Best Liquor Stocks in September 2024 Based on 5Y CAGR

India is one of the fastest-growing and most diverse alcoholic beverage markets globally. The sector demonstrates significant growth potential, driven by favourable demographics and increasing social acceptance. In recent years, the alcoholic beverages industry in India has experienced remarkable expansion. The market size for alcohol in India is projected to reach USD 55.84 billion by 2024. Sales are expected to grow at a compound annual growth rate (CAGR) of 7.2%, reaching USD 112.34 billion by 2034.

The demand for spirits such as vodka, whisky, and rum remains exceptionally high. According to recent industry analysis, the spirits segment is forecasted to reach an impressive USD 50.55 billion by 2034.

This growth is fueled by several factors, including rapid urbanisation, evolving consumer preferences, a youthful demographic, a burgeoning middle class with increased purchasing power, and a rising inclination towards premium alcoholic beverages. In this article, we will look at the best liquor stocks in September 2024 based on 5Y CAGR.

Best Liquor Stocks in September 2024 – Based on 5Y CAGR

Note: The stocks have been selected from the Alcoholic Beverages sector with a market capitalisation of a minimum ₹5,000 Crore and sorted based on 5Y CAGR as of September 04, 2024.

Overview of 5 Best Liquor Stocks

1. Tilaknagar Industries Ltd: Tilaknagar Industries Ltd. is primarily involved in the manufacturing and selling of Indian Made Foreign Liquor (IMFL). It makes India’s highest-selling premium brandy, Mansion House Brandy. During Q1 FY25, the company achieved the highest-ever EBITDA of ₹50.2 crore, reflecting a YoY growth of 30.8%. It witnessed a gross debt reduction of ₹22.3 crore in the quarter, with net debt at ₹42.6 crore.

Key Metrics:

• ROE: 25%
• ROCE: 22.3%

2. Radico Khaitan Ltd: Incorporated in the year 1943, Radico Khaitan is one of the most recognised IMFL (Indian Made Foreign Liquor) brands in India. The company was initially known as Rampur Distillery Company and focused on distillation and bottling for the armed forces’ branded players and canteen stores. During Q1 FY25, the company achieved strong premium volume growth despite a challenging operating environment. With its distinguished portfolio of luxury and premium brands, coupled with its execution expertise and expansive distribution network, Radico Khaitan is well-positioned to seize forthcoming industry opportunities.

Key Metrics:

• ROE: 11.3%
• ROCE: 13.2%

3. United Spirits Ltd: United Spirits Ltd is the country’s leading beverage alcohol company and a subsidiary of global leader Diageo PLC. The company manufactures, sells, and distributes a wide portfolio of premium brands such as Johnnie Walker, Black Dog, Black & White, VAT 69, Antiquity, Signature, Royal Challenge, McDowell’s No.1, Smirnoff and Captain Morgan. During Q1 FY25, the company delivered on its margin aspirations by successfully countering inflation through efficiencies across the value chain and revenue growth management initiatives.

Key Metrics:

• ROE: 21%
• ROCE: 27.9%

4. United Breweries Limited (UBL): United Breweries Limited (UBL) manufactures and sells beer and non-alcoholic beverages. It markets its products under the flagship brands Kingfisher and Heineken. Some of the most popular brands in its portfolio include Kingfisher Premium, Kingfisher Ultra, etc. Looking forward, the company continues to focus on revenue management & cost initiatives to drive margin accretion with plans to further step up investment behind its brands and capabilities.

Key Metrics:

• ROE: 10.1%
• ROCE: 13.5%

5. Allied Blenders and Distillers Ltd: Incorporated in 2008, Allied Blenders and Distillers is an Indian-made foreign liquor company offering four categories: whisky, brandy, rum, and vodka. During Q1 FY25, the company recorded strong EBITDA growth of 44.0% to ₹ 76 Cr vs ₹ 53 Cr in Q1FY24, driven by significant improvement in gross margins from 34.5% in Q1FY24 to 38.7% in Q1FY25.

Key Metrics:

• ROE: 0.62%
• ROCE: 15.6%

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.