Alcohol consumption in India is rising steadily, supported by urbanisation, changing lifestyles, and a growing shift toward premium products. The industry, which had seen some volatility in recent years due to taxation changes and regulatory hurdles, is now benefiting from stable pricing, improved recovery, and an uptick in discretionary spending. Volumes are picking up, while premium spirits continue gaining traction among younger consumers.
For listed companies, this revival in demand comes at a time when input cost pressures are easing and operating leverage is beginning to play out. Can this consumption trend sustain, and are these alcohol stocks positioned to benefit? Let’s take a look..
#1 Radico Khaitan
Radico Khaitan is one of the leading players in the Indian liquor industry with seven million-dollar brands in its product portfolio.
The company has an 8% market share in India, with a much higher share in the premium segment. It has a 50% share in the luxury gin market, a 59% share in the overall vodka market, and a 64% share in the super premium brandy market.
In addition, the company is the largest player in the defence market, with a dominant market share of 20-25%. This segment has entry barriers, which help it enjoy a dominant position.
Currently, Radico has seven millionaire brands, including 8PM Whisky, Contessa Rum, Old Admiral Brandy, Magic Moments Vodka, 8PM Premium Black Whisky, Morpheus Premium Brandy, and 1965 Spirit of Victory Premium Rum.
Radico Khaitan operates in two categories—Prestige & Above (P&A) and Regular & Others. The Prestige & Above segment includes premium brands like 8PM Premium Black, Magic Moments Verve, and Rampur, offering higher margins. The Regular & Others segment covers mass-market products that drive volumes but at lower margins.
The contribution of the Prestige and above category to the total portfolio has grown from 25.9% of volumes in FY18 to 46.1% in FY25, driven by premiumisation. It now accounts for 69.4% of total revenues, compared to 60% last year. Indian-made foreign liquor (IMFL) revenues account for 69.5%, while the rest comes from non-IMFL.
In terms of its financials, income from operations increased 17.7% from last year to ₹48.6 billion in FY25. Volume growth of 14.3%, led by prestige (15.5%) and regular (13.3%), and pricing growth of 4.6% contributed to the growth.
Radico’s earnings before interest, tax, depreciation, and amortization (EBITDA) margin also improved 1.5 percentage points to 13.8%. This translated to a strong 35% growth in net profit to ₹3.4 billion.
Looking ahead, the company aims to post double-digit growth of above 15% in FY26 in the precise category and 12-13% in the regular segment. It has guided for another 100 basis point margin improvement (from 13.8%), with additional upside possible if duty reductions under FTA materialise.
The company’s debt reduced by ₹1.1 billion to ₹5.7 billion during FY25. It expects to reduce it by 35-40% in FY26 and become almost debt-free by FY27. To ride the wave of premiumisation, it is also launching two luxury brands in Q1FY26. In addition, it is entering the super-premium whisky segment before the end of H1FY26.
The company is also expected to benefit from the UK-India free trade agreement, under which duties will be reduced from 150% to 75%. It has estimated a price reduction of 6-8%, which would lead to significant cost savings.
From a valuation perspective, Radico Khaitan trades at a price-to-earnings (PE) multiple of 101x, over 3 times higher than the 10-year median of 32x. Relatively, the valuation remains high with United Spirits trading at 77x.
Radio Khaitan Share Price
#2 United Spirits
United Spirits is one of the leading beverage alcohol companies in India, and a subsidiary of global leader Diageo PLC. It manufactures, sells, and distributes a diverse and exquisite collection of iconic global and premium Indian brands.
Its diverse brand portfolio comprises over 63 brands of Scotch whisky, IMFL whisky, brandy, rum, vodka, and gin at various price points. Nine of these brands sell more than one million cases annually, with one selling over 25 million. Total annual sales are around 61 million cases.
The company owns key brands such as McDowell’s No. 1, Royal Challenge, Signature, Black Dog, Director’s Special Black, McDowell’s Rum, and McDowell’s Brandy.
It also imports iconic Diageo brands, such as Captain Morgan, Johnnie Walker, Baileys, Vat 69, Black & White, Smirnoff, and Ciroc.
In terms of financials, standalone net sales grew 7.5% from last year to ₹86.3 billion in 9MFY25, driven by 3% volume growth. The company continues to benefit from premiumisation, with prestige segment revenue growing 8.8%.
The prestige category now accounts for 88.7% of sales, up from 87% in FY24. On the other hand, revenue from the lower-end popular segment remained flat, with a growth of just 0.6%. However, the EBITDA margin improved 120 basis points to 18%, leading to a 20% jump in net profit to ₹11.1 billion.
Looking ahead, the company anticipates a stable demand situation, with the prestige category showing a positive trend. The company aims to achieve double-digit growth in this segment in FY25.
The company has also expanded its portfolio with the new non-whisky offering X Series under the McDowell’s brand. The brand has been launched in five key markets: Maharashtra, Goa, Uttar Pradesh, Rajasthan, and Madhya Pradesh.
The management also hopes to benefit from the UK-India FTA, which will reduce duties on whisky from 150% to 75% and then to 40% over 10 years. This will allow it to import Diageo brands at a much lower cost, which will help it drive volume growth.
Notably, the company can now bet bigger on imported Scotch brands (e.g., Black Dog, Vat 69), especially since Scotch currently accounts for a small share of the overall whisky market.
From a valuation perspective, United Spirits trades at a PE multiple of 77x, in line with the 10-year median of 75x. Relatively, the valuation remains at a discount to Radico Khaitan PE of 101x.
United Spirits Share Price
#3 Tilaknagar Industries
Tilaknagar Industries is India’s leading brandy manufacturer, with a concentrated geographical presence in southern India. Its brands, such as Mansion House and Courrier Napoleon Brandy, are among the fastest-growing brands in the world.
Its products enjoy strong demand across South India, with strong consumption in states like Karnataka, Andhra Pradesh (AP), Telangana, Puducherry, Kerala, and Tamil Nadu. The region contributes 86% of volumes, and 94% of the volume comes from Brandy.
The company’s revenue remained stable at ₹10.3 billion in 9MFY25, mainly due to subdued value growth of 4% due to a price reduction in AP. However, the EBITDA (adjusted for subsidies) margin expanded by 260 basis points to 16.9% due to a 15% decline in other expenses. This resulted in a 60% increase in net profit to ₹1.5 billion.
Tilaknagar has also reduced debt, bringing its gross debt to just ₹0.45 billion from ₹11.2 billion in FY19. In FY25, the company reduced its debt by ₹74 crore, reducing finance costs by 55%. This, too, contributed to profit growth.
Looking ahead, the company continues to see strong demand across alcohol beverage categories, supported by higher consumption and premiumisation. The company has also ventured into premiumisation by launching the Monarch Legacy Edition. Overall, volumes are expected to grow in mid-single digits annually over the next 5 years.
The company also plans to invest Rs 0.35-0.50 billion in capacity enhancement in Andhra Pradesh, increasing capacity from 6 lakh cases to 36 lakh cases. As of Q3FY25, its market share in AP stood at 11.5%, reflecting a strong position driven by robust volume growth.
The company expects margins to improve as cost pressures on raw materials and packaging ease. Like Radico and United Spirits, its premium brands also see good demand.
From a valuation perspective, Tilaknagar Industries trades at a PE of 31x, at a discount to a 10-year median of 39x.
Tilaknagar Industries Share Price
Conclusion
India’s alcohol industry is witnessing rising demand, supported by urban consumption, premiumisation, and easing cost pressures. Companies like Radico Khaitan and United Spirits are well-placed to benefit from this trend, with strong brand portfolios and expanding premium segments.
While, Tilaknagar, though smaller in scale, is also seeing improved margins and debt reduction. At the same time, Radico and United Spirits valuations remain elevated, unlike Tilaknagar. However, note that Tilaknagar is geographically concentrated and has slower growth rates. Nonetheless, the outlook for the overall sector remains positive.
Disclaimer
Note: Throughout this article, we have relied on data from and the company’s investor presentation. Only in cases where the data was unavailable have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
About the Author: Madhvendra has been deeply immersed in the equity markets for over seven years, combining his passion for investing with his expertise in financial writing. With a knack for simplifying complex concepts, he enjoys sharing his honest perspectives on startups, listed Indian companies, and macroeconomic trends.
A dedicated reader and storyteller, Madhvendra thrives on uncovering insights that inspire his audience to deepen their understanding of the financial world.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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