Tilaknagar Industries Q1 Review - Earnings Beat Led By Strong Margins In A Challenging Environment: Systematix

Systematix Research Report

Tilaknagar Industries Ltd.'s revenue growth was in line with our expectations while operating performance was above expected. Topline growth stood at 3% YoY with revenue of Rs 3.13 billion. Volume growth stood at 0.9% YoY to 2.54 million cases.

Net sales realisation grew 0.2% YoY to Rs 1,252 per case. The slowdown in growth was led by industry-wide disruption due to elections and thus the higher number of dry days.

The Southern states which contribute 85% to company’s volumes also witnessed a degrowth of 0.1%. Gross margin declined 75 bps to 49.6% due to inflationary pressure in ENA. However, Ebitda margin expanded 341 bps to 16% driven by cost optimisation initiatives and increase in share of premium products.

This also included a subsidy received from the State Government of Maharashtra of Rs 56 mn. Adjusted for the subsidy the Ebitda margin stood at 14.5%, still a margin expansion of 189 bps YoY. PAT witnessed strong growth of 55.7% to Rs 401 million majorly led by significant reduction in finance cost (-30.8% YoY). Company paid debt of Rs 223 million during Q1 FY25. The gross debt now stands at Rs 970 million while net debt at Rs 430 million.

Going forward, company expects volumes to grow in mid double digits and revenue growth to be ~300 bps higher over volume growth.

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