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for Industry - Breweries & Distilleries
About the stock: Allied Blenders & Distillers (ABDL), incorporated in 1988, is third largest IMFL company in terms of sales volumes between FY14-22. It has 18 IMFL brands in the portfolio; 4 out of it are Millionaire brands. Premiumisation is core of the long-term growth strategy. Prestige & Above (P&A) brands contribution increased to 40.4% in FY25 vs. 25% in FY18. Q2FY26 performance: ABDL's Consolidated net revenues 14.1% YoY growth to Rs.990.1cr driven by strong 28% volume growth in P&A segment (contributes 47% to overall volumes). Gross margins reported 158bps YoY improvement to 44.4% due...
About the stock: Radico Khaitan (RKL) is one of the recognised IMFL company in India with portfolio of 8 millionaire brands. It has one of the largest liquor manufacturers in India with a capacity of 321mn litres p.a. Prestige & Above...
About the stock: Radico Khaitan (RKL) is one of the recognised IMFL company in India with portfolio of 8 millionaire brands. It has one of the largest liquor manufacturers in India with a capacity of 321mn litres p.a. Prestige & Above (P&A) contribution has gone up to 67% in Q1FY26 due to strong traction to products. Q2FY26 performance: RKL reported strong set of results in Q2FY26 with net revenues growing by 34% YoY to Rs.1493.9cr. Strong revenue growth was driven by 37% YoY volume growth (P&A segment volumes grew by 22%). Despite stable raw material environment, gross margins stood flat at 43.6% as portfolio mix tilted...
ABDL has set ambitious FY28 targets of mid-teens revenue growth with double-digit volume growth, P&A share at 50%, gross margin of 45%+ and EBITDA margin of ~17%; and improve ROCE to 23–25%.
Enhanced the EBIDTA margin guidance to ~17% from earlier 15%+ for FY28E; Premium Mix, backward integration and UK FTA benefits will drive margins: ABDL is targeting mid-teens revenue growth driven by double digit volume growth in prestige & above (P&A) category. It aims the P&A segment mix to improve to 50% by FY28 from 46% in Q1FY26. It has invested ~Rs.450cr on capex to set up backward integration facilities. The PET Bottle manufacturing is expected to cater to 70-75% of current annual requirement while Single malt distilleries and ENA shall help to become self-sufficient, improving its supply chain and reducing its...
RKL’s Q1 numbers were robust, beating estimates on all fronts. Consolidated net revenue grew by 32.5% y-o-y to Rs. 1,506 crore, higher than our and average street expectation of Rs. 1,346 crore and Rs. 1,355 crore, respectively, aided by y-o-y IMFL volume growth of 37.5%.
ABD reported strong volume-led performance with driven by 44% growth in P&A segment, increasing its volume/ value saliency to 46%/ 56% from 37%/ 46% last year.
Market share gains, the lower base (owing to elections) and sustained premiumisation drove an 11% rise in United Breweries’ volumes in Q1 (above the Street’s 5-7% estimate).
Radico Khaitan Ltd (RKL) continues to focus on premiumisation and expects double-digit volume growth momentum in the Prestige & Above (P&A) category to continue.
We met Dilip Banthiya, CFO and Saket Somani, SVP - Finance & Strategy. Takeaways, Confident of reporting strong double-digit volume growth in P&A brands driven by expanding product offerings and widening distribution network.
Radico Khaitan is one of the oldest and largest manufacturers of Indian Made Foreign Liquor (IMFL) with net revenue of INR48b and volume of 31m cases in FY25 (P&A was ~15mn cases).
RKL’s Q4FY25 numbers were good, with net revenue growing by 20.9% y-o-y to Rs. 1,304 crore and OPM rising by 225 bps y-o-y to 13.6%, which led to adjusted PAT growth of 59.5% y-o-y to Rs. 91 crore.
Telangana (15% of UB’s revenue) announced a 15% price hike for beer, marking the first hike since FY20. This and strong seasonal demand (on a lower base), cost-saving steps and consistent capability building efforts augur well for the future.
RKL’s Q3FY25 performance was good with revenue growth of 11.5% y-o-y to Rs. 1,294 crore and OPM rising by 191 bps y-o-y to 14.2%, which led to PAT growth of 27% y-o-y to Rs. 96 crore.
We re-iterate a Buy on Radico Khaitan (RKL) with a revised PT of Rs. 2,996. Stock trades at 64x/51x its FY26E/FY27E earnings, respectively. P&A category to post over 15% volume growth in FY2025 driven by focus on premiumisation, while regular category is expected to deliver mid-single-digit volume growth.
Allied Blenders and Distillers (ABD) is well positioned to capture premiumisation trend in alco-beverages industry via new product launches in P&A segment (ICONiQ White Whisky to double its volume YoY in FY25; launches in premium and luxury segments to drive realisation growth).
