Dear Shareholders,
It has been yet another year filled with geopolitical tensions, and their consequences
on several developed economies. Economic activity continued to grow steadily after
inflation declined from its peak in mid-2022, despite warnings of stagflation and
recession. Although major advanced economies have raised their interest rates
significantly to restore price stability, the unexpected economic resilience also reflects
the ability of households to draw on substantial savings.
Globalization and interconnected economics created operating challenges for your
company as well. And yet your company continued to show resilience in the face of those
challenges. With raw material costs increasing throughout the fiscal year, we managed to
partially mitigate the impact on margins by implementing a risk mitigation framework.
In recent years, your company has been able to compete effectively in both the mass and
premium markets due to an hourglass-shaped market for consumers. By leveraging the
inherent strength of our product portfolio and operational agility, we believe we will be
able to move forward and enter two new markets, beer and ready-to-drink.
Our business is diversified geographically, and we strive to identify market trends and
new cohorts of consumers to continually improve our performance. Creating a sustainable
business is our vision, and for that, we must be guided by these principles:
Premiumization Journey: As we prepared to take the next big leap in our growth
journey, we brought more innovation, distinctiveness, and brand excellence into our value
proposition as the alcohol industry is moving towards premiumization, we wish to
capitalize on this trend. Through exceptional innovation, we have added new layers of
excitement to our Prestige & Above portfolio. With our strategy, we have already seen
success in the transition from Value to Value Plus in recent years, and we aim to
replicate this success in the Prestige & Above segment.
Umbrella brand: As a testament to our deep-rooted strengths, we have evolved into
one of India's most reputed liquor brands. Several recently launched craft spirits have
gained traction and are performing well, such as Terai - India Dry Gin, Snoski - a highly
unique crafted vodka, and Mountain Oak - an exclusive blend of Scotch malts and select
Indian grain spirits. With this vote of confidence, we have been able to enter untapped
categories like Read to Drink and Beer.
Optimum utilization of incremental Manufacturing Capabilities: As a result of our
focus on deficit states in the ENA, we have a lot of pricing power and opportunity to
profit. Government policies focused on ethanol blending will continue to drive demand for
bulk alcohol in the manufacturing segment.
Creating a circular economy: Using the cash flow from the manufacturing business
and enriching the consumer business has always been the goal. Investing in a sustainable
business model in the Prestige & Above segment is one of our long-term growth
objectives.
Risk Mitigation: Our margins were affected by inflationary pressures on the raw
material during the year. Our strategy is to move towards maize, which will help us
improve our ethanol realizations. Such measures, along with internal cost rationalisation
measures will help in the medium to long term.
Investing strategically in capacity and premiumization, your company continues to build
a strong platform across the value chain. We believe that the Indian consumption story
will continue to drive strong growth in all of our markets.
I would like to once again place on record, our sincere gratitude to all our employees,
customers, partners, and other stakeholders that continue to support the Company's
endeavours.
Sd/-
Chairman.