Key highlights of the call

The company's net sales for the quarter ended December stood at Rs 97.66 crore while net profit stood at Rs 5.4 crore. For the nine months period, net sales stood at Rs 271.91 crore while net profit stood at Rs 17.34 crore.

Out of total revenue, 44% is from country liquor, 14% from Industrial alcohol, 9% from own brand IMFL and 27% from franchisee IMFL.

Own brand IMFL contribution to total revenue in Q2 was 7% and is expected to go up to 11% in Q4.

The company has two modern distilleries at Behror in Rajasthan and Samalkha in Haryana. Each of the units has a licensed and installed capacity of 14.4 million Bulk Litres (BL) p.a. aggregating to 28.8 million BL. Both the units are operating at almost 100% capacity

GSL is in the process of enhancing the capacity of Industrial Alcohol to 24.3 million BL per annum in each unit. The total capacity after expansion in both the factories will be 48.6 million BL per annum. This expansion will provide the company with economies of scale as well as reduce cost of production. It is expected to get completed by this financial year end. The capital expenditure for it is Rs 70.5 crore.

The Company has a strong position in domestic country liquor (CL) segment with significant market share of 22%, 17%, 20%, and 15% in Rajasthan, Haryana, Delhi and Chandigarh respectively

The Company has identified the branded IMFL category as the key growth driver for the future. It is aggressively concentrating on expanding its presence in this segment as it has the highest margins among all product categories. Its strategy is to establish a pan India presence for its IMFL brands and has launched a marketing campaign for the same. The growth in this segment will directly add to the overall margins given the low share of branded IMFL in the current volumes.

GSL is also in the activity of bottling for some of the big well-known distillers. The recent tie up with Jagatjit Industries and existing tie up with ABD India totaling to 2.2 million cases p.a. has provided an impetus to this line of business. It also plans to increase its bottling capacity to cater to increasing demand of the bottled products segment.

The company is looking for supplying to Canteen Store Department (CSD) in FY11 by purchasing cluster of brands that are supplying to it. At present company don't have any supply for CSD. The company is expecting Rs 30 crore to Rs 40 crore sales from CSD in FY11.

The grain prices for Haryana plant for Q1 was Rs 1028 per quintal, for Q2 Rs 1081 per quintal and for Q3 Rs 1034 per quintal. For Rajasthan plant for Q1 was Rs 992 per quintal, for Q2 Rs 1043 per quintal and for Q3 Rs 950 per quintal.

The company has 15% margin in its own branded IMFL and 5% in franchise IMFL segment. The company's overall margin will increase with the increase in share of own brand IMFL in total portfolio.

The company has 15% margin in country liquor. North India is seeing 20% growth in country liquor.

The company's packaging cost to net sales is 35%.

The company has Rs 30 to Rs 35 per liter realization in country liquor segment and Rs 250 to Rs 260 in own brand IMFL.

The country is looking at expanding its distribution network in Andhra Pradesh, Karnataka, Kerala and part of East India.

The company sold 48 lakh cases in country liquor, 5.5 lakh cases in franchisee IMFL and 2 lakh cases in own brand IMFL for the nine months ended December.

For FY11, the company expects to sell 1 million cases of own brand IMFL in civil market.