• Strategic partnership with Diageo (world's #1 alcobev company) manufacturing 26 brands and 57 SKUs including McDowell's No.1, Royal Challenge, and premium Scotch brands, utilizing 70% of current capacity
• New contract manufacturing partnership with Tilaknagar Industries (which acquired Imperial Blue for Rs 4,300 crores) driving the expansion plans
• Current operations: 66 KLPD ENA capacity and 4.2 million cases bottling capacity at integrated facility in Hardoi, UP
• Expansion underway: Rs 60-65 crore capex for bottling expansion to 7-7.5M cases by September 2026, followed by Rs 65-70 crore for distillery expansion to 100 KLPD
• Government incentives of approximately Rs 25 crores annually continuing till 2030, significantly boosting profitability
• Strong balance sheet improvement: total debt reduced to under Rs 50 crores currently, network turned positive from historical losses
• All historical restructured debt from edible oils business being honored with 8 of 10 installments already paid, demonstrating financial discipline
• Company has 32 acres of land with only 40% currently utilized, providing ample room for future expansion

Shri Gang Industries has successfully transformed from a struggling edible oils company into an integrated alcobev manufacturer with strategic partnerships with Diageo and Tilaknagar Industries. The company is executing an aggressive expansion plan to nearly double bottling capacity (4.2M to 7-7.5M cases) and increase ENA capacity (66 KLPD to 100 KLPD), targeting 500+ crore revenue by FY28 with strong EBITDA margins of 15% on the expanded base.

The company currently generates revenue of approximately Rs 300-350 crores annually with EBITDA in the Rs 40-50 crore range (approximately 15% margin including government incentives of Rs 25 crores). Core EBITDA (excluding incentives) stands at Rs 15-25 crores. Total debt has been reduced to under Rs 50 crores from higher levels previously. Post-expansion, management targets revenue of Rs 500+ crores with core EBITDA (excluding incentives) of Rs 50-60 crores. The company is demonstrating strong cash generation with internal accruals expected to fund 25% of the expansion capex. Peak debt is projected at Rs 120-150 crores in FY28 post-expansion, with debt servicing comfortable given projected PAT of Rs 30+ crores from core business plus Rs 17-18 crores from government incentives.

Management displayed high confidence and strategic clarity, emphasizing their successful transformation and partnerships with industry leaders like Diageo and Tilaknagar. Chairman Sanjay Kumar Jain and COO Varun Gupta stressed their commitment to quality manufacturing, responsible growth, and maintaining best-in-class partnerships rather than aggressive volume chasing. Management highlighted their differentiation through operational excellence, ISO certifications, and ability to manufacture complex brand portfolios. They emphasized disciplined financial management, having honored all legacy debts without write-offs. The tone was optimistic about UP market growth potential and their competitive positioning as a preferred contract manufacturer. Management showed transparency about raw material price volatility impacts and conservative accounting policies (cash basis for incentives). Strategic priorities include completing expansion on schedule, strengthening balance sheet, leveraging operating leverage from expanded capacity, and potentially reducing promoter pledge over time.

Key challenges include raw material price volatility, particularly maize prices which saw abnormal increases in Q4 FY25 and Q1 FY26, creating margin pressure. The company faces execution risk on the ambitious expansion timeline targeting September 2026 commissioning for bottling plant. Debt is expected to increase from Rs 50 crores to Rs 120-150 crores peak in FY28, requiring successful ramp-up to manage interest costs of approximately Rs 15 crores annually. Government incentives of Rs 25 crores annually will end in 2030, requiring the business to compensate through scale benefits. High promoter pledge remains a concern requiring deleveraging. Accounting on cash basis for incentives creates quarterly lumpiness making performance assessment difficult. The company is in a competitive market with established players. Working capital requirements may increase with expanded operations. Bank financing for Rs 45-50 crores for bottling expansion is partially secured but not fully tied up. The company has limited track record with integrated operations starting only in 2022.

Revenue Outlook: Target Rs 500+ crores post full expansion (FY28), from current Rs 300-350 crores

Margin Outlook: Core EBITDA (excluding incentives) expected at Rs 50-60 crores on Rs 500 crore revenue base (10-12% margin), with operating leverage benefits from fixed cost absorption over larger base

Key Targets:

• Bottling capacity expansion to 7-7.5 million cases by September 2026
• Distillery expansion to 100 KLPD following bottling commissioning
• Total capex of Rs 125-135 crores (Rs 60-65 crores bottling + Rs 65-70 crores distillery)
• Funding: 75% debt (Rs 45-50 crores for bottling secured partially), 25% internal accruals
• Peak debt of Rs 120-150 crores in FY28, then deleveraging begins
• Post-expansion PAT target: Rs 30+ crores core business + Rs 17-18 crores from incentives

The Q&A session revealed strong investor interest in the expansion economics, partnership rationale, and financial trajectory. Analysts focused heavily on understanding the Tilaknagar deal logic given existing Diageo relationship, with management explaining this as growth opportunity while maintaining capacity for Diageo expansion. Significant attention paid to capex funding, with concerns about debt increase from Rs 50 crores to Rs 120-150 crores, though management demonstrated confidence through phased approach and strong cash generation. Multiple questions probed margin structure and sustainability, with management emphasizing integrated operations model rather than standalone bottling/distillery economics. The government incentive topic generated discussion about 2030 cliff risk, with management expressing confidence that scale benefits will compensate. Valuation questions emerged with investors noting attractive Rs 150 crore market cap vs. Rs 100+ crore incentive receivables and Rs 40-50 crore EBITDA. Some concern expressed about promoter pledge and consolidation plans across group companies, with management acknowledging but prioritizing operational growth over financial engineering currently. Overall, management presented confidently, provided specific numbers, and demonstrated strategic clarity, though some execution and financial risks remain. The session had a positive, growth-oriented tone with management welcoming scrutiny and encouraging site visits.