India’s alcohol industry is one of the fastest-growing in the world, driven by higher incomes, changing demographics, and a trend toward premium products. Let’s take a closer look at the sector, its growth drivers, challenges, and future opportunities.
Market Overview
The Indian alcoholic beverage market is valued at around $50 billion and is expected to grow at a rate of 6-8 percent annually over the next decade. The market can be divided into the following categories:
- Spirits (Whiskey, Vodka, Rum, Brandy, Gin, etc.) – The largest segment, making up about 60 percent of the market
- Beer – A rapidly growing segment, accounting for around 30 percent of the market
- Wine & Others – Around 10 percent of the market, but growing quickly
India is the world’s largest consumer of whiskey, representing nearly 48 percent of global whiskey consumption.
Emerging Trends in Alcohol Consumption
Health-Conscious Consumers
As health awareness increases, consumers are increasingly seeking alcohol options that align with their healthier lifestyles. This has led to a rise in demand for low-calorie, organic, and gluten-free alcoholic beverages. Brands are responding by offering drinks that are not only better for health but also cater to specific dietary preferences.
Rise of Ready-to-Drink (RTD) Cocktails
Ready-to-drink cocktails are becoming increasingly popular, especially among younger consumers. These pre-mixed, convenient drinks are perfect for people who want a quick and easy cocktail experience without the hassle of mixing ingredients
Growth of Home Drinking
The trend of enjoying alcohol at home has surged, especially after COVID-19. With the rise of online ordering and home delivery services, consumers now prefer to relax with their favorite drinks at home. Additionally, the growing popularity of at-home cocktail culture has made it easier for people to experiment with and enjoy a wide variety of drinks in the comfort of their homes.
Global Interest in Indian Whiskey & Gin
Indian alcoholic brands, particularly whiskey and gin, are gaining significant attention on the global stage. As global interest in premium and unique spirits grows, Indian brands are successfully making their mark internationally, offering a blend of traditional craftsmanship and modern innovation to attract international consumers.
Here is the list of stocks to keep on your radar
Associated Alcohols & Breweries Ltd
Associated Alcohols & Breweries Ltd is a leading manufacturer of alcoholic beverages in India, with a wide range of products including whiskey, rum, and brandy. The company is known for its strong presence in both the domestic and international markets.
With a market capitalization of Rs. 2,497 crores, the stock has experienced a 3-year sales growth of 20 percent. The stock’s ROE stands at 12.8 percent, and its ROCE is 15.43, along with a debt-to-equity ratio of 0.2.
Som Distilleries & Breweries Ltd
Som Distilleries & Breweries Ltd is a prominent player in India’s alcoholic beverage industry, primarily involved in the production of beer and spirits. The company has a strong foothold in the beer segment with its flagship brand, “Somersby.”
With a market capitalization of Rs. 2,373.77 crores, the stock has experienced a 3-year sales growth of 65 percent. The stock’s ROE stands at 15.78 percent, and its ROCE is 20.16, along with a debt-to-equity ratio of 0.21.
Radico Khaitan Ltd
Radico Khaitan Ltd is one of India’s largest spirits companies, producing a variety of alcoholic beverages, including premium and popular whiskey brands. It has a significant market share in the domestic liquor industry and is known for its high-quality products and innovative offerings.
With a market capitalization of Rs. 29,330 crores, the stock has experienced a 3-year sales growth of 20 percent. The stock’s ROE stands at 11.12 percent, and its ROCE is 13.14, along with a debt-to-equity ratio of 0.35.
Globus Spirits Ltd
Globus Spirits Ltd is an Indian company engaged in the production of alcoholic beverages, primarily focusing on IMFL (Indian Made Foreign Liquor), including whiskey, rum, and brandy, and the company operates in both domestic and international markets.
With a market capitalization of Rs. 2,825.65 crores, the stock has experienced a 3-year sales growth of 25 percent. The stock’s ROE stands at 6.31 percent, and its ROCE is 5.41 along with a debt-to-equity ratio of 0.42.
Aurangabad Distillery Ltd
Aurangabad Distillery Ltd is involved in the manufacturing of a wide range of alcoholic beverages, including spirits and liquors. The company has a focus on regional brands and serves both the domestic and export markets with a variety of offerings.
With a market capitalization of Rs. 185.01 crores, the stock has experienced a 3-year sales growth of 24 percent. The stock’s ROE stands at 18.99 percent, and its ROCE is 17.45, along with a debt-to-equity ratio of 0.75.
Written by Sridhar J
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
