Tilaknagar Industries: Market Leader in Brandy!!.. Kingfisher Loosing ground.??.

We are all well aware than "Mansion House" Brandy is the most popular Liquor brand of Tilaknagar, we also know its a millionaire brand (sells more than a million cases every year) 84% of sales is Brandy for Tilaknagar, Volume wise 4.98 million cases of brandy was sold by tilaknagar in year ending March 2018

I would assume atleast 2.5 - 3  milllion cases would be just Mansion house brandy.. and rest would be Courrier Napoleon (semi-premium range)

the question is what are the ground realities... actual data from the ground level .. Liquor being a controlled product and heavily taxed and a source of revenue.. govt data is available.. though not easy to mine or to extract..

I have got data for Kerala State and presenting raw data here for every one.

- Every month what ever liquor is selling its replaced from warehouse.. so that each store has the liquor which is selling (in demand) and not something the public does not want..

As can be seen for location : "BLM Overbridge" most selling Brandy is Mansion House.

with 10.60% replacement market share

The other important thing worth mentioning is that this list did not contain.. Honey Bee Brandy or Mcdowell No1 Brandy..(largest selling brandy brands in India & the world) so either Mcdowell No1 & HoneyBee is being discontinued .. or the cheaper brands have to be pushed by the Supplier and demand is not generated!! (I'm guessing/speculating based on data available..) 

Another important thing is Kingfisher brand of beers seems to be trailing to " British Empire Ultra Premium Beer" [SNJ Breweries Pvt limited] by huge margin..

this is not good news for United Breweries shareholders.. I hope they have their ears on the ground to face the challenge .. and nip it at the bud!!..

Raw data for "BLM Over bridge" location in kerala has been provided for all to evaluate and make an informed decision.. (its a bit too long so please right click and open on a new tab to see it in detail)

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you can see data for whiskey - vodka & rum also for "BLM Overbridge" location to get an idea about what's selling in Kerala in March/April 2019!  

PN: "BLM Over bridge" is just one sample location and not necessarily a good sample.. so please do your own  deep dive to come to any conclusion... this is my own study for my own personal review.. not a comprehensive industry wide database.. 

Conclusion: Tilaknagar has a MCap of just: 188cr ..& sales of 1800cr (approximately for march 2019 guess-estimate) and its the market leader based on ground realities (data from kerala) .. Its definitely very cheap for a market leader in Premium brandy space.. and over the next 10 yrs we can easily expect Tilaknagar to be a multibagger (once it gets its debt fixed..) Tilaknagar is an 86yrs old company so Tilaknagar Industries has seen its fair share of up & down days & should be still around for decades to come..   Good time to add/invest when stk is at rock bottom..

United Breweries seems to have a new challenger[SNJ Breweries Pvt Limited] and needs to pull up its socks ..else  it could very well see the floor disappear from under its feet..

PN: I am not a sebi registered investment advisor, this is just data based on my person research and its not comprehensive... Please do your own research and consult a registered investment adviser before investing.. I do have investments in Tilaknagar Industries.

Tilaknagar: Liquor consumption in Kerala

Tilaknagar Industries

CMP: 13.50, Market Cap:172.4cr

Kerala is the largest liquor consuming state in India .. and fortunately data is available for Kerala at 

http://ksbc.kerala.gov.in/ website.

The interesting fact is "Brandy" is the most consumed Indian Made Foreign Liquor consumed in Kerala .. RUM is second and then down the line is whiskey..

Top Selling Brands in Kerala:(April 2019)

No:1) No1 Mcdowell  Brandy : 13.19% market share

No:2) No1 HoneyBee Brandy :  7.40% market share

No:3)OLD Port Deluxe RUM : 6.29% market share

No:4)JAWAN SPECIAL XXX RUM: 5.98% market share

No:5)CLASSIC GRANDE MATURED XXX RUM: 3.49% market share

No:6)MCDOWELL NO1 CELEBRATION RUM: 2.78% market share

No:7)COURRIER NAPOLEON GOLD BRANDY: 2.75% market share (Tilaknagar Brand)

No:8)MANSION HOUSE FRENCH BRANDY: 2.52% market share (Tilaknagar Brand)

No:9)FARMERS XXX RUM: 2.38% market share

No:10) WHITE MISCHIEF CLASSIC BRANDY: 2.26% market share

no doubt the market leader is United spirits with 3 brands in top 10 and with 23%+ market share its a commanding lead over everyone else... but we are looking at tilaknagar and where does tilaknagar stand in this "rat race"

Lets add the price/"Landed cost" of 750 ml case for above mentioned top 10 selling IMFL in kerala state

No:1) No1 Mcdowell  Brandy : 13.19%, Landed cost: 631.06

No:2) No1 HoneyBee Brandy :  7.40%, Landed cost: 631.06

No:3)OLD Port Deluxe RUM : 6.29%, Landed cost: 514.81

No:4)JAWAN SPECIAL XXX RUM: 5.98%, Landed cost: 426.55

No:5)CLASSIC GRANDE MATURED XXX RUM: 3.49%, Landed cost: 572.45

No:6)MCDOWELL NO1 CELEBRATION RUM: 2.78%, Landed cost: 585.07

No:7)COURRIER NAPOLEON GOLD BRANDY: 2.75%, Landed cost: 613.33 (Tilaknagar Brand)

No:8)MANSION HOUSE FRENCH BRANDY: 2.52%, Landed cost: 928.32 (Tilaknagar Brand)

No:9)FARMERS XXX RUM: 2.38%, Landed cost: 427.49

No:10) WHITE MISCHIEF CLASSIC BRANDY: 2.26%, Landed cost: 651.15

So as everyone can see.. at the premium end of the market... the top selling IMFL in kerala is "Mansion House Brandy" priced @ 928.32 (landed cost) 

I did some more digging into the top 20 brands in kerala and other top 20 brands with price above 900/- are

Ranked 13 MCDOWELL VSOP BRANDY: 1.65% market share, Landed Cost: 921.15

so in the top 20 selling brands on IMFL in Kerala the largest liquor consuming state in India.. 

Tilaknagar Mansion House brandy is most selling premium IMFL with 2.52% market share

2nd spot goes to MCDOWELL VSOP BRANDY with 1.65% market share..

Tilaknagar "COURRIER NAPOLEON GOLD BRANDY" is the brand that Tilaknagar is planning for competing for market share with United Spirits brands. Honey Bee & MCD No1 Brandy. priced close to Honey Bee & Mcdowell No 1 Brandy..

Landed Cost of Tilaknagar Brands & United Spirits Brands (above)

top selling brands in kerala for the month of April 2019(below)

recently govt has mandated that companies need to report their borrowing levels to the stock exchanges.. and Tilaknagar Industries has reported a borrowing of 280cr .. in BSE website..

United spirits reported 750cr of borrowing

Conclusion: Tilaknagar is going full steam ahead with cleaning its books.. and with premiumisation strategy.. @175cr market cap with 280cr of debt as of March 2019... company seems to have turned the tide.. the books will start looking a lot more presentable next year... expect the stock price to start ticking up.. as market takes notice of the change in fundamentals.. 

PN: this is not a recommendation service.. its my thought process or brain dump..for my own tracking purposes.. please consult a SEBI registered  investment advisor before investing...