Why Is JM Financial Bullish On India’s Alcoholic Beverages Sector?

India’s alcoholic beverages industry has evolved into one of the most attractive consumer segments, driven by rising incomes, urbanization, and premiumization trends. Companies such as Radico Khaitan, United Spirits, and United Breweries dominate the market with strong brands and distribution reach. Despite periodic regulatory challenges, long-term demand drivers remain intact, and analysts see a structural growth story playing out. JM Financial has highlighted its optimism on the sector, calling recent corrections an opportunity to accumulate quality names.

JM Financial’s Sector View

JM Financial sees India’s alcoholic beverages industry as a large and compelling growth opportunity, projecting sector sales to grow at 12% CAGR between FY25 and FY28.

The brokerage expects EBITDA and PAT CAGR of 17% and 20% respectively across its coverage universe. It notes that regulatory issues, while creating temporary volatility, have historically offered attractive entry points for long-term investors.

Stock-Specific Calls

Radico Khaitan: Buy, TP ₹3,515 United Spirits: Add, TP ₹1,475 United Breweries: Add, TP ₹1,990

Radico Khaitan stands out as the preferred pick with strong execution and premium brand portfolio. United Spirits and United Breweries, despite near-term challenges, are seen benefiting from premiumization and market consolidation over time.

Structural Growth Drivers

Key long-term drivers include favorable demographics, increasing urban lifestyles, premiumization of portfolios, and expanding retail penetration across India.

With rising disposable incomes and evolving consumer preferences, demand for premium spirits, craft beer, and branded alcoholic beverages is expected to rise steadily. Regulatory challenges remain a reality but do not alter the fundamental growth trajectory of the sector.

Radico Khaitan: Preferred Pick

JM Financial highlights Radico Khaitan as its top choice, given its strong premium portfolio and brand momentum.

The company’s recent launches in the luxury spirits category have been well-received, enhancing margins and long-term growth visibility. Its ability to scale premium brands while maintaining distribution efficiency sets it apart.

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United Spirits And United Breweries Outlook

United Spirits is seen benefiting from Diageo’s premiumization push, while United Breweries is positioned to capture long-term beer consumption growth in India.

Both companies face near-term regulatory and demand fluctuations, but their strong brand franchises and leadership positions ensure resilience. With industry demand expected to rebound, both remain strategic “add” candidates for investors.

Investor Takeaway

JM Financial reiterates its bullish stance on India’s alcoholic beverages industry, citing strong demand drivers and premiumization trends. With Radico Khaitan as its top pick and positive outlook on United Spirits and United Breweries, the sector offers a compelling investment opportunity for long-term investors.

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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.

tags: JM Financial, Alcoholic Beverages, Radico Khaitan, United Spirits, United Breweries, Consumer Sector, Indian Stock Market