Cheers on premiumization! These 4 alcohol stocks can meet up to 18%. Do you have one?

The India’s Spirits Market is on the rise as one of the most attractive consumer sectors, with premiumization trends that stimulate stronger growth and profitability compared to traditional FMCG categories, according to international broker Jefferies.

Despite modest growth from middle to high at the general industrial level, the prestige and above (P&A) segment-the sweet spot for most listed companies are expanding at a pace with double digits, led by Scotch and White Spirits that clocks 15-20% CAGR. Analysts note that this premiumization -push not only stimulates the top line momentum, but also creates space for margin extension while the operational environment stabilizes.

Jefferies emphasizes that Indian players have built meaningful positions in fast -growing categories such as vodka and Indian single malts, while also strengthening their premium portfolios through new launches. Multinationals also double premiumization, abandoned lower price points and accelerate innovation over vodka, gin, rum, tequila and brandy.

Regulating reforms in various states, including lower taxes for premium products and privatization of the retail trade, have further strengthened the sector, although recent tax increases in Maharashtra were a setback.

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Here’s Why Four Major Names-United Spirits, Radico Khaitan, United Breweries, and Allied Blenders-Could Rally Up to 18%, According to Two Brokerage firms.United Spirits-Seen as a Key Proxy For India’s Alco-Bev Story, The Company and Company, And Company, And Company, And Company, And Company and Company, And Company, And Company, And Company, And Company, And Company, And Companyization. Luxury Whiskey Segment, Compared with 17% in Overall IMFL and About 30% for Rival Pernod. United Spirits also gains ground in categories for the middle and the upper prestige, although it still follows Pernod here. Jefferies expects FY26 -Staartwinds of service reductions on Bulk Scotch and Bio brands under the British FTA. In addition to his strong portfolio, United Spirits benefits from access to the worldwide brands of Diodeo, which further strengthen its position. However, the challenges still continue to exist. Maharashtra, who is good for a share from middle to high teenagers, could see the income that is influenced by the recent tax increase from the second quarter. Margins can also be put under pressure, especially in the segments of the Middle Prestige, because the company absorbs part of the tax increase. Jefferies has set a price target of RS 1.570, which implies an advantage of 18% compared to the current levels.

Radico Khaitan: Turnover growth remains strong, supported by a steady market share profits in both the general IMFL segment and the Prestige & Boven (P&A) category, helped by a favorable regulation environment in important states such as Uttar Pradesh and Andhra Pradesh, which together contribute about 40% of the volumes. The flagship brand magical moments, good for about half of the P&A sale, benefits from the rising demand for white spirits, which means that high teenagen produces growth. JM Financial notes that the growth absorbs in the whiskey segment, where Radico is relatively under -represented, with a recovery in 20:00 Premium Black, increasing traction for the dark and expansion of its luxury portfolio. JM Financial has initiated the cover with a purchase call and a price target of RS 3,515, which means 15% an advantage compared to the last closure of RS 3,060.

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United Breweries: The beer category has a significant headroom for growth, with a volume growth of 6-8% and low double figure growth that is feasible in a stable regulatory environment, said analysts of JM Financial. While competition is increasing, UBL remains the largest player, with a portfolio supported by a strong brand reminder. The persistent dominance, with a market share of 50% for decades, underlines its lead.

The margin pressure is relaxed due to stable input costs, better use of old bottles and optimization of supply chain. Extension in the short term can be gradual due to external challenges in Karnataka and Telangana, investments in new bottles for the premium portfolio (currently lower EBITDA per case) and capacity improvements. JM Financial has set a price target of RS 1,990, which implies an advantage of 11% of the current levels.

Allied blenders: The “Dark Horse” mentioned by Jefferies, Allied blenders remained behind colleagues with flat volumes about FY19-25 and a 6% EBITDA CAGR, largely due to dependence on the choice of the officer, a low growth-premium brand. A strategic shift – including the IPO, reduced promoter salaries and accelerated growth – investments led by Iconiq White Whiskey – has improved performance.

P&A Volumes are now growing in strong double digits, powered by Iconiq Whiskey, while sales have risen by more than 20% in the last two quarters and the EBITDA margin has improved to more than 12% of 7% in FY24. Jefferies has assigned a target of RS 620, which implies 12.3% above the last closure of RS 552.

JM Financial emphasizes that a highly regulated industrial structure and complex supply chain create strong access barriers, giving existing established operators a competitive advantage. In contrast to staples or discretionary sectors, newcomers are confronted with limited threats led by competition.

With expected top line growth Radico Khaitan 18%, 12%, United Spirits connected 10%and potential margin expansion, Jefferies argues that the sector of the Indian spirits offers robust growth prospects. The ratings remain in accordance with staples, which indicates sustainable profitability improvement.

(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)