<p>Bengaluru: Delayed payments and deferment of price hikes by Telangana corporations are likely to impact the profitability and liquidity of liquor suppliers to the market, as per an analysis by India Ratings and Research (Ind-Ra) out on Friday. Overdue delays are for at least seven months.</p><p>The impact on entities manufacturing Indian-made foreign liquor (IMFL) is expected to be less than that on beer players.</p><p>“Indian alcoholic beverage players operating through part or full corporation market channels will continue to be exposed to the risk of lack of timely price hikes or delayed collections by state beverage corporations. The risks are higher for entities concentrated towards a particular state corporation than that for geographically diversified players,” says Nikhil Joshi, Senior Analyst, Corporate Ratings, Ind-Ra.</p>.Telangana CM Revanth Reddy directs officials to develop Hyderabad's 'core urban area' with global standards.<p>IMFL players have sufficient liquidity and adequate capital structure to absorb any short-term disruptions in the industry, according to Ind-Ra.</p><p>Players with significant concentration in the state and weaker balance sheets will remain at a high risk of liquidity mismatches and potential stress.</p><p>There has also been an increase in receivables to Rs 4,000 crore in the past 12 months which, given the higher component of duties, also brings the added cost of penalties from the excise authorities, further impacting liquidity.</p><p>Resolution of these issues would remain a key monitorable for assessing the credit profile of alcohol beverage players, according to Ind-Ra.</p>.<p>Despite the ongoing issues, Telangana remains crucial for the liquor industry, considering the high consumption volume and per-capita consumption expenditure, as per the analysis. This is especially as the Indian alcohol beverage market is dominated by IMFL consumption which contributes around 70% to the total consumption in the sector, followed by beer.</p><p>In terms of the regional consumption pattern, the IMFL market is dominated by southern states with five states contributing nearly half of the overall volume of the market. Telangana comes in the top three in terms of consumption.</p>
<p>Bengaluru: Delayed payments and deferment of price hikes by Telangana corporations are likely to impact the profitability and liquidity of liquor suppliers to the market, as per an analysis by India Ratings and Research (Ind-Ra) out on Friday. Overdue delays are for at least seven months.</p><p>The impact on entities manufacturing Indian-made foreign liquor (IMFL) is expected to be less than that on beer players.</p><p>“Indian alcoholic beverage players operating through part or full corporation market channels will continue to be exposed to the risk of lack of timely price hikes or delayed collections by state beverage corporations. The risks are higher for entities concentrated towards a particular state corporation than that for geographically diversified players,” says Nikhil Joshi, Senior Analyst, Corporate Ratings, Ind-Ra.</p>.Telangana CM Revanth Reddy directs officials to develop Hyderabad's 'core urban area' with global standards.<p>IMFL players have sufficient liquidity and adequate capital structure to absorb any short-term disruptions in the industry, according to Ind-Ra.</p><p>Players with significant concentration in the state and weaker balance sheets will remain at a high risk of liquidity mismatches and potential stress.</p><p>There has also been an increase in receivables to Rs 4,000 crore in the past 12 months which, given the higher component of duties, also brings the added cost of penalties from the excise authorities, further impacting liquidity.</p><p>Resolution of these issues would remain a key monitorable for assessing the credit profile of alcohol beverage players, according to Ind-Ra.</p>.<p>Despite the ongoing issues, Telangana remains crucial for the liquor industry, considering the high consumption volume and per-capita consumption expenditure, as per the analysis. This is especially as the Indian alcohol beverage market is dominated by IMFL consumption which contributes around 70% to the total consumption in the sector, followed by beer.</p><p>In terms of the regional consumption pattern, the IMFL market is dominated by southern states with five states contributing nearly half of the overall volume of the market. Telangana comes in the top three in terms of consumption.</p>
