The Old Monk company that barely makes its own rum

Almost every Indian adult has a story involving a squat, dark bottle with a monk on the label.

Old Monk turned 72 this year. It's been called the world's largest-selling dark rum. It has a cult following that the company has never spent a rupee advertising, because Indian law doesn't let it. And the company behind it, Mohan Meakin Limited, has been around since 1855 — it brewed beer for the British Indian Army before the Indian Railways existed.

So here's a question. If you wanted to buy a piece of this 171-year-old business, where would you go?

Not the NSE. Not the BSE. Mohan Meakin is technically listed — on the Calcutta Stock Exchange, an exchange that hasn't had meaningful trading in years. And the FY26 annual report says it plainly: between 1st April 2025 and 31st March 2026, not a single share quotation was received. The stock didn't trade. Not once. All year.

Meanwhile the company quietly did ₹2,302 crore of revenue and ₹157 crore of profit.

Let's unpack it.

Here's the thing about alcohol in India. It isn't one market. It's thirty-odd markets wearing a trenchcoat.

Alcohol sits on the State List of the Constitution. Every state sets its own excise duty, its own licensing rules, its own label approvals, its own price caps, its own distribution model. And crucially, most states slap punishing import fees on liquor made in other states, to protect their own excise revenue.

Which means the normal FMCG playbook — build one giant efficient plant, ship nationally — simply doesn't work. The annual report says as much: sending goods from one corner of the country to another has become "un-remunerative and economically unviable."

So Mohan Meakin does something else. It owns the brands, and then uses three different mechanisms to get those brands into each state.

One: make it yourself.

The company runs four live plants — Solan Brewery in Himachal (beer plus IMFL bottling), Kasauli Distillery (malt and cane spirit), Bhankarpur in Punjab (bottling), and Mohan Nagar in Ghaziabad (brewery, distillery, and the food business). A fifth, in Lucknow, is shut.

Here, Mohan Meakin pays the excise duty itself and books the full sale.

Two: let someone else make it, then buy it back.

In states where owning a plant doesn't make sense, Mohan Meakin licenses a local bottler to manufacture its brands — and then purchases the finished bottles and sells them onward. The clearest example in the report is Mohan Rocky Spring Water Breweries, which bottles exclusively for Mohan Meakin at Khopoli in Maharashtra, and supplies Maharashtra, Gujarat, and the military canteens (CSD).

In a single year, this went from half the business to two-thirds of it.

Three: don't touch the bottle at all. Just charge rent.

Where the bottler sells directly, Mohan Meakin simply collects a royalty per case. The CSD arrangement with MRSB, for instance, pays ₹20 a case.

Small in absolute terms — and the fastest-growing of the three.

Put the three together and the shift is hard to miss. Own manufacturing fell from 46% of revenue to 30%, while the two asset-light routes — buying back from bottlers and collecting royalty — went from 52.6% to 68.5%.

(One caveat on those percentages: Note 26.1 states that sale of products is inclusive of excise duty, so the manufactured and traded lines carry excise inside them while royalty does not. The shares are directionally right but not strictly like-for-like, and the report doesn't disclose the excise split that would let you make them so.)

And there's a fourth, smaller hook that's easy to miss but tells you everything about how the model holds together. Every bottler is contractually required to buy the proprietary flavouring concentrate from Mohan Meakin itself. That's another ₹21 crore of revenue — but more importantly, it's the reason the recipe never leaves the building. A franchisee can bottle Old Monk. It can't become Old Monk.

So: a 171-year-old brand house that increasingly rents out its manufacturing and keeps the intellectual property.

At first glance, a shrug. Revenue grew 7%.

Revenue up 7%, profit up 53%. That gap is the whole story of the year, and it comes from two places.

The first is excise duty, which distorts the top line.

Indian accounting makes alcohol companies report revenue including excise duty, and then show excise as a separate expense line further down. Note 26.1 of the report says it plainly: sale of products is inclusive of excise duty. The duty inflates revenue and expenses alike and nets out at the profit line — but it wrecks any year-on-year reading of the top line.

Here's what the two disclosed numbers do:

So the business grew a great deal faster than the headline suggests.

Now, why did excise fall 73% in a single year? The report doesn't say. There is no note attached to the excise line, no split by segment or by manufactured-versus-traded, and no management commentary on it — the Board's Report attributes the profit jump only to "operational efficiency, cost optimization, and value creation for stakeholders."

What the report does disclose is the mix shift that happened alongside it. Sale of manufactured goods fell from ₹991 crore to ₹693 crore, while sale of traded goods — bottles Mohan Meakin buys finished from its bottling partners — rose from ₹1,093 crore to ₹1,520 crore.

And the accounting policy notes that state excise becomes determinable at the point goods are cleared from the factory. On a bottle made and cleared by a partner's plant, that duty is the partner's to pay, and it would reach Mohan Meakin embedded in the purchase price rather than as its own excise expense. That is a plausible explanation for the collapse. It is not one the company offers, so treat it as inference, not disclosure.

Which leaves one genuine blind spot worth naming. Because the excise split isn't disclosed, you cannot tell from this report how much of that 30% drop in manufactured-goods revenue is an actual decline in factory output, and how much is simply less excise flowing through the line. The disclosure doesn't let you separate the two.

The second is mix.

Royalty income jumped 48% to ₹58 crore. Concentrate sales rose. Segment margins in the alcoholic business went from 7.3% to 9.8%. And the company recovered working capital — trade receivables dropped from ₹112 crore to ₹82 crore even as sales grew, which is the kind of thing that quietly shows up as a cash pile later.

Which it did. Cash, bank deposits and investments swelled from ₹229 crore to ₹398 crore. Against total borrowings of ₹4.3 crore. The company is effectively debt-free and sitting on a mountain.

One thing that didn't work. The non-alcoholic arm — juices, cornflakes, wheat porridge, vinegar — did ₹15 crore of revenue and lost ₹3.4 crore. It's 0.65% of the business and it's been bleeding. At some point someone has to decide whether it's a heritage keepsake or a line item.

And the profit may not be where the revenue is. The company doesn't disclose a gross margin by product type. But put the two disclosed lines side by side — traded sales of ₹1,520 crore against purchase of stock-in-trade of ₹1,493 crore — and the implied spread is about ₹26 crore, or roughly 1.7%. These are the standard matching lines under Ind AS, but Mohan Meakin never presents them as a margin, and movements in stock-in-trade inventory sit outside the comparison, so read it as an indication rather than a measured figure. What it suggests is that the trading line inflates revenue considerably more than it inflates earnings.

So when you read "₹2,302 crore company," mentally file most of it as volume, not value.

This is where it gets strange.

Since the CSE quote is dead, Mohan Meakin shares change hands in India's unlisted (grey) market — through dealer platforms, over the counter, in lots. Recent quotes have hovered in the ₹2,300–2,600 range, putting market cap somewhere around ₹2,000–2,200 crore.

Run the numbers on FY26:

Strip the cash out and the operating business is being valued at roughly 11 times earnings.

Now compare that to the neighbourhood. Radico Khaitan has traded anywhere from 58x to 89x this year. Allied Blenders around 50x. Jefferies initiated coverage on the sector in June 2026 with Radico as top pick, arguing that premiumisation has a long runway and that premium categories are growing at strong double digits while driving an outsized share of industry profits. The broader alcoholic beverages industry P/E sits somewhere near 48x.

Mohan Meakin, with a 28.6% ROE, no debt, and 53% profit growth, trades at a third of that. Sometimes a quarter.

So why the discount?

A few honest reasons.

Liquidity. You cannot sell this in a click. Unlisted trades settle through dealers, spreads are wide (one platform quoted a ₹2,550 buy against a ₹2,350 sell — that's an 8% round-trip before you've made a rupee), and in a bad market there may be no bid at all. Illiquidity is worth a real discount, not a notional one.

No institutional eyes. No analyst coverage, no quarterly calls, no index inclusion. Promoters hold 68.17%. Price discovery is whatever two dealers agree on.

The earnings mix. A business where two-thirds of revenue is near-zero-margin trading and profits depend on royalty and concentrate arrangements with related parties is harder to underwrite than a clean manufacturer. MRSB, the Maharashtra bottler, is a related party. So is Trade Links, one of the selling agents. None of that is improper — it's all disclosed — but it means a chunk of the P&L runs through counterparties the family also sits on.

Capital that doesn't come back to you. This is the one that stings. On ₹157 crore of profit, the board recommended a dividend of ₹2.50 per share. Total outgo: ₹2.13 crore. That's a payout ratio of about 1.4%. The remaining ₹155 crore joined the ₹398 crore already parked in deposits and investments.

A shareholder looking at a 28.6% ROE has to ask what that return means if the cash never leaves and the share never trades. Value that you cannot access is an accounting fact, not an economic one.

The bull case, to be fair, is that all of this is fixable with a single event: a listing on the NSE or BSE. That would collapse the liquidity discount, bring in institutional buyers, and force the capital-allocation conversation. But the company has given no indication it's coming, and betting on a corporate action that management hasn't announced is a wish, not a thesis.

Mohan Meakin is a genuinely good business hiding behind a confusing income statement. Strip out the excise noise and it grew net revenue 34% and profits 53%, on brands it doesn't advertise, in an industry designed to make national scale impossible.

It's also a business whose economics increasingly rest on not manufacturing — on collecting royalty, selling concentrate, and letting partners carry the excise and the plant. That's an elegant model in a fragmented regulatory market. It's also one where the reported revenue line flatters the actual profit engine considerably.

And it trades, if you can find someone to trade with, at roughly a quarter of what its listed peers command. Some of that gap is the market being lazy. Some of it is a fair price for not being able to leave.

Nothing here is investment advice. Unlisted shares carry liquidity, valuation and settlement risks that listed equities don't, and grey-market prices quoted by dealers are estimates rather than exchange-discovered prices. Do your own work, or talk to someone licensed.

Sources: Mohan Meakin Limited Annual Report FY2025-26 (92nd Annual Report); unlisted share price quotes from dealer platforms; Jefferies sector note via Business Standard, June 2026.