Tilaknagar Q3 Results: Why Did the Alcohol Stock Incur a Loss Despite 95% Growth in Revenue?

Synopsis: Tilaknagar Industries reported a 95% YoY jump in Q3 FY26 revenue to Rs 664 crore, yet posted a Rs 105 crore loss due to Rs 169.42 crore in one-time exceptional expenses linked to the Imperial Blue acquisition. These acquisition-related costs materially impacted net profit despite strong operational growth and expanding scale.

The shares of this company, which is primarily involved in the manufacturing and sale of Indian-made foreign liquor (IMFL), were in the news today after the shares of the company fell despite reporting almost double revenue growth YoY.

With the market cap of Rs 9,368 crore, the shares of Tilaknagar Industries Ltd has fallen about 4.4% and reached a low at Rs 431.30, compared to their previous day’s closing price of Rs 451.20. The shares are trading at a PE of 39.3, whereas its industry PE is at 35.7. 

Q3FY26 Result highlights

The revenue from operations for the company stood at Rs 664 crore when compared to Rs 340 crore in Q3 FY25, growing by about 95 per cent on a YoY basis and, on a QoQ basis, growing by 67 per cent from Rs 398 crore in Q2 FY26.

The company incurred a loss when you compare the Q3 FY26 loss at Rs 105 crore to the Rs 54 crore profit in Q3 FY25 and, on a QoQ basis, when compared to a profit of Rs 53 crore in Q2 FY26. 

Why a loss if revenue doubled?

The company has shown exceptional items, mainly due to the acquisition of the Imperial Blue Business Division from Pernod Ricard India Private Limited. As per the information provided in the notes (refer to the acquisition details and accounting treatment), the company has treated the acquisition as per Ind AS 103 – Business Combination, and the liability for deferred consideration has been recognised at its fair value. 

Notably, acquisition-related costs of Rs 169.42 crores have been treated as non-recurring in nature and have been shown under “Exceptional Items” for the quarter and nine months ended December 31, 2025. These one-time costs associated with a transaction, such as professional fees and restructuring charges, are generally shown as exceptional items since they are not part of the normal course of business.

This is consistent with the acquisition-related exceptional item of Rs 169.42 crores. Thus, the significant exceptional item is related to expansion through acquisition and not to the loss incurred on a recurring basis, although it has a material effect on the net profitability for the period.

About the IB acquisition.

The acquisition of Imperial Blue (IB) makes a material addition to Tilaknagar Industries, as it will substantially increase its presence in the large and growing whisky category. As evident from the presentation, the whisky category represents 67% of the category mix, and Imperial Blue is present in a large category (75 million cases), providing an opportunity of 200+ million cases. 

Geographically, IB is dominant in the South (50%) and North (23%) markets, providing TI with a much-needed geographical diversification. With the addition of IB and Imperial Black to the existing Mansion House brands, the company will shift from being primarily a brandy player to a more balanced and premiumised portfolio.

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