Allied Blenders posts Q1 EBITDA margin of 11.8%

Allied Blenders & Distillers [

] reported an EBITDA margin of 11.8% for Q1FY27, even as gross margins expanded by 280 basis points year-on-year to 46%. The Prestige and Above portfolio drove growth, contributing 59.3% of branded sales. Volumes for ICONiQ White surged 33.8% to 3.1 million cases, while segment realisations rose 4.9% to Rs 1,293 per case. However, global supply-chain disruptions dealt a Rs 24 crore blow to profitability, dragging operating EBITDA down to Rs 115.5 crore and pulling margins down from the previous quarter's 16.8%. While gross metrics look healthy, headline numbers miss the operational friction caused by external shocks and rising overheads. Backward integration projects—such as the Telangana PET facility and the Rangapur malt distillery licensed for 4.4 million bulk litres annually—aim to capture a 300 bps EBITDA margin improvement by FY28. Furthermore, the India-UK trade agreement lowered Scotch import duties from 150% to 75%, potentially adding 70–80 bps in FY27 savings. Yet, sticky issues remain, including Rs 400 crore in outstanding receivables and limited pricing power in state-regulated markets. At 37x FY29E earnings, valuations factor in steady execution. Watch for receivables recovery, utilisation rates at new distilleries, and the translation of Scotch duty cuts into net margin gains. View: Overweight.