The Indian alcohol industry has experienced a remarkable transformation in recent years, driven by a growing domestic demand and the rise of homegrown brands. As disposable incomes rise and cultural shifts encourage greater acceptance of alcohol consumption, the sector has boomed, particularly in the premium and craft spirits markets. Indian whisky, in particular, has gained international recognition, with brands like Amrut and Paul John earning global accolades for their quality and innovation.
Major players such as United Spirits (a part of Diageo) and Radico Khaitan have expanded their portfolios, while newer entrants like Sula Vineyards and Bacchus are carving out niche markets. This surge in domestic production is reshaping the landscape, positioning India as a significant player in the global alcohol industry.
Recent Updates
Antique’s price target suggests a potential upside of 32% for Allied Blenders and Distillers Ltd, based on Wednesday’s closing price the company is poised for a turnaround, according to Antique.
This turnaround will be driven by three key factors:
1. New Premium Launches: Allied plans to enhance its Prestige & Above (P&A) portfolio, leveraging its strong distribution network to scale brands like SR B7 and ICONiQ White, which have already become million-dollar brands in just 1-2 years.
2. Profitable Growth in Popular Segment: The company aims to target high-margin states, capitalizing on the decline in focus by larger competitors in this segment.
3. Cost Rationalisation and Premiumisation: Efforts to streamline packaging costs and improve profitability through a more premium-focused product range are expected to yield significant benefits.
Capital Expenditure
Long-term margin growth should also be facilitated by the company’s ₹525 crore capital expenditure plans for backward integration and supply chain strengthening (PET bottles). Antique expects a significant improvement in the company’s performance with a focus on driving premiumization by expanding the P&A brand portfolio and driving profitable growth in the popular segment.
Future Projections
The company is anticipated to achieve revenue and EBITDA CAGRs of 9% and 29%, respectively, from FY24–27 as a result of this and enhanced execution and efficiencies at Allied Blenders and Distillers. The P&A segment’s 15% value growth and 13% volume growth will be the main drivers of this.
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Price Target
Currently, Allied Blenders is trading at a 40%-60% discount to peers. With an improvement in its performance, the brokerage expects the valuation gap to narrow down to 20%-40%. Antique initiated coverage on the stock with a ‘Buy’ recommendation and a price target of ₹405.
Share Price
Shares of Allied Blenders and Distillers Ltd. surged as much as 4% on Thursday, November 14, up to Rs. 319 and eventually settled at Rs. 315.65 at the end of the day after brokerage firm Antique initiated coverage on the stock with a ‘Buy’ recommendation and a price target of ₹405. The stock has risen over 13% from its IPO price of ₹281.
About the Company
Incorporated in 2008, Allied Blenders and Distillers is an Indian-made foreign liquor company offering four categories: whisky, brandy, rum, and vodka. Leading Liquor Manufacturer Allied Blenders and Distillers is the third-largest Indian-made foreign liquor (IMFL) company by annual sales volumes with 11.8% market share in the Indian whisky market in FY23-24.
Conclusion
Allied Blenders and Distillers show strong growth potential in India’s evolving alcohol industry, with Antique projecting a 32% upside. The company’s strategic focus on premium launches, profitable growth in popular segments, and cost rationalization positions it well for expansion. With planned capital expenditure of ₹525 crore and projected revenue and EBITDA growth from FY24-27, the company is an attractive investment opportunity, supporting Antique’s ‘Buy’ rating and ₹405 price target.
Written By: Dipangshu Kundu
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