Dear Shareholders,
The last two years have necessitated most businesses to showcase multiple qualities;
none more than the quality of tenacity. Saying that the business environment has been
volatile during this period would be a massive understatement. Despite all odds, your
Company has emerged a winner during those tough times. Drawing inspiration from Gurudev
Rabindranath Tagore who had famously said, "You can't cross the sea merely by
standing and staring at the water", your Company went ahead and took those challenges
head-on. It is largely due to our determination to wade through the rough waters that has
made all the difference. Not only were we better prepared to face the impact of the second
wave of the pandemic on our operations, including production; we were also able to grow
significantly on the back of an improved regional and brand mix.
With increased confidence as months went by, we moved our focus from steadying the ship
to moving ahead full steam. I am extremely pleased with the progress we have made during
the past twelve months and more.
Debt reduction:
Debt has been reduced by almost Rs 100 Crores from Rs 543 Crores as of Mar-21 to Rs 449
Crores as of Mar-22. Most of this debt has been repaid through internal accruals and I
expect this to further come down on the back of the funds raised through the two
preferential issues over the past eight months. This incremental debt-reduction will see a
significant savings in our interest costs. Our aim is to become near net debt-free by
FY24.
EBITDA expansion and Volume growth:
EBITDA increased to Rs 112 Crores in FY22, a 107 per cent growth compared to FY21. This
growth in absolute numbers as well as margins has been on account of a better regional and
brand mix, as well as strong growth in volumes, leading to operating leverage.
We achieved volumes of 6.73 million cases, a growth of 23.4 per cent over FY21. This
figure also represents the highest volumes achieved over the past seven years. The growth
in volumes has been led by our premium brands Mansion House Brandy and Courrier Napoleon
Brandy, both registering a growth of almost 25 per cent.
Equity fundraise:
In addition to the progress we made on the business front, we also raised funds through
two preferential issues; one in December 2021 and the other recently, in July 2022. In
aggregate, we raised Rs 226 Crores, including Rs 14.7 Crores through conversion of EARC
balance debt into equity. In the first fund raise of Rs 126 Crores, we saw participation
from two Promoter Group entities along with well-known marquee investor.
In the second fund raise of Rs 85 Crores, we have seen participation from our important
channel partners in the southern states of Kerala, Andhra Pradesh and Telangana. The
participation of each of the entities mentioned above is a testament of the confidence
they have in us achieving the stated goals of the business.
Market share expansion:
Brandy is the second largest category in the IMFL segment and is the most versatile of
all IMFLs. Over the past six years or so, the brandy segment has grown at a faster rate
than overall IMFL and whisky, the largest IMFL spirits category in India. As per the data
received from our major markets, namely, Telangana, Andhra Pradesh, Karnataka, Kerala,
Puducherry and Goa, we have grown even faster, thereby leading to market share expansion
for our flagship brand, Mansion House Brandy; from share of IMFL from 2.4 per cent in FY17
to 3.4 percent in FY22. Today, MHB is the highest selling premium brandy in the country.
Launch of Mansion House Flavours:
Present-day consumers are more experimental and their tastes and preferences are
evolving. Along with an increase in demand for premium products, this trend has given a
significant push to flavoured drinks and a cocktail culture. At TI, we are passionate
about brandy as a product category and our aim is to redefine the brandy space.
In my message in last year's Annual Report, I had alluded to new launches in the brandy
category. I am now proud to share that in June 2022, we launched India's first premium
flavoured brandy under our Mansion House brand. The brandy is currently available in 3
flavours; Orange, Cherry and Peach. This initiative is also in line with the Mansion House
Brand theme - Key to more'.
The MHB premium flavoured brandy aims to enhance the experience of the aspirational
Indian consumer and make brandy a drink with a popular appeal. While this has been
initially launched in Puducherry, we will be launching our flavoured brandies across more
states in the coming months.
World Brandy Day:
I had also mentioned in the last Annual Report about the World Brandy Day and its
launch in December 2021. Unfortunately, owing to the restrictions enforced on account of
the pandemic, we took a call to push back the launch of the World Brandy Day by a year.
The World Brandy Day will be celebrated every year on the second Friday of December. Being
the largest premium brandy manufacturer in India, we believe the onus and responsibility
is on us to create a more aspirational positioning for brandy within the IMFL space. I
continue to be very excited to be taking a lead in this and will share more details with
you all at the opportune moment.
Cultural transformation at TI:
In order to further deliver high growth, a cultural transformation is simultaneously
underway within the company. The idea is to create a working environment where free
thinking and innovation are encouraged. Along with inducting young and top talent into our
fold across different functionalities, we are focusing on recruiting women leaders for top
management roles at TI. Additionally, our new HR policies have been designed to gradually
implement a Work from anywhere' culture. Employee-friendly vacation and leave
policies, flexible dress code are some of the new initiatives that have been introduced.
Dividend:
I am also extremely happy to share that after a period of eight years, we have
announced a dividend of Rs 0.10 per equity share.
Focus towards sustainability:
We have always believed that our growth momentum needs to be supported by initiatives
we take towards being more conscious about our environment.
Towards this cause, we have taken a bold decision this year to remove the permanent
mono-carton on our flagship brand Mansion House Brandy.
Our initiative will help reduce the waste to landfill. According to a report by
ASSOCHAM and PWC, landfills are brimming with so much urban waste that by 2050, India is
reportedly going to need a landfill that is the size of its capital, New Delhi.
Way forward:
While we have seen a lot of positives in the past year, the last few months have
witnessed significant global supply chain disruptions leading to considerable inflationary
headwinds. This could continue to a varying degree in the immediate future.
Our mitigation strategies revolve around volume growth, favourable product and regional
mix, cost optimisation efforts and improved productivity; all of which, we have proven in
the recent past.
Going forward, we also aim to build on our brandy portfolio, both in terms of new
product launches as well as growth in existing and new regions.
I would like to thank all our shareholders for their continued faith and support in the
management.
Best Wishes, |
Amit Dahanukar |
Chairman & Managing Director |