Shri Gang Industries and Allied Products Limited (formerly **Suraj Vanaspati Ltd**) is a diversified Indian manufacturer that has successfully executed a strategic pivot from legacy edible oils to becoming a high-growth, integrated player in the alcoholic beverages sector. Leveraging its strategic location in the grain-rich belt of **Uttar Pradesh**, the company has built a robust value chain encompassing grain distillation, premium contract manufacturing for global majors, and the development of proprietary spirits brands. --- ### **Integrated Liquor Value Chain & Infrastructure** The company operates a sophisticated, backward-integrated manufacturing model at its primary facility in **Sandila, Hardoi (UP)**. This integration allows for margin capture at every stage of the production cycle. * **Distillation Capabilities:** Operates a **66 KLPD** (recently enhanced from **55 KLPD**) grain-based distillery. The unit utilizes advanced **Praj Industries** technology to convert raw grains into **Extra Neutral Alcohol (ENA)** (purity **>96%**) and **Rectified Spirit** (**~95%**). * **Bottling Infrastructure:** A high-capacity **9-line bottling plant** with an annual capacity of **0.4 crore cases** of Indian Made Foreign Liquor (IMFL). * **Raw Material Advantage:** Situated in India’s primary maize and rice belt, the company benefits from proximity to Uttar Pradesh’s annual food grain production of **~57.5 MMT**, ensuring consistent feedstock and lower logistics costs. * **Sustainability & Circularity:** The Sandila facility employs **zero-discharge** principles, utilizes **biomass-based energy**, and incorporates water recycling. By-products from the starch-processing phase are used to generate **Electricity, Steam, and Carbon**. --- ### **Strategic Partnerships & Brand Portfolio** The company’s revenue model is anchored by long-term institutional partnerships and a growing footprint in the proprietary brand segment. #### **1. Global Contract Manufacturing (Diageo/USL)** The company maintains an exclusive, long-term partnership with **United Spirits Limited (USL/Diageo)**. * **Capacity Allocation:** **75%** of total bottling capacity is dedicated to Diageo. * **FY25 Output:** Produced **0.3 crore cases** and supplied **0.98 crore litres** of ENA to Diageo. * **Revenue Contribution:** Contracts with Diageo reached **Rs 208.4 Cr** in **FY25**, representing approximately **64%** of total revenue. * **Brand Portfolio:** Bottles premium and scotch brands including **VAT 69, Black & White, McDowell's No.1, Royal Challenge, Signature, Ciroc, Smirnoff, Gordon's, Bailey's,** and **Speyburn**. #### **2. Domestic Expansion (Tilaknagar Industries & Others)** * **Tilaknagar Industries (TIL):** Entered a lease and manufacturing agreement in **March 2026** to bottle TIL’s IMFL brands. * **Three Brothers LLP:** Contract manufacturing for **55 Degree North** and **Northern Pride** Premium Whiskeys. #### **3. Proprietary Brands (UPML)** The company manufactures and distributes **Uttar Pradesh Made Liquor (UPML)**, targeting the mass and value segments through: * **Golden Cascade** * **Bulldozer / Bulldozer Black Rum** --- ### **Financial Performance & Capital Restructuring** Following the full operationalization of the distillery in **September 2022**, the company has transitioned from a loss-making entity to a profitable enterprise with a strengthened balance sheet. | Metric | FY 2021 | FY 2024 | FY 2025 | YoY Growth (FY24-25) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | ₹32.19 Cr | ₹288.65 Cr | **₹352.62 Cr** | **22.16%** | | **EBITDA** | (₹0.36 Cr) | - | **₹49.01 Cr** | - | | **Profit After Tax (PAT)** | (₹3.52 Cr) | ₹19.51 Cr | **₹34.01 Cr** | **74.31%** | | **Operating Margin** | -1.12% | - | **13.90%** | **+1,502 bps (vs FY21)** | | **Net Worth** | (₹73.06 Cr) | - | **₹10.60 Cr** | **Turnaround** | #### **Debt Management & Equity Infusion** The company has aggressively restructured its capital to eliminate the "Sick Company" legacy (BIFR status from 2001). * **Loan Conversion:** Converted over **Rs. 47 Crore** of unsecured loans into **Compulsorily Convertible Preference Shares (CCPS)** between 2024 and 2025 to boost net worth. * **Credit Rating:** Upgraded by Infomerics in **December 2025** to **IVR BBB/Stable**. * **Fundraising:** Issued **7,50,000 Convertible Warrants** at **Rs. 99** in **November 2025** for fresh capital. * **Incentivization:** Allotted **7,50,000 Sweat Equity Shares** to COO **Mr. Varun Gupta** in recognition of strategic value addition. --- ### **Market Dynamics & Growth Strategy** The company is positioning itself to capitalize on the "Premiumisation" trend in the Indian spirits market, which is projected to reach **USD 112 billion** by **2034**. * **Premiumisation Focus:** While mass segments drive volume, the company is shifting focus toward high-margin **Prestige and Super-Premium** categories, particularly in **Whisky**, which accounts for **~60%** of total sales. * **Geographic Expansion:** Targeting penetration into **Tier II and Tier III cities** and exploring export markets in the **UAE, Singapore, and Africa**. * **Regulatory Tailwinds:** Benefiting from the **India-UK FTA**, which reduced duties on Scotch and Gin from **150% to 75%**, and the UP state industrial rehabilitation schemes (e.g., **Rs 32.14 crore** duty refund in Q3 FY26). * **Diversification:** The company’s charter includes future expansion into **Ethanol** for petrol blending and the manufacture of **Bio-fertilizers**. --- ### **Risk Profile & Mitigation** | Risk Category | Details & Impact | Mitigation / Status | | :--- | :--- | :--- | | **Regulatory** | High state control over excise, pricing, and advertising. | Strong compliance team; focus on government-regulated customers. | | **Legal/Tax** | **₹27.51 Cr** VAT demand and **₹65.45 Lakh** CST demand received in **April 2026** for FY23. | Active legal contest; historical BIFR-sanctioned repayment plans in place. | | **Prohibition** | Risk of state-wide bans (e.g., Bihar/Gujarat model). | Diversified geographic targeting and potential pivot to Ethanol/Biofuels. | | **Compliance** | Historical lack of Fire NOC/Pollution Board permits at the **Sikandrabad** unit. | Sikandrabad unit is currently non-operational for manufacturing; limited to trading. | | **Financial** | Interest rate and liquidity risks. | Borrowings are at **fixed rates**; no **foreign currency exposure**. | ### **Legacy Segment: Edible Oils** The company’s original business in **Sikandrabad** remains in a "Trading Only" status. Manufacturing was suspended in **2010** due to aged machinery. While it contributed a marginal **₹1.76 Cr** to FY25 revenue, the company maintains the infrastructure for potential future redevelopment into high-seas sales or trading of refined oils and vegetable ghee.