Jagatjit Industries, the maker of Aristocrat Premium whisky and other spirits, is gearing up for one of its most aggressive expansion moves as early as 2025. The Company plans to drive the product portfolio by launching new products like Royal Medallion brandy, followed by a craft white spirit and single malt whisky by July 2025. The Company aims to mobilize private equity of ₹300 crore by the end of 2024 to finance this ambitious expansion. These funds will also be repaid as debt and used to acquire some underperforming franchise operations.
We would expect that in the strong-performing states such as Assam, Delhi, and Andhra Pradesh, the business will expand by around 30-40% over the next two years, as supported by sales and marketing activities,” said Roshini Sanah Jaiswal, promoter and chief restructuring officer of the Company.
It will also return to Uttar Pradesh, Kerala, and West Bengal. “We exited UP 18 years ago, but it’s a significant market, and we will restart operations there within the next two months. The other two states will follow soon,” said Jaiswal.
State laws regulate the market and decide pricing. Recently, many companies have focused on premium brands, lessening dependence on entry-level products. Established in 1944, Jagatjit produces various beverages: brandy, vodka, and whisky. The franchise model has been followed since 2018. The Company achieved 62% growth without a 30% fall in the category during the pandemic.
Revenue for FY24 stood at ₹708 crore as against ₹582 crore in FY23. Profit after tax for the fiscal year is ₹7.5 crore. The Company sells around 5 million cases yearly, and the instances of Indian-made foreign liquor have been growing since 2020 with a CAGR of 20-22%.
In addition to its beverage offerings, Jagatjit has a malted milk foods division, which recently doubled its capacity to 250,000 litres. Jaiswal said this business has supported the bottom line, although it focuses on premiumization to enhance profit margins.
An ethanol plant is also in the offing. It has been given a loan of ₹180 crore for a 200-kilolitre-per-day grain-based distillery to be set up in Kapurthala, Punjab. The Company expects this business to rake in ₹500 crore as revenues in the first year. That would be a 15% EBITDA margin.
The Indian liquor industry, valued at $32 billion, is projected to increase another $7 billion by 2028. Based on the endless trend of a youth population group representing 33% of Indians or about 460 million people within India’s legal drinking age, Jagatjit Industries enjoys a perfect storm from which to cash in.
Shares of the Company closed at ₹292 on September 24 after a recent high of ₹305 on September 15.
