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Liquor companies deliver strong growth by focusing on its premiumisation strategy

ICICIdirect Research 01 Aug 2025 DISCLAIMER

Industry Highlights
Prestige & Above (P&A) gaining strong acceptance in the domestic market.
P&A mix to consistently improve; P&A volumes are growing in strong double digit.
Better mix and stable input prices aided gross margins and EBIDTA margins improvement
The companies have maintained its stance on consistently adding new products in P&A segment.
 
Allied Blenders and Distillers
ABDL’s consolidated revenues grew by 22% YoY to Rs.923cr driven by 17% YoY growth in volumes and 6% YoY growth in realisation.
P&A segment volumes grew by 47% YoY to 3.9mn cases. P&A mix improved to 46% in Q1FY26 vs 36% in Q1FY25.
Gross Profit margins stood at 43.2% witnessing 448bps YoY growth driven by lower ENA cost and better mix. EBITDA margins stood at 12.1% recording 231bps YoY due to better portfolio mix and strong revenues.
PAT witnessed 5x YoY growth to Rs.55.8cr led by lower finance cost on the back of debt repayment and better EBITDA.
Outlook: Growing Salience of P&A segment in the portfolio helps in driving the margin expansion. The recently concluded UK FTA will also lead lower raw material cost while the company’s expansion plans of backward integration will aid the margins ahead. Focus on premiumisation is aiding ABDL to be on strong growth footing in the near to medium term. We recommend Buy growth in the near to medium term Rs585.
 
Radico Khaitan
Radico Khaitan’s consolidated revenues recorded 33% YoY growth to Rs.1506cr. Volumes grew by 38% YoY to 9.72mn cases.
P&A segment volumes grew by 41% YoY to 3.84mn cases. P&A mix stood at 41.5% in Q1FY26 vs 43.4% in Q1FY25.
Gross Profit Margins stood at 43% improving by 200bps led by lower ENA cost and favourable premium mix. EBITDA margins stood at 15.4% recording 230bps YoY growth led by favourable mix and stronger revenues.
Higher other income and slight decline in interest cost led to 75% YoY growth in PAT to Rs133.3crore

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