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
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 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
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
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
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
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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.
