Following are key highlights

• The company's consolidated net sales for Q2 was up by 13% to Rs 199.81 crore. The revenue growth is on the back of deeper brand penetration in existing markets along with entry in new regions coupled with higher brand & marketing initiatives. OPM was down by 377 bps to 22.02%. The net profit inclined by just 1% to Rs 16.04 crore. For H1 FY14, the net sales inclined by 15% to Rs 379.95 crore and net profit was up by 24% to Rs 33.31 crore. The volume was up by 26% to 4 mn cases for Q2 and up by 27% to 7.7 mn cases. Including manufacture brands, volume growth is 27% which translate into sales growth of 30%. Organic growth was 10% - 115 in H1 FY14

• Mohan Breweries and Distilleries Limited (MBDL) volume for Q2 was 6.5 lakh cases.

• The mgmt said that the industry is not even growing at 10% - 11% and company has grown above industry. The mgmt also said that it is seeing market leader vacating the lower end of the market. Presently industry is divided into 2 segments;- 1) higher profitability with lower consumer base and 2) lower or negative profitability with high consumer base.

• For Q2. Brandy volume grew by 25% to 2.03 mn cases, Whisky by 33% to 1.01 mn cases, Rum by 23% to 0.87 mn cases and Vodka & Gin by 67% to 0.05 mn cases.

• In Q2, East region has grown by 27% on back of 50% growth in Q2 FY13. East region growth was from whisky segment. West region has grown by 30%.

• The mgmt said that operating margin was down primarily due to higher costs of raw materials – mainly ENA, lower realization from MBDL and rise in ASP due to new launches. Fluctuating ENA prices are largely attributable to the impact of the weak monsoon season in the previous year . The mgmt expects ENA price to come down on back of strong monsoon. ENA was up 10% YoY and 5% QoQ. ENA is now around Rs 44 per litre.

• Glass prices are flat. However there has been rise in packaging cost like 7% rise in cap prices and10% rise in box prices YoY

• QoQ improvement in margin is due to product mix improvement.

• The mgmt said its EBIDTA margin is second highest in Industry. Industry as whole has margin in range of 15% to 24% with ROCE around 11% - 12% range. Higher margin and lower working capital will raise ROCE.

• The realization of MBDL is in range of Rs 500 – 525 per case which has resulted in fall in realization.

• Q2 FY14 witnessed the launch of several brands in various states across multiple categories

• Brandy -White house Brandy in Andhra Pradesh, Mansion House brandy & Courrier Napoleon Brandy Green in Meghalaya

• Rum -Madiraa GOLD Rum and White House Rum in Odisha and West Bengal respectively

• Whisky -Blacpower Whisky in Goa, SHOT whisky in Assam & Bihar, Mansion House Whisky in Bihar and Meghalaya

• Vodka –Classic Vodka in Madhya Pradesh

• The mgmt said that the company is moving towards normalization in Tamil Nadu.

• CSD is also gaining traction. There was 7% price hike in CSD in H1 FY14.

• In India, Rum is fastest growing category in volume term. Rum & Brandy brings 40% - 45% of IMFL industry revenue in India.

• The mgmt said that going forward, it may compromise on volume at lower end brands to maintain its margin,

• The company has recognized Rs 12.37 crore as VAT refund for its sales in FY13 in Maharashtra, for its Mega Project' status. The company will receive the money by end of the calendar year.

• The fall in interest cost despite rise in borrowing is because of 1) rise in long term borrowing because of capex in Shrirampur, interest of which will come in P&L once project is started and 2) rise in short term borrowing, which came at the end of quarter.

• The mgmt said that some strategic investor and PE have shown interest in the company.

• Gross debt at consolidated level is Rs 680 crore.