Three-ish, three-ish. At this point of time, Q3 is three-ish. There is also an impact of, you know, you will note, sir, that we have called out, I think even in the last Q2 one, we had announced that Delhi policy is coming to an end. So, as of now, there is no sale in Delhi of any company because the policy has concluded and the excise has not released the new policy, unfortunately. And West Bengal, obviously, is undergoing the transition, which will, in the medium term, will be very beneficial to us. As a result, both these states having no volume contribution or top-line contribution, it has that short-term impact on the business. But we hold our overall guidance of mid-single digit.

Okay. You also mentioned about, you know, significant margin increase once the UP distillery will come up. So that is going to be only on the RNO sales that we are doing on UP or what will be the base over which this margin expansion will play out?

It will play out on RNO and PNA.

Okay. So, it will play out on both R&O and P&A sales, which we are doing currently in UP.

Yes.

Current and future sales. Okay.

Okay.

And, sir, on the fundraising side, unless we have an inorganic opportunity in sight, Given that now, you know, the bad times that we had in manufacturing, now that is turning around and that should positively contribute to the cash flows. And given that we don't have any future CAPEX requirement coming from manufacturing, so in absence of any inorganic opportunity, why there should be any fundraising requirement for the company as such?

So currently in the IMSL business, the way it's growing as well as poised to grow, of course, we've had a couple of quarters of setback in Delhi. But, you know, leaving aside that, Param mentioned that the growth in all of the states has been completely on track. There is a need to be a little more aggressive on investments behind the consumer business, both in terms of working capital as well as advertising opportunities. Our entire aggression currently is based entirely on raw material price movement. So once raw material price comes down, our aggression increases, raw material prices go up, our aggression reduces. And that kind of strategy is not... We are now shaping up the future of states, of consumer business in the new states apparently. So that is the reason, strategically, for doing the fund raise.

What is the net debt that we have right now, sir?

570 crores.

570?

Yeah.

Okay, sir. Thank you, sir, and all the best.

Thank you. The next question comes from the line of Himanshu Shah with Dolk Capital. Please go ahead.

Sir, just a follow-up. Would promoters be participating in QIP?

As of now, there is no commitment either ways, so I currently can't speak on behalf of the promoter block, but let's see how things shape up.

Sure. That's it, sir, from my text. Thank you and all the way.

Thank you. Next question comes from the line of Nishant Bhatt with Equity Works Limited. Please go ahead.

Yeah, am I audible, sir?

Yes.

Yeah, so my question was regarding the P&A segment. So, currently, my question was, like, when can we expect a break-even in this segment? Can we expect a break-even in this financial year? Because I think we are very close to a break-even, and I guess within two to three quarters, it should turn positive. Am I right in my assessment?

Yeah, I believe so. Param, do you want to talk about it? Yeah, yeah. See, the way, if you will recall, since the inception of our journey, we have been saying is that each individual market in its third full year. We'll start accruing and will become profitable, and new markets will continue to add, and they will obviously need investments, and as we keep growing, pursuing aggressive growth, these investments will continue to feed into it. And overall, we have shared that wherever journey is that from a position of where we started, we are now almost in the zone of. You know, very close to breakeven. It is very difficult to start predicting quarter on quarter on the growth here that how soon we will breakeven because it is the aggression at which we will grow the existing states paralleled by an aggression with which we will continue to find new geographies and invest there. So my take here is that overall, as far as we continue to drive growth and keep moving towards profitability, profitability is just a function of the journey. Our individual margins basis the strategy that we are using on choosing brands, segments, geographies, and our right to win. are in the zone of 40% already, which is in the zone of Western class 45% across leading brands and companies. So I think these are the parameters where we would like to anchor our business on. And sooner than later, you will see that we will reach the line.

Got it. And then, I think, so, my question was, again, on the P&A segment itself, see, majority of the players have a very decent margin somewhere near 15 to 17%. Like, but because we are in, like, fully integrated player, Like, can we expect, you know, and, you know, margin, which can be greater than this particular price stand over the years?

Our ANP spends are significantly higher than competitors. On the other hand, our gross margins are in line with competitors. We expect that by FY29, our EBITDA margins will be in line with competitors, even though our ANP will be higher than competitors in FY29, and that is the strength of our integrated model.

We would not want to make any projections or predictions beyond that because we have benchmarked our first large pit stop at F29, where we have declared we will be between 15% to 17% EBITDA.

Got it. But, yeah, that's all I'm saying. Thank you.

Thank you. Next question comes from the line of Raman KB with Sequent Investments. Please go ahead.

Hello, sir. Can you have him?

Yes, please go ahead.

Sir, yes, sir. Sir, I just want to understand. I have three questions. One is with respect to the upcoming U.P. Distillery facility. From what I can observe over the past two quarters, we are able to do around 50 to 52 million liter per quarter of sale in terms of manufacturing business, that is ENA and ethanol. So once this UP facility comes in in Q4, how much will be the incremental? Sale in terms of manufacturing business, once the QP industry commences in 527.

Yeah, just a second. About 20 million liters, 15 to 20 million liters more.

Per quarter?

Per year.

Per year. So, and you have given the guidance of around 80% utilization, 80 to 85% utilization, that is including this new facility, right?

Yeah, yeah, yeah. So, this 20 million is at about 90% capacity utilization. So, 15 to 20.

So, and my second question is, I just want to understand growth of your consumer business in terms of volume or sales, if you can give a ballpark figure for F527. You have given with respect to consumer business, I think, mid-single-digit volume growth? And what about the prestige and above, will it continue to grow at 50%?

No, so we have not given any guidance for 27 and 28. We've given a guidance for 29 for our P&A business. We've given an R&O volume guidance and revenue guidance on mid-single widgets year-on-year. For the manufacturing business, the reason it is hard to give a revenue gross run rate is because that business... The realization is dependent on raw material price. So you could have periods of, you know, even degrowth in revenues, but capacity utilization and EBITDA margins, those are the main ways to monitor that business. So, 80 to 85% capacity utilization with 5 to 7 rupees EBITDA margin, regardless of revenue growth or decrease. However, in FY27, revenue is going to grow because of new capacity coming in. And this is the last increase of capacity that is expected going forward.

Understood.

Yeah.

Hello. Can you hear me?

Yes. I hope I answered your question.

Yeah. Yes, sir. So, my final question is with respect to the QIP. We have received an approval of 500 euros of QIP. I just want to understand if you can give us a ballpark figure where we will be using these funds for.

So, the upper limit is 500. Our requirement is lower than that. The funds will be utilized, as I mentioned earlier, for growing our consumer business. It will be utilized for working capital as well as for increasing our malt whiskey inventory in maturation.

So, can you explain the last part of it, increasing the...

So, you know, for our single malts, given the expected growth rates of the single malt whiskey brand, Doab, we need to increase our inventory of whiskey in maturation, which will be available after a few years for bottling.

After a few years, what's the last one?

For bottling.

Okay, understood, sir. Thank you, sir.

Thank you. Next question comes from the line of Davaltama with Enigma Small Opportunities Funds. Please go by.

Hi, sir. Thank you so much. Sir, just wanted to understand basically recently, I don't know, there has been some buzz that OMCs have started reducing the offtake of ethanol. So, do we have any color on that or are agreements still in place for the next one year and we are pretty confident in terms of volume outlook over the same?

We are confident of 80 to 85% capacity utilization between ENA and ethanol. So, you know, within this, we do not see any significant threat. Yes, I have also been hearing that OMCs are reducing volume of intake, but so far, we are not impacted, and our contracts are in place. for the capacity utilization guidance that I have provided you.

Okay. And, sir, I think that would be great if you can just give us some more color in terms of the impact of Delhi, because I think at the beginning of the current financial year for FI26, we were confident of delivering a much higher number in terms of revenue, at least on the P&A segment. So, would it be possible for you to provide some more color on that in terms of how the recovery is shaping up, what was the bottom that we hit in terms of volumes in Delhi, and how things could shape up from here?

So, Param, could you take that?

Yeah, yeah, yeah. Thanks for the question. As we have already called out the revenue growth, excluding Delhi, to give you a fair idea of the impact of Delhi, in terms of how the business is shaping up, we expect January to March quarter to totally normalize Delhi. We have already begun our journey of normalizing Delhi in the last month of the previous quarter. And while we do not release individual state-wise volumes or growths, we are collectively, obviously, Delhi still being one of the early three states and being a reasonable contributor to our journey, when you start seeing the projection of 50% growth for Q4, We believe that it gives you sufficient confidence that Delhi will be totally normalized and back on track within this quarter.

Sure. And, sir, basically any timelines that we have in terms of getting into CSD or some duty-free channels in terms of projecting the brand or increasing the awareness? So any color or any timelines on that?

So, it's difficult to project timelines, but we are very happy to share that we are pursuing both these verticals. As we talked to you, we are, we are, file is moving in CSD. The first time entry into both these channels does take time over which we do not have enough control, and hence we cannot take the liberty of putting timelines. But we are also aggressively pursuing both these channels, and we hope to share good news with our investor partners sooner than later.

Sure, sir. That's it for my second. Thank you so much, sir.

Thank you. Next question comes from the line of Chandrasekar Sridhar with Fidelity International. Please go ahead.

Hi, gentlemen. I just wanted to get some math clear in my head. We are sort of clocking about 210-ish million litres in the manufacturing at this point in time. I think, Param, you made a point that you will be able to do another 20 million litres of external sale, which is sort of maybe a 10% increase. And in additional volumes. So, is that right? And if that were to be the case, how do we sort of get to your F529 numbers in terms of your manufacturing sort of EBITDA, even at... So, I just want to understand first if that is right, and then if given that we'd be sort of 330 million capacity and you're talking about 85% utilization, it doesn't seem that there's a lot left which would be consuming internally. So, just trying to get the math around this right.

Hi, this is Shekhar. I'm sorry, I lost track of some of the numbers you mentioned. Our current capacity base is 330 million liters. We are adding another 30 million liters in Uttar Pradesh. So, that takes it to 360. 85% of this is about 306 million liters of capacity.

Right. Okay, so we really, I mean, about 220-230, sort of. For external sales and the rest is sort of what we think we consume internally over a period of time.

Over a period of time, the internal consumption number, I know we've done a working on it. I don't have it ready offhand. I can send you that breakup. FY29, what is the internal consumption and external sales? I will send that to you.

Sure, thank you. Can we also get some sense around what's the potential market share which you're thinking about UP over a three-year view? I mean, this is obviously a 120 million case market, much larger than Rajasthan, but do you have some sense that by then, UP could be almost as large as the 10 million, 11 million which you're doing in Rajasthan?

Yeah, thanks for the question. So we have in our F-29 projection anchored UP at 5 million cases, which pegs us, you know, even if the market does not grow and holds its volume, it pegs us 5% share. And that's the best breakup at this point of time on the table.

Understood.

Okay, thank you.

Thank you. Thank you. Next question comes from the line of Vijay Shah with Insightful Investments. Please go ahead. Yes, sir.

Thank you for the opportunity. Just two questions. One is, currently we said our net debt is about 570 crores. Just one question. What kind of debt to EBITDA levels will we be comfortable over the next couple of years?

Ranjan, do you have the working of debt going forward?

Two or less. It's a walking capital business. So, next few years, while our long-term debt will come down, but our working capital will increase with increase in IMFL business. So, anything in the level of 2 or less is an ideal position on a debt-to-ebitter.

Okay, so you think two or less. And second is just one small clarification. We said that we will see sharp volume growth in Q4. Will that base number for last year's Q4 change or that will remain constant?

No, the base numbers of last year's Q4...

If we change the base number for this year, it's already for this quarter. So, just want to clarify up front.

No, no, no. That was a declassification matter. Q4 base numbers will not change.

Okay. Thank you so much.

Thank you. Next question comes from the line of Nishan Bhatt with Equity Works Limited. Please go ahead.

This is just a follow-up question I wanted to ask. See, we are seeing a trend that a lot of other companies are acquiring this homegrown distilleries as, you know, inorganic acquisitions, like ABD just acquired, I think, Fullerton distilleries, right? So, similarly, Param, are you seeing some kind of opportunity for Globus over here? To, like, because we are focusing on premiumization of our brand side. So, that's one question I wanted to ask.

You want to take it or you want me to take it, Shikhar? I can take it, no problem. So, I think this is one area where Globus differentiates itself from a lot of the other companies out there, which is our internal capability to innovate and create products. You know, a lot of the other companies need to acquire new products in order to get innovative products as part of their portfolio. However, we are able to create that innovation internally. Let me talk about a recent launch, which is Zawab Expression 02, matured in Japanese Mizunara Oak. This is the first Indian single-mouth whiskey to be matured in Japanese Mizunara Oak. Another product, Terai Vodka, which is a premium to absolute vodka in all states. This is the world's first vodka to be filtered with amethyst crystals. And this is a technique created entirely in-house. So, a lot of our plans for innovative brands is based on internal innovation. On the other hand, coming to acquisitions, there may be opportunities to acquire regional brands that have distribution salience. in certain geographies that we are not present in. So, those are the kind of opportunities we would be interested in looking at.

Got it. So, we are confident on our, basically, branding and, you know, in-house capabilities, that's what you are saying.

For the FY29 plan, yes.

Got it. And see, this is just a suggestion, because I can see you have been, you know, creating wonderful brands, but we don't see it in social media or this go up, especially in YouTube. I see a lot of other reviews also, like there are some other companies which are marketing. I don't see your products. Even Terra Amethyst, it has such a very, you know, catchy kind of, you know, bottle design and the amethyst crystals as well, you know. So, but I don't see it in social media. That's the suggestion I wanted to give. So, you can go aggressive because you are mostly, the target is on, you know, the younger audience, right? Right. So some experimental consumer events, you know, live concerts, that kind of, you know, marketing you guys can do. Because I think the brand actually hits with the young consumers more. I see many of my friends consuming tarajin. That's why this was just a suggestion to add on.

So thank you for that suggestion. And our ANP spends are based on the need for the business in the markets that we're present in. So they are prioritized according to that. And as the priority for social media increases, we will increase our spends in that channel. But yes, thank you very much for the suggestion.

That's all for me, sir. Thank you. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I would now like to hand the conference over to Mr. Shekhar Saurabh, Joint MD, for closing comments.

Thank you, everyone, for joining today's call. As always, we remain available for any further questions you may have. Please do reach out to us directly or to our Investor Relations Agency, Stellar. Thank you again and have a good evening.

Thank you. On behalf of Globus Spirits Limited, thank you for joining us. You may now disconnect your lines.