India's Top 500 Companies 2016

India's Top 500 Companies 2016


What are the key drivers of liquor industry in India?

Key drivers are the factors like Urbanization, Favourable Demographics, Change in Social Outlook towards Acceptability of Liquor, Rise in Disposable Income & Increased Alcohol Accessibility and Availability. Majority of the Indian population are in the age group of 20 to 50 years, who consist of existing and potential consumers of liquor. Over the decade, there has been sea of changes in these parameters, all leading to favourable incremental market volume of liquor.

As a result of the above, it could be experienced that India is one of the fastest growing liquor markets in the world, which being the 3rd largest in the world. In emerging countries, increasing demand of liquor is due to large young population size and rising disposable income. Spirits comprise of rum, whisky, vodka & gin is with a market share of about 36% and beer is about 13%. Balance 51% is comprise of country / cheap liquor: 48% and wine etc.: 3%.

Kindly elaborate on your company's journey since its inception.

Pincon Spirit Limited has started its journey in the year of 1978 in the name and style of Sarang Viniyog Limited and subsequently its name was changed to Pincon Spirit Limited in in FY 2010-11. The company is engaged in two distinct business lines:

PSL initiated its operation with wholesale distribution of IMFL in West Bengal for all the leading brands of IMFL. After gaining strong market bonding with the around 2000+ retailers, PSL rolled out its first owned brand of IMFL being Pincon XXX Matured Rum. Subsequently down the years different other own brands of IMFL in rum, whisky, vodka, gin etc. were launched in the market, along with geographical spread in other states viz. Karnataka, Odisha, Jharkhand, Uttarakhand.Presently PSL is successfully having market presence with 11 of its own brands of IMFL and tie up with 20000+ retail outlets.

Entry into FMCG segment with edible oil in 2013 opened up another vertical in the company's business line. This segment proved to be a substantial contributor to the top line of PSL's business.

Corporate foot print in cheap liquor in 2015 with own brand of country liquor being Pincon Bangla No. 1, was yet another phenomenal success story in PSL's business line. With initial overwhelming market response in this segment, there were brand acquisitions in country liquor by PSL in 2016, whereby PSL catapulted into being the largest player in country liquor segment in the country.

What are the key strategies adopted by your company to reach today's pinnacle?

As mentioned earlier, PSL commenced its business operation in IMFL through whole sale distribution of all major reputed brands in West Bengal. Having experienced the market pulse of consumer behavior, marketing strategy for own brand of liquor products were broadly devised in terms of the following parameters.

Broadly, based on the above, Pincon Spirit Limited (PSL) has liquor products available in different value chain. PSL is having products in entry level with price band of around Rs.140/- per 750 ml of pack size and in in regular and semi-premium segment the price band is Rs.260/- to Rs.415/- per 1000 ml pack size. It is proposed to introduce Scotch whisky in premium segment in the price band of Rs.1000/- to Rs.2500/- per 750 ml pack size. Thus with ultimate presence from entry level to premium level price range products, it could be said that PSL would have participation in the entire value chain, making it unique company to have so.

PSL is having country spirit products which are produced using best of the technology confirming to the highest degree of standards and hygiene. The ENA used is grain based, making the products of superior quality, leading to mass acceptance by the consumers and the quality control measures make the products government regulatory compliant.

PSL with its aggressive marketing policy with extensive coverage of sales outs lets across different states has established fast growing footprint.

Further, PSL adopted lateral strategy of graduating the consumer at the bottom-of-the-pyramid to a superior product rather than compete with some of the established brands and take years to carve out an identity. This enabled the company to address a large chunk of IMIL consumers to IMFL segment who were attracted by the price-value proposition. All these strategies enabled the company go beyond enhancing the market share and enter new markets and also create a unique entry in an unexplored price segment. PSL is the fore runners to produce and market country liquor with a corporate strategy and corporate look.

Kindly give us some brief about your IMFL and IMIL segment performance. Also share with us Pincon's operation's network.

The WB?s Government policy of issuing composite licenses made it possible for IMFL and IMIL manufacturers to market their products from the same retail points. This 'open market' approach increased the throughput of liquor brands and products through retail outlets. Since start of liquor manufacturing operations, the company?spresence in WB has grown from five districts in 2013-14to have presence in most of the districts in West Bengal.

Pincon entered the IMFL segment through wholesale distribution and subsequently graduated to blending, bottling and marketing proprietary brands in West Bengal, followed by fast growing foot print in Karnataka. PSL is also having increasing market share in Odisha, Jharkhand and Uttarakhand. The company produces proprietary liquor brands with a manufacturing capacity of 120,000 cases per month. The company?s product portfolio comprises 11 brands across five categories (rum, whisky, vodka, brandy and gin). The company is also engaged in wholesale distribution of leading liquor brands for which it enjoys tie-ups with more than 9,000 licensees in WB and other states. IMFL segment contributes 45% to the total revenues of company?s revenue. In 2015-16, revenues of IMFL segment grew by more than 14% to Rs.5.9 bnand sales volume grew to 11 lac + cases. During 2015-16, the company also launched Ruby Gold Gin, which was well received by the customers.

Pincon entered the IMIL segment in 2015 and currently has the manufacturing capacity of 25 mn bottles per month, across three manufacturing facilities in Central and South Bengal. The company has three proprietary brands in the IMIL segment and has 4,800 points-of-sale. During 2015-16, the company reported 100% growth in revenue of IMIL segment and total revenue from IMIL segment touched Rs.1.2 bn during the same period.

The company currently manages Nine blending and bottling facilities (Five owned and Four contract manufacturing) ensuring that products reach 9,000+ retail outlets in WB, Karnataka, Odisha, Jharkhand and Uttarakhand, quickly and cost-effectively. It also has its own oil refining and packaging plant in WB.

How did your company perform during the financial year 2015-16?

PSL's revenues increased by 43% from Rs.6.93 bn in 2014-15 to Rs.9.9bn in 2015-16. EBITDA grew by 64% from Rs.350 mn in 2014-15 to Rs.580 mn in 2015-16 while it?s Profit after tax increased by 53% from Rs.170 mn to Rs.260 mn during the same period. During 2015-16 the company acquired an IMIL bottling unit of National Industrial Corporation (Nicols) in Asansol. The company has also embarked on the acquisition of two blending and bottling units in Dankuni and Barahanagar. The company also acquired two popular IMIL brands - Bengal Tiger (more than 20 years old) and Uddan (more than 15 years old) ? that are expected to translate into enhanced off-take in 2016-17.

What are your company?s future plans?

We have a wide range of future plans in order to take PSL to the next level of growth. Following are few measures we plan to take to enhance growth: