Piccadily Agro Industries Ltd Management Discussions

INTRODUCTION

Piccadi\y Agro Industries Limited (referred to subsequently as Piccadily Agro? or the Company) operates across two distinct business segments - Distillery including Alcoholic Beverages (Alco-bev) and Sugar. Since its inception the Company has steadily developed its business across these domains. Today, while the sugar business focuses on refined sugar production and maintains its activities in line with demand conditions in a largely regulated market, the Company is more aggressively developing the distillery business with greater focus on the value-added alcoholic beverages business portfolio. With the core positioning of blending traditional manufacturing with innovation led product development. Piccadi\y Agro is fast evolving as a company with expertise across product value chains including sourcing, distilling, maturation, marketing and sales and distribution.

Chart A outlines the segment-wise portfolio of the Companys two business segments:

Distillery: This includes outputs like Extra Neutral Alcohol (ENA), Ethanol Country liquor (Indian Made Indian Liquor(IMIL) Malt and DOGS. Malt and ENA have been expanded into Alco-bev brands or as they are commonly referred to. Indian Made Foreign Liqour (IMFL)

Sugar: This includes outputs like sugar. molasses. bagasse and power co-generation

Incorporated in 1994, Piccadily Agro started its commercial operations as a sugar producing Company. It diversified its business portfolio in 2007 and set up a grain-based distillery. Subsequently, in 2010, a malt distillery was established, barrels procured and there was the commencement of the process of barrel maturation. Essentially, through these early years, the Company laid a strong foundation and developed on ground expertise on Alco-bev product manufacturing and development

During this phase of the Company?s journey, it was gradually recognised that the sugar business had significant overhang in terms of government regulations and controlled markets. and the scope for enhanced value creation was limited. Consequently, while continuing to manage efficiencies with cane sourcing and sugar manufacturing, from a growth perspective. the Company laid significant emphasis on developing its expertise and positioning across the value chain in the distillery and Alco-bev segment of the business.

By 2015. the Company was selling matured malt to well-known distilleries. This assured the Company that it had developed expertise in producing quality malt, which it could itself develop and sell as an IMFL product In this pursuit. in 2017 the Company launched its first branded product - Whistler? - a blended whisky. Subsequently, in 2022. it launched ?1ndri - an Indian single malt whisky, which got resounding acceptance in both the domestic and international markets.

The distillery and malt business has evolved into the Companys core focus area. In this business. through a phase of evolution. which included development of practical knowledge of product and market dynamics. the Company has moved up the value chain and is becoming largely a alco-bev player. This strategic transformation is clearly observed from the change in overall revenue share of the different businesses or product lines since FY2022. Chart B clearly depicts this overall transformation in terms of relative share of business segments in total revenues. As can be seen. there has been a steady shift away from the sugar business to the distillery business. where also there has been a move away from bulk commodity-based sales towards that of branded and premium alcoholic beverages. The numbers. too. reflect this story - share of sugar in total revenues has steadily reduced from 52.3% in FY2022 to 28.1% in FY2025. On the other hand. share of IMFL sales increased from 1.7% in FY2022 to 42.9% in FY2025. while that of other distillery outputs, which are mainly !MIL. ENA. Ethanol and DOGS has also reduced from 45.9% in FY2022 to 29% in FY2025. This data emphasizes that the Company, which had already started moving from sugar to the distillery business. has in the last four years become a predominantly an IMFL manufacturing company with growing share of premium branded IMFL products. This transition is at tlhe heart of the Companys strategic shift and its vision for the future.

CHART-B

There were two facets to the Companys growth path in FY2025:

First, in a sense FY2025 marked the culmination of phase of development for Piccadily Agro. A period when the Company learnt from its successes and failure, developed and tested new products, gained insights by developing and promoting new brands, and evolved global sales networks to support the business. Essentially the Companys single malt brand - Indri - which was launched in 2022 has succeeded in gaining strong recognition both in domestic markets and globally. With strong sales offtake, Indri further established its market leadership in FY2025 and maintained its buoyant growth trajectory. It has further widened its brand presence across markets in India and abroad. Driven by the alco-bev portfolio, the Company has now established a steady growth momentum from its existing businesses.

Second, to support the next phase of growth, the Company formulated and launched a series of key investments. Having adopted a business growth strategy that essentially focuses on establishing market dominance by offering products with unique characteristics, the Company needs to build on its internal capacities for the next round of growth.

This is imperative to maintain its existing market positioning and offer a wider portfolio of products through its growing global sales network. Such a build-up of scale creates better incentives for sales partners and also improves efficiencies in the sales and distribution channels, significantly enhancing the long-term sustainability of the Companys value creation proposition. Consequently, in FY2025, the Company launched its structured expansion path, which would require investments of an estimated Rs.1,000 crore in 3 years for capacity and business expansion. We have invested nearly Rs.450 Cr in FY2025, another about Rs.250 Cr is in the p ipeline while an amount of up to Rs.300 Cr. is planned to be invested for acquisitions and mergers. With the above, we are well on our way to increase our capacity by four fold, in line with the same we plan to grow our business by four times from our current base over the next 3-5 years. The funding of the same has happened through mix of fully convertible warrants and compulsory convertible debentures of Rs.262 Cr and Rs.161.25 Cr through Term Loans. In addition. the promoters have also infused an additional Rs.SO Cr. The balance is expected to be funded through internal accruals. This expansion is being undertaken in a calibrated manner with focus on enhancing product availability, quality and positioning. Essentially, the focus is on creating a product portfolio that has a strong Indian influence on its flavour, which are well suited for a global customer base.

Clearly, in the last few years, the Company has established itself as a key Indian player in the alcoholic beverages industry, particularly renowned for its innovation and expertise in malt spirits. Today, it has a robust portfolio of products that includes premium single malt whisky, blended malt whisky brands, premium cane juice rum (a first in India) and a premium Vodka. Across the portfolio of products with effective control over the complete product development and manufacturing process, the Company has developed capabilities for developing high quality offerings that are in the premium and luxury market segment fully supported by effective and focussed marketing, brand building activities and sales and distribution.

MACRO-ECONOMIC ENVIRONMENT

For the global economy, after a prolonged and challenging period of unprecedented shocks, there were signs of stabilization emerging through Calendar Year (CY) 2024. Inflation was down from multidecade highs. Labour markets were normalizing with unemployment and vacancy rates returning to pre-pandemic levels. Growth hovered around 3% in the past few years, and global output came close to potential. However, since February 2025, the United States (US) has announced multiple waves of tariffs against trading partners, some of which have invoked countermeasures. The environment has got vitiated further since the US near-universal application of tariffs on April 2. While hectic negotiations are underway, ratcheting up a trade war and heightened trade policy uncertainty will further hinder both short-term and long-term global economic growth prospects. Basically, scaling back international cooperation could jeopardize progress towards a more resilient global economy.

The uncertainty in global trade is fundamentally affecting economic conditions across the world. As Chart C shows, world economic growth is expected to reduce from 3.3% in CY2024 to 2.8% in CY2025. There are varying prospects across global regions depending on the inherent structure of their economies. USA. the country with the largest economy is expected to witness a reduction in growth from 2.8% in CY2024 to 1.8% in CY2025. Europe continues to be in a mode of economic slump - growth rates expected to lower further from 0.9% in CY2024 to 0.8% in CY2025. Economic activities are expected to be strong in both the Middle East and Central Asia with growth rates increasing from 2.4% to 3%, and Emerging and Developing Asia is also witnessing m uch stronger economic activity relatively speaking - although its growth is expected to reduce from 5.2% in CY2024 to 4.5% in CY2025. For Piccadily Agro, these different global market developments may have some bearing on the export potential of its products. but more importantly its business will depend on the implications of the changing import related trade policies that different countries adopt in this global economic environment - a factor that can become more uncertain by the end of Fy2025.

THEINDIAH ECONOMY

In this global environment. India also witnessed a slight slowdown in economic growth. Advanced estimates (January 2025) suggest Real Gross Domestic Product (GDP) growth reduced from 8.2% in FY2024 to 6.4% in FY2025 while Real Gross Value Add (GVA) growth reduced from 7.2% in FY2024 to 6.4% in FY2025. It is important to note that since FY2013. except for the COVID affected years. India has been steadily growing at an annual GDP growth rate above 5%. This trend continues and is captured in chart D.

The lower economic growth in FY2025 compared to FY2024 was due to certain temporary headwinds like election-led policy caution. irregular rainfall in the first half. and global trade uncertainties since September 2024. While these have contributed to reduction in growth levels, certain high-frequency indicators such as GST collections. auto sales. and FMCG growth are fast bouncing back in the last quarter of FY2025. pointing to a strong domestic engine driving the national economy.

Piccadi\y Agro is primarily in the consumer discretionary consumption goods space. and the Indian economy is largely driven by Consumption. In fact, with Z3% in FY2025 compared to 4% in FY2024, the share of Private Final Consumption Expenditure (PFCE) in Indias real GDP increased from a dominating 55.8% in FY2024 to 56.3% in FY2025. Chart E gives the data. Consumption expenditure continues to grow. In fact. Per Capital Real Financial Expenditure increased by 6.3% from Rs.69,528 in FY2024 to Rs.73,899 in FY2025.

It is important to note that the country has also been seeing steady rise in per-capita income. Chart F shows that in the last two years. Per Capita Real GDP has increased from Rs.1.16,216 in FY2023 to Rs.131,310 in FY2025. Essentially this means that there is more buying power in the economy and given that India is still largely a consumption driven economy, such increase in per capita income translates to increased demand for products like alcoholic beverages.

From a demographic perspective. the age profile of the population also highlights a favourable trend for increasing demand for alcoholic beverages. Basically, as depicted in Chart G. there is steady growth in working age population. Its share in total population has steadily increased from 56.6% in CY1981 to 68% in CY2023. A younger aspirational socially active population augurs well for consumer discretionary products. Within Alcobev products. the youth is more discerning while at the same time willing to experiment and cocktails find preference in many a gathering thereby providing a growing market for innovative Alco-bev products including related accompaniments like mixers.

Within the consumption space in India, it is important to note that there is a gradual shift in population structure in terms of income classes. As Chart H shows that between FYZOZO and FY2023, households with annual income more than US$50,000 per annum increased at the fastest rate of 14.5% from 4 million to 6 million. The next income level between US$10,000 and US$50,000 per annum grew by 176% from 91 million in FYZOZO to 107 million in FY2023. This increase in households at the higher income levels is translating into a growing preference for premium products in the Indian market and alcoholic beverages is no exception.

In fact, as per estimates by advisory firm Technopak. Indias luxury goods market was valued at Rs.926 billion as of CY2024. While there were setbacks caused by the COVID-19 crisis, this premium end market has witnessed a steady recovery since 2021. With the steady growth trajectory since then, it is estimated that the market will grow steadily to Rs 1.015 billion by the end of CY2025. In this premium space, atco-beverages is a major component with around a quarter share, and the share is expected to grow as it has the highest growth rate - with a projected Compound Annual Growth Rate (CAGR) of 16.2 %, the premium al co-beverage market is expected to grow from Rs.205 billion in CY2022 to Rs.321 billion in CY2025. This premium atco-beverage marketplace is Piccadily Agros core business focus area

THI ALCOHOL BEVERAGES MARKET - GLOBAL AND INDIA

According to data captured by the World Health Organization (WHO), the total market size in CY2023 was estimated at US$ 30 billion, with per capita consumption of 5 litres. Given the size of the population and the relative economic prosperity, China has the largest market of 4.5 billion litres followed by India at 3.2 billion. However, given maturity levels developed countries have much higher per capita consumption - France at 10.9 litres, Germany at 10 litres, UK at 9.9 litres and USA at 9.2 litres. In comparison China has 3.8 litres and India 3.2 litres. India is one of the fastest growing atco-beverage markets in the world. with distinctive characteristics that make it appealing to the top players of the industry. One of the biggest attractions is the size of the market and the continual evolution of the market as economic variables such as rising GDP. demographics, urbanisation and womens involvement in the workforce fuel demand and premiumization.

Table 1: Global Distribution of Alcohol Beverages Consumption
Country	Per Capita Consumption ol Alcohol in terms of Pure Alcohol (Litres)	Total-Size (Btllion Utres)	Spir(ts - Size (11111ion Utres)
China	3.8	4.5	2.6
India	3.2	3.2	2.91
USA	9.2	2.5	0.9
Germany	10	0.7	0.1
France	10.9	0.6	0.1
United Kingdom	9.9	0.6	0.1
World	5	30	13.5

Sowce: WHO

According to analysis by the research firm Technopak India, the global alcohol beverage market in CY2023 witnessed a varied distribution between distilled and undistilled alcohol. Distilled spirits, which include beverages like whisky, rum. and vodka. accounted for around 44% of pure alcohol consumption. Within this. whisky had the highest share of around 39%, followed by vodka at around 15%. Beer and wine contributed approximately 33% and 9% to pure alcohol consumption respectively (Chart I gives the data) In addition to this, with rising globalisation, there is a growing demand for regional and premium specialities. Consumers are open. to experiencing more of other countries culture. including food and drinks. Spirits from Asia such as Japanese Sake and South Korean Soju are being consumed worldwide, especially by younger generations. Another growing category is the Ready to Drink segment majorly comprising of spirit-based drinks.

India remains a predominantly distilled alcohol market, with over 82% of recorded pure alcohol consumption attributed to distilled spirits. This contrasts sharply with developed nations, where undistilled alcoholic beverages such as beer and wine collectively hold a larger market share than spirits. Despite the rising aoceptance of beer and wine in India, distilled spirits continue to dominate overall alcohol consumption.

The Indian alee-beverage market is categorized into four key segments: popular, prestige, premium. and luxury. As of FY2024, the value segment comprising popular and prestige categories dominates the market, contributing 91% of total sales, while the premium and luxury segments account for the remaining 9%. However, the market is witnessing a gradual shift towards premiumization. driven by factors such as a growing legal drinking-age population, rising disposable incomes, and increasing urbanization. By FY 2029, the share of the premium and luxury segments is expected to rise to 10%, outpacing the growth of the value segment. This shift towards premiumization reflects evolving consumer preferences and a growing demand for higher-quality alco-beverages in India. In fact, with greater accessibility of international brands and evolving consumption trends, premium spirits and wines are expected to be the key growth drivers in Indias alee-beverage industry over the next five years. Indias premium and luxury spirits segment has seen impressive growth, rising from Rs.11,316 crore in FY2019 to Rs.26,494 crore in FY2024, and is projected to reach Rs.44,612 crore by FY2029. This reflects a strong CAGR of 18.5% over the past five years and an expected 11.0% CAGR till FY2029 (Data: TechnopakAnalysis).

Globally, premium spirits continue to outperform standard categories globally due to younger consumers prioritising quality over quantity and seeking more refined drinking experiences. Consumer interest is growing in craft and small-batch spirits, primarily driven by perceptions of authenticity, superior craftsmanship, and unique taste profiles. Spirits leveraging unique ingredients, innovative distillation methods, and unusual ageing processes are increasingly attractive to consumers who seek differentiation and premium quality. Consumers increasingly prefer spirits that enhance social and special occasion drinking experiences, prompting greater interest in premium and distinctive products. International awards and recognition significantly influence consumer purchase decisions, establishing perceptions of premium quality, trustworthiness in spirits brands. The hotel, restaurants and catering (HORECA) segment remains a key channel for premium spirits, contributing over half of global trade revenue. Growth is driven by rising consumer demand for quality experiences and curated selections in hospitality settings.

ALCO-BEV REGULATORY ENVIRONMENTlNINDIA

The regulatory environment for alco-bev is complex and determined by states. -including levying excise duty, handling distribution. defining price and other controls. There have been certain positive state specific policy interventions that are improving the ease of doing business for the alcohol beverage sector.

Kamataka, for instance. reduced state duties by 10-15% across various alcoholic beverage segments. This adjustment helped reduce the price disparity between beer and other alcohol categories. improving the value equation for both consumers and manufacturers. Andhra Pradesh took a major step by opening its retail alcohol market to private players, thus fostering a more competitive and consumer-friendly environment.

Another example is of the state of Uttar Pradesh which has been experimenting with types of licences, location of shops, mixed or single product category vends. In FY2025 it undertook a lottery system for granting liquor shop licences. As a result of its experiments and initiatives, its revenue from liquor, over 5 years, has reportedly doubled to Rs 51,000 Crore.

While the macro-economic factors were favourable for Piccadily Agro?s business, there were some developments in the regulatory environment in India that also had a long-term bearing on its business. One of the most significant policy shifts in 2024 was the removal of Grain Neutral Spirit (GNS), or Ethyl Alcohol (ENA), for human consumption, from the Goods and Services Tax (GST) purview. GNS is a key ingredient in many alcoholic beverages, and its inclusion in the GST framework has been a long-standing issue. Although alcoholic beverages themselves were exempt from GST. states had varying interpretations of how GNS should be taxed, leading to inconsistencies. The GST reform has alleviated this financial burden, and it is expected to help close long-standing legal disputes between manufacturers and state governments, fostering a more predictable and transparent tax environment.

DISTIUERY AND THE ALCOHOL BEVERAGES BUSI.NESS

In the distillery and alco-bev space, Piccadily Agro is fast emerging as a Company recognised for innovation and craftsmanship with a focus on uniquely Made in India offerings. The Companys distillery and maturation facilities at Indri, Haryana located in North India with temperatures ranging from zero to 50 degree Celsius along with the terroir lends its u nique imprint on the maturation process offering distinct characteristics to the companys IMFL products especially the malt based ones.

Over the years, Piccadily Agro has built expertise on producing high quality, innovative, premium products across the alco-bev value chain. The process of development of internal expertise involved a decade of both successes and failures with products, but the learning experience and recent successes has resulted in rich capabilities on producing final products that standout in a competitive marketplace.

The Company is now focused on leveraging this product side expertise to develop a diverse portfolio of a\co-bev brands that have a premium positioning in their specific segments. Consequently, not only are more variants expected in the existing brand range, but more diverse products across spirits are also in the offing in the near to medium term. With a larger basket of products, the Company intends to position itself as a leading premium player in India and focused international markets. Clearly, the Company is committed to defining the future of premium and luxury Indian alco-bev spirits. The Company has embarked on a development path, which will further capitalise on both organic and inorganic growth opportunities in the a\co-bev space.

PRODUCTDEVELOPMENTAJ.lDMANUFACTIJRING

At the core of the Companys progress is the competence garnered over time in sourcing, product innovation, understanding of consumer markets and manufacturing. During this journey, the Company has gained experience in sourcing six row barley, which is unique to Rajasthan. To produce the finest malt spirits, Piccadilly only uses this kind of barley that is cultivated using an indigenous six-row method. which relies on organic and sustainable principles. Six-row cultivation brings smaller yields than other cultivation methods, but it lends a fruity, distinctive taste to the spirits made with it. No groundwater is extracted, and no chemical fertilizers are used during the farming process. Farmers re-use and recycle barley seeds every year. The byproduct from the spirit manufacturing process (DOGS) is not wasted but reused for cattle feed

Subsequently, the entire process of germinating, mashing, fermenting, boiling, distilling and maturing is carefully undertaken with utmost care on quality in process and product.

Blending is a delicate art. The master blender begins by nosing samples in tulip-shaped glasses and then carefully selects from a wide palate of ex bourbon first fill, virgin oak, ex wine and sherry casks. Different malts, both peated and non-peated, are considered in combination and are then left to proverbially marry in casks. This process is undertaken with significant care and expertise at Piccadily Agro and is at the core of the Companys product development.

MATURATION, EXPERIMENTINGAND INNOVATING

There is a well-structured maturation, experimenting and innovation process. In this, the stillman tests and judges the distillates. The newly distilled. colourless and fiery spirit is reduced to maturing strength, 63% alcohol by volume. It is then transferred into oak casks which may have previously contained wine, bourbon, or sherry. The maturation process begins. and the whisky becomes smoother, gains flavour, and colour from the cask. During this phase, some of the higher alcohols tum into esters and other complex compounds, which subtly enhance the whiskys unique flavour.

The entire process is supported by procuring hand-selected casks from various wineries across the world. The imported oak barrels are assembled, cared for, toasted, charred and repaired by the Companys expert in-house coopers. The maturing process has a unique tinge at the manufacturing facility at Indri, which witnesses temperatures from zero degrees Celsius to as high as 50 degrees Celsius, thereby speeding up the liquids interaction with the woods, distillation and bottling.

MARKETING AND PRODUCTPOSmONING

From a strategic perspective, the Company is positioning itself effectively in this market space with a portfolio of products that lay emphasis on innovation and elevation to create market leadership. This is being achieved by developing distribution relationships that support expanding horizons, and a back-end production infrastructure that can support this accelerated growth. The entire growth drive is based on a strong foundation of financial stability.

The Company tasted its first major success in its objective of creating leading Indian brands with the launch of "Indri" in 2022. This flagship Indian single malt whisky brand caters to discerning consumers who appreciate quality and craftsmanship in spirits. Having received several global awards, the brand has performed exceptionally in the market, recording over 100,000 cases in sales within 2 years of its launch. Indri continued with its strong performance growing volume.s by over 40% in FY2025. In the last 3 years the Company has introduced 7 distinct Indri expressions/ editions like Diwali edition. Founders Edition 11YO, City editions which have been well received.

For effective consumer positioning, innovative designs are constantly created for packaging and promotion. Curated events for tasting, participation in contests, launching and conducting events for bartenders (like Camikara Millionaire Bartenders Challenge conducted between Jan to April, 2025) have all added to executing the companys vision of being a significant global player with products made in India.

By driving premiumization and setting new benchmarks in craftsmanship and innovation, the Company is at the forefront of Indias evolving spirits landscape, supported by a thorough understanding of market dynamics and a emphasis on fine craftsmanship, Piccadily Agro caters to a select clientele who value not only quality but the artistry of innovation. With relentless pursuit of excellence, the Company not only produces alcoholic beverages for its customers but creates an -experience that transcend.s the ordinary where timeless tradition meets contemporary mastery. Each of its offerings, redefines the art of indulgence by refining the very essence of its premium positioning.

Across the product offering, the Company has positioned its distinctive brands. In the single malt whisky space, its flagship brand - Indri - has gained global recognition and evolved into a trailblazer in redefining Indias premium spirits landscape with unparalleled elegance and character. Its premium cane juice-based rum - Camikara - is focusing on re-imagining the product category by blending creativity with excellence. In the blended malt whisky space, the offering Whistler is barrel aged and a balance of tradition and modernity. Each brand in the portfolio is in different stages of their evolution.

Launched in 2022, 1ndri has in a short span of time become one of the fastest-growing single malt whiskies in the World. Having received over 50 prestigious accolades. Indri is today globally one of the most awarded Indian single malt whiskies. The accolades include Best Indian Single Malt and Best Whisky In The World.?

On the back of a strong performance in FY2024, Indri sales volumes grew by a further 37% in FY2025. Importantly, Indri captured an estimated 55% share of the Indian Single Malt export market. The Company continued to introduce different products under the Indri offering. This included Indri Game of Thrones. Indri City Series Edition. Indri Diwali Collectors Edition 2024, and Indri Founders Reserve 11-Year-Old. Each of these products has distinctive qualities and were very well accepted in the market. Even with premium pricing the market absorbed these offerings at a rapid pace.

In FY2025, the Indri Experience Centre was launched at the Indri manufacturing facility in Haryana to offer an immersive introduction to whisky making and tasting, enhancing consumer engagement and brand visibility. This includes guided tours and curated tastings and interactive exhibits. The facility features sustainable architecture inspired by Northern Indian havelis and includes a recreational golf green to support its premium positioning. This has been built with provision for scalability to support future brand growth.

Camikara. derived from the Sanskrit word meaning "liquid gold,? is India s first Pure Cane Juice Premium Aged Rum, redefining the countrys rum legacy. Aged in American oak barrels, Camikara stands apart with no added colours, flavours, sugar, or spices, delivering a truly authentic and refined experience. Launched in 2023, the brand is slowly penetrating the market. In FY2025, the brand grew by 310%, however this is on a small sales base in FY2024, but it does reflect an initial phase of pick up in sales. During FY2024, the Camikara rum 8-year-old became the first Indian rum to ever win a Gold Medal at the Global RUM and CACHACA Masters 2024, and secured USA Spirits ratings -Silver 2024.The Camikara rum 3-year-old became the 1st Indian Rum to ever win a silver medal at the Global RUM & Cachaca Masters 2024 and got a bronze at the London Spirits Competition.

To further strengthen the brand positioning in India, the Company during January to April, 2025 organised ?camikara Millionaire Bartender Challenge?, a national level cocktail competition created to identify and recognise Indias leading bartenders. This brought together top talent from across the hospitality sector. The initiative aligned with the strategy of engaging the on-trade channel and enhance product-led brand presence. The winners prize money was Rs.10 lakh and each participant was insured for Rs. 10 \akh, as a mark of respect for those behind the bar and the skill they bring to their craft.

The brand has also been supplemented with the introduction of the all-new Camikara Non-Alcoholic Mixers in two vibrant flavours - Mojito and Mai Tai. Expertly crafted, these tropical mixers capture the essence of iconic cocktails. Camikara mixers deliver a premium, bar-quality experience - bringing the spirit of indulgence home.

During FY2025, the Company has participated, domestically and internationally, in Whisky and Spirits shows and events. and also curated events to promote the brands -Indri and Camikara. The Whistler brand grew by 54% in FY2025. The brand is being rejuvenated, and a repositioned brand launch is underway.

With the strong growth in the branded IMFL segment, there was internal consumption of malt. and accordingly external B2B malt sales was not undertaken in FY2025. It is pertinent to note that IMFL sales have higher profit margins than B2B malt sales.

SALES AND DISTRIBUTION

While product quality is a critical competitive strength. to succeed in this business it is essential to have a strong sale and distribution backbone. Given the Companys strategic focus. it is important to develop this in India and across the world.

In the domestic markets. the Companys presence extended to 28 States and UT (including CSD) in FY2025 compared to 20 in FY2024. Its presence has extended to over 16,000 plus retail stores including On Trade in India which are growing rapidly, and is a significant growth over 6,700 stores where Piccadily product were present in FY2024. In an important development. the Company entered CSD and Paramilitary distribution outlets in FY2025.

For positioning in international markets. the Company extended its global sales presence from 22 countries in FY2024 to 28 countries in FY2025 for IMFL products in terms of presence in Indian Duty-Free shops, it extended from 8 in FY2024 to 16 in FY2025. Chart J gives the domestic and international spread of the Companys sales channels

This sales and distribution network is critical for the Companys future growth. As the portfolio of products increase, the strength of partner relations will grow as they get an opportunity to sell more diverse products and with the support of these partners, the Company will have the core sales force in place to sell a wider portfolio. This will also translate into lower per unit sales expenditure as the Company growth. This sales and distribution structure is something the Company will continue to develop in a strategic manner, as it is a core business capital.

Of the estimated 100,000 retail outlets the companys products are .available in over 16,000 including On Trade (HORECA). The in-house sales team has nearly doubled in FY2025 vs FY2024 and expected to grow further. Additionally, team and also options in export markets incl duty free are being buffeted

OPERATIONS AND EXPANSION - OlSTILLERY

Today, the Company is well positioned to further develop the distillery business with particular focus on growing the branded IMFL portfolio. Already, this emphasis has translated into much higher profitability of the Companys overall business.

At Mahasamund, Chattisgarh, the Company has purchased land and is setting up 210 KLPD distillery. The project progress is on schedule with construction of facilities underway. The machinery for the factory has been ordered and delivered at site. It is expected to be commissioned in HZ, FY2025. The company chose Chhattisgarh for its greenfield expansion considering the investor friendly state regulatory system and the proximity to sourcing various raw materials planned for future growth. As the business settles down, the Company will upgrade to value added investments.

The Company has also forayed into setting up a malt distillery at Portavadie, Scotland,. For this, land acquisition, statutory clearances and financial tie-up has been completed as of May, 2025. The process of evaluation of plant and machinery is underway. The facility is expected to be commissioned in FY2027, subject to approvals. The company chose Portavadie for its international expansion mainly on account of the fact that Scotland continues to be the hub with respect to Single malt, once the malt distillery is operational it can provide quality Scottish malt to the Companys existing and new products portfolio as also access international markets.

The above expansions, as mentioned earlier, would require investments of an estimated Rs. 1,000 crore over the next 3 years. The expansions include (i) at Indlfi, Haryana. plant and machinery, procuring additional barrels to increase the count from 45,000 in FY24 to over 100,000 by FY27, barrel storage facility (bl at Mahasamund, Chhattisgarh for land and plant and machinery, {c) at Portavadie. Scotland for plant and machinery.

The benefits of the increased production capacities would start to reflect in the revenues and profits of the Company post maturation of the products being developed at the facilities, which will start at least between 1-3 years from the commencement of production and filling of barrels for maturation

THE INDIAN SUGARMARl<ET

Indias sugar industry is an integral component of its agricultural economy. It is essential for meeting domestic consumption needs. contributing to the Ethanol Blending Programme (EBP) of the nation. and also stands as one of the significant global exporters of sugar. Indias sugar production for the FY2024-25 season is estimated between 25.8 and 26.4 million metric tons. revised downward from earlier forecasts of 272 million tons. The decline is attributed to a combination of weaker sugar recovery in Uttar Pradesh, lower yields in Maharashtra and Kamataka. and the diversion of approximately 3.5 million tons of sugar for ethanol production. Despite the output decline. India is projected to close the 2024/25 season with 5.4 million tons in stock. well above the minimum requirement of 4.5 million tons for two months con sumption. India permitted the export of 1 million tons of sugar in January 2025. As of March 2025, approximately 300.000 tons had been shipped. with contracts signed for 600,000 tons. However, rising domestic prices have slowed export momentum. Mills are cautious about further deals due to narrowing margins and increased domestic demand during the summer months. Retail sugar prices have remained stable at Rs 43- 44/kg, with only a 5% increase over the past two years- modest compared to other staple commodities. This has helped insulate consumers despite rising input costs and declining cane recovery rates. In a highly regulated market for the sugar production unit, with lower overall demand, FY2025 remain a difficult and highly competitive year

THE COMPANYS SUGAR BUSINESS

The company has a sugar mill with a cane crushing capacity of 5,000 tonnes crushed per day (TCD) and partners with over 5,000 farmers. Sugar over the years has become a highly regulated industry with the respective state government having a major role. The Company continues to operate within the prevailing business structure and regulations but profitability of the business has been under pressure over the years including in FY2025.

The company does not expect any significant contnoution from the sugar business given continuing governmental controls. Accordingly. it is evaluating options including divestment or demerger of the sugar business.

OTHER CORPORATE INITIATIVES

On the administrative front acknowledging that the expansion drive will warrant a growing and focused managerial workforce. the Company has invested Rs.11 crore in purchasing a new corporate office at Gurugram. which is at present undergoing refurbishment and expected to be active from H2 FY2026.

In FY2025, Piccadily becam e the 1st Indian A\co -bev company to adapt NFC Technology to combat counterfeiting. With this initiative, it has raised the benchmark by setting new standard in safety, innovation and consumer protection amid rising counterfeit concerns. The initiative adopts smart verification technology where through QR codes, NFC tech lets customers tap bottles to instantly verify authenticity and batch details directly through their smartphone without any requirement of a specific app.

As the Company enters a new growth phase, there is now a strong emphasis on developing and implementing processes and automation tools across the business. To begin with in FY2025, the implementation of SAP was completed. which h as brought in essential controls into the business across operations fundamentally from a financial perspective.

FINANCIAL HIGHLIGHTS

Table 2 gives the financial highlights of the Companys performance in FY2025

TABLE 2 STANDALONE (P/l)
in Rs. Crore	FY2025	FY2024
Total Revenue From Operations	886.3	828.1
Other Income	6.6	0.8
Total Income	892.8	8289
Materials Consumed	41Z2	364.4
Changes in total Inventories	-88.9	-ZS
Excise Duty on Sales of Goods	68.1	48.7
Employee Benefit Expenses	44.0	32.6
Power. Fuel etc	29.1	33.0
Other Expenses	2318	205.1
Total Operating Expenses	7014	676.3
EBIDTA before Exceptional Items	191.4	152.6
Depreciation	19.4	182
EBlT before Exceptional Items	172.0	134.4
Fmance Charges	2Z8	15.7
PBT before Exceptional Items	144.2	118.7
Exceptional Items Gains	0.0	29.4
PBT	144.2	148.1
Tax Expenses	39.5	36.0
PAT	104.7	112.1
Total Comprehensive Income (after tax)	103.5	112.1
PAT excluding exception items	104.7	85.7
EPS (in Rs.) exduding exception ttems	1109	9.09

In terms or the profit and loss account. key financial highlights or the Companys standalone performance in FY2025 are:

• Total income increased by 7.7% to Rs.892.8 crore in FY2025

• On the costs fTont. while most other costs increased marginally. power and fuel costs reduced by 11.8% to Rs.29.1 crore in FY2025 and its ratio to net sales reduced fTom 3.7% in FY2024 to 3.3% in Fy2025

• EBIDTAincreased by 25.4% to Rs.191.4crore in FY2025 and EBIOTA margin increased from 184%in FY2024to 21.4%inFY2025

• With the growth objective in place and increased debt levels. finance costs increased by 77.2% to Rs.27.8 crore in FY2025. As a percentage or sales. it has increased from 1.8% in FY2024 to 3.1% in FY2025. Part of this is on account of CCDs raised in Sept. 2024. which will convert to equity on Sept. 9. 2025

• Adjusting for exceptional items comprising sale or a property in FY2024. PBT increased by 21.5% to Rs.144.2 crore in FY2025. and PAT increased by 22.1% to Rs.104.7 crore in FY2025.

SEGMENT RESULTS: IMPROVED PROFITABILITY

Today. the Company is well positioned to further develop the distillery business with particular focus on growing the branded IMFL portfolio. Already. this emphasis has translated into much higher profitability of the Companys overall business. If we consider the financials of the sugar and distillery segments of the businesses only and not include any inciden tal other incomes, Chart K shows. that at the Consolidated Company level. profitability margins in terms of ratio of Profit Before Interest and Tax (PBIT) to sales increased from 16.3% in FY2024 to 19.7% in FY2025. This growth has been singularly driven by the distillery segment - margins expanding from 23.7% in FY2024 to 28% in FY2025, refer chart K On the hand, the sugar segment remained affected by external factors related mainly to governmen t controls on the market - a low profit margin of 1.4% margins in FY2024 moved to losses with margins of (-)1.3% in FY2025.

Balance Sheet
in Rs. 0-0fe	FY2025	fY2024
Property. Plant & Equipment	2819	217.8
Capital Work in Progress	182.2	26.l
Other Tangible Assets	0.0	0.0
Biological Assets	0.0	0.1
Financial Assets	817	77.9
Other Non Current Assets	49.3	16.9
Total Non Current Assets	595.1	338.9
Inventories	303.2	196.0
Financial Assets	204.l	1718
Other Current Assets	43.7	32.3
Total Current Asset	5510	400.2
Total Assets	11461	739.0
Equity Attnbutable to Owners of the Parent Company	682.9	340.9
Borrowing	142.0	59.4
Provisions	16	0.9
Deferred Tax Liabilities • Net	16.6	14.9
Other Non-Current Liabilities	5.9	18.4
Total non Current Liabilities	166.2	93.5
Borrowing	166.1	112.4
Trade Payables	53.0	110.1
Other Financial Liabitities	17.5	5.1
Current tax liabilities (Nerj	18.l	26.5
Other Current Liabitities	40.5	50.4
Provisions	18	0.2
Total Current Liabilities	296.9	304.6
Total Equity and Liabilities	11461	739.0

As mentioned earlier. the Company has embarked on a capacity and business expansion which warrants investments to the tune of Rs.1.000 crore over 3 years. As part of the same. in FY2025, the Company raised Rs.262 crore through preferential allotment in September 2024 and an additional Rs.SO crore infusion from promoters. The Preferential Issue/ Allotment was structured for up to 6,72,041 Fully Convertible Warrants (FCW) and 28,49,448 Compulsory Convertible Debentures (CCD) both at an Issue Price of Rs. 744/- each to certain investors, who are part of the Non-Promoter/Public Shareholder Category. The non promoter FCW investors converted their warrants to equity shares in June, 2025. The balance funding is expected to be generated from internal accruals and or need based incremental debt

From the assets perspective: the value of property, plant and equipment has increased by 29.4% to Rs.281.9 crore in FY2025, while capital work in progress increased almost seven times to Rs.182.2 crore in FY2025. These are part of the expansion drive launched inFY2025

This asset growth has been funded by a mix of equity. quasi debt and debt. To begin with the preferential offer and CCD has resulted in a 100% growth in net worth. Equity attributable to owners of the parent company has doubled to Rs.682.9 crore as on 31st March 2025. The scale of expansion has also warranted growth in long term debt which has increased by 239% from Rs.59.4 crore as on 31 March 2024 to Rs.142 crore as on 31 March FY2025.

With the growth plan execution firmly on schedule, the overall size of the companys balance sheet has increased by 55.1% from Rs.739 crore in FY2024 to Rs.1146.1 crore in FY2025. While the operating business focuses on improving margins and growing a more value-added portfolio of products. the Company is putting in place capacities to scale up and returns from this capacity expansion will start coming on stream in the near future and is core to the future value generating proposition of the Company

Piccadily Agro had acquired Portvardie Disttllers and Blenders in Scotland. Essentially, this entity adds to the consolidated financials of the Company. After a period of putting together all regulatory requirements. the Company has now commenced setting up its facility in Scotland. With land acquisition completed. the factory construction has commenced, and equipment is under process of sourcing. These developments are reflected in the balance sheet. while the revenue side of this business will get reflected once the plant gets operational and business commences which is expected in FY2027. Consequently, on a consolidated basis: Capital Work in Progress increased 4.8 times from Rs.41.9 crore in FY2024 to Rs.200.9 crore in FY2025. This value is 10.3% more than the Rs.182.2 crore capital work in progress noted in the standalone balance sheet

So far. the Scotland asset financing has been done through the parent company, consequently, there is no other material difference between stan d-alone and Consolidated financials of the Company. As the Scotland facility develops, these differences will start getting reflected in the financial results, as tlhe independent financials of the Scottish entity builds up.

Details of significant changes as required under SEBI(LODR) Regulations 2015 are as under:

	RATIOS
Sr.no. Particulars	2024-25	2023-24	% Increase/ Decrease	Explanation For Change
i Debtors Turnover Ratio	6.48	8.04	24.07	--
ii Inventory Turnover Ratio	1.94	2.58	32.99	Due to increase in average inventory in current year in comparison to previous year
iii Interest Coverage Ratio	15.72	9.17	145.18
				Due to increase in the current
iv current Ratio	1.98	1.40	41.27	Assets & decrease in current liabilitv
V Debt Equity Ratio	0.45	0.50	-10.46
vi Operating Profit Ratio (%)	19.30	16.09	116.26
vii Net Profit Ratio (%}	11.81	13.54	-12.79
viii Change in Net Worth Ratio (j )	100.32	4780	108.98

OUTLOOK

The Company is clearly in a transition phase, well poised to embark on its next passage of growth. The focus is on aggressively growing the Alco-bev space, with emphasis on value creation. The sugar business is under evaluation for a demerger or divestment. As the company continues to grow its distillery business and within that IMFL, the profits are expected to grow further. The profit margins shall depend on the proportion of IMFL. sales. the margins on which are higher compared to other distillery products.

RISKS &CONCERNS

Key risks are demand & regulatory control. Demand is dependent on economic environment as also competition. Given alcohol is a highly regulated industry, any adverse changes can impact performance of the company. Further, recent developments on tariffs may effect the performance.

INTERNAL CONTROl.SANDTHEIRADEQUACY

Piccadily Agro has proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition, and those transactions are authorised, recorded and reported correctly. Internal controls are supplemented by an extensive programme of internal audits, review by management and the Audit Committee, and documented policies, guidelines, and procedures. The internal control system is designed to ensure that financial and other records are reliable for preparing financial information and other data, and for maintaining accountability of assets. SAP has been implemented and utilisation of its various modules in varying degree of usage as of end of FY2025. The Company shall continue to strengthen and improve its controls and processes in line with its growth objectives.

CA\JTIONATNSTATEMENT

Statements in this Management Discussion and Analysis describin91 the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include a downtrend in the Indian online sector, advertising spends, new disruptive technologies or business