Premium alcohol consumption in India is picking up. A recent report shows alcohol volumes grew about 7% year-on-year (YoY) in the first half of 2025. What stands out is the premium segment. It is growing faster than the overall market. People are not just drinking more. They are moving to better quality products.
A big reason for this shift is changing consumer behaviour. Younger consumers are experimenting more. They are choosing premium spirits and cocktails instead of traditional options. Urban demand is also playing a role. India still consumes much less alcohol per person compared to global levels. That leaves enough room for growth going ahead.
This is where the investment angle comes in. When people upgrade, companies earn more per unit. Margins improve. Profits can grow faster than volumes. Companies with strong brands and wider reach are better placed to benefit from this shift.
The companies chosen for this article reflect this trend. They have been focusing more on premium products. Their realisations are improving. Margins are holding up well. At the same time, their balance sheets and return ratios remain comfortable, which adds to the overall comfort.
#1 United Spirits: Betting on the Scotch-led premium shift
United Spirits (USL) 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.
In Q3 FY26, revenue grew about 7.6% YoY to Rs 3,694 crore, driven by better realisations and a favourable product mix. Net profit also saw an improvement of 24.8% YoY to Rs 335 crore, supported by margin expansion and cost control. Growth was led by premium and above categories, where value growth remained strong despite volume pressure in select markets.
The Scotch-led strategy
The company highlighted that its top-end portfolio continues to perform well. Premium brands such as scotch-led offerings and innovation in products like flavoured vodka supported growth. Price mix remained strong at over 10% during the quarter. This indicates consumers are shifting towards higher-priced products, reinforcing the premiumisation trend in the industry.
The Maharashtra impact
Growth remained broad-based across most states, excluding Maharashtra, where the introduction of lower-priced alternatives impacted volumes in the mass segment. Excluding this impact, the company reported around 6% volume growth and about 14% value growth in the rest of India. This suggests demand remains healthy, especially in urban and premium categories.
On the strategic front, the company continues to focus on strengthening its premium portfolio. It is expanding its presence in luxury segments through global brands and new product launches. Premium innovations and brand-led campaigns are being used to attract younger consumers and drive higher realisations.
At the same time, United Spirits is managing near-term challenges. Competitive pressure in certain states and inflation in key inputs like bulk scotch remain areas to watch. However, stable input costs and disciplined marketing spends have helped support margins in the quarter.
Going ahead, the company remains cautiously optimistic. Management expects premium demand to sustain, supported by rising incomes and improving consumer sentiment. While regulatory and competitive risks persist, the continued shift towards premium alcohol consumption is likely to remain the key growth driver for the business.
In the past year, share price of United Spirits is down 2.5%.
United Spirits 1 Year Share Price Chart
#2 Radico Khaitan: The ‘premium & above’ powerhouse scaling new heights
Incorporated in the year 1943, Radico Khaitan is one of the most recognised Indian Made Foreign Liquor (IMFL) brands in India. The company was initially known as Rampur Distillery Company and was focused on distillation and bottling for branded players and canteen stores of armed forces.
Later on in the year 1997, Radico Khaitan ventured into its own branded IMFL products and launched its first brand 8PM whisky which became its millionaire brand within a year of its launch.
For Q3 FY26, the company reported net revenue of Rs 1,547 crore up 19.6% YoY. It recorded its highest-ever quarterly volumes at 9.75 million cases, reflecting a growth of about 16.7% YoY. Profitability also improved. Net profit for Q3 stood at Rs 155 crore up 61.5% YoY.
Growth was led by the premium and above category. This segment reported 26% volume growth and 29% value growth during the quarter. Realisations improved by about 2.8% YoY, indicating a clear shift toward higher-priced products. Premiumisation contributed meaningfully to margin expansion, alongside softer raw material costs.
Beyond 8PM: How royal Ranthambore’s 50% growth is redefining the bottom line
Key brands in the premium portfolio saw strong traction. Royal Ranthambore whisky grew over 50% during the quarter. Magic Moments vodka reported 18% volume growth and crossed Rs 1,050 crore in sales for the nine-month period. After Dark whisky also delivered 40% growth, while 8PM Premium Black regained momentum following a relaunch.
The company continues to focus on expanding its premium portfolio. Recent launches such as Rampur 1943 single malt and other luxury offerings are gaining early traction. Management indicated that the next phase will focus on scaling distribution of these brands across India rather than launching too many new products.
The Scotland gambit
On the global front, Radico has approved setting up a wholly owned subsidiary in Scotland. This move is aimed at securing access to matured malt supply and strengthening its premium whisky portfolio. The company may evaluate investments in malt sourcing or distillation over time, depending on market opportunities.
Exports remain a smaller but growing part of the business, contributing about 8% to revenue. The company is also focusing on global travel retail and premium international markets to expand its footprint.
Going ahead, the company expects premiumisation to remain the key growth driver. Margin outlook remains stable due to a favourable cost environment and operating leverage. While state-level regulations and demand fluctuations remain risks, the shift toward premium alcohol consumption is likely to support steady growth in the near term.
In the past year, share price of Radico Khaitan rallied 24.6%.
Radico Khaitan 1 Year Share Price Chart
#3 United Breweries: Reclaiming Margins through the Heineken-led Premium Play
United Breweries (UBL) is engaged in the business of manufacture and sale of beer and non-alcoholic beverages.
The Heineken Effect
For Q3 FY26, net sales grew about 3.7% YoY to Rs 2,073 crore, supported mainly by price hikes and favourable state mix. Net profit grew 107.7% YoY to Rs 81 crore. The improvement was driven by better product mix, higher premium contribution, and cost efficiencies.
Premiumisation remained a key theme. The company continued to see strong momentum in its premium portfolio, including brands such as Heineken, Heineken Silver, Amstel Grande, and Kingfisher Ultra. It has also been localising premium production across breweries, which has started reflecting in margins. Realisation growth of around 5% during the quarter was split between pricing and product mix.
Efficiency Play
On the operational front, the company is focusing on structural improvements. Its cost and productivity program is expected to deliver savings of 3–6% over FY26–FY28. Part of these savings will be reinvested into brand building and premium portfolio expansion. Improvements in bottle return rates and supply chain efficiencies also supported margins in the quarter.
The company is also investing in innovation to drive category growth. It recently launched Kingfisher Smooth, targeted at younger consumers, and is expanding it across key states. Investments in distribution, including over 35,000 visi-coolers across outlets, are aimed at improving visibility and driving premium consumption.
However, near-term challenges remain. Beer volumes declined in several key states due to pricing pressures and weak affordability. Inflation in inputs such as aluminium and barley is also a concern. Regulatory changes across states continue to create volatility in demand.
Going ahead, the company expects gradual recovery in volumes, supported by seasonal demand and easing base effects. Over the longer term, it remains confident of achieving mid-single-digit growth for the industry. The continued shift toward premium beer is likely to remain central to both margin expansion and future growth.
In the past year, share price of United Breweries is down 13.1%.
United Breweries 1 Year Share Price Chart
#4 Allied Blenders & Distillers: Riding the Prestige wave with aggressive backward integration
Incorporated in 2008, Allied Blenders and Distillers manufactures, purchase and sells Alcoholic Beverages /liquids.
In Q3 FY26, income from operations stood at Rs 1,003 crore, up 5.9% YoY. Net profit came in at Rs 64 crore, marking a growth of 12.3% YoY.
The ‘P&A’ pivot
Growth was largely driven by the prestige and above (P&A) segment. P&A volumes grew 16.9% YoY, while sales in this segment rose 15.2% during the quarter. In contrast, the mass premium segment declined due to state-level disruptions, including policy changes in Maharashtra and retail license issues in Telangana.
The company continues to shift its portfolio toward higher-margin products. The share of P&A in overall sales has increased, supported by strong demand in northern markets and rising premium consumption trends. Realisations improved slightly during the quarter, reflecting better product mix rather than volume-led growth.
Margin protection: The strategic shift to self-sustained PET and Malt production
On the expansion front, the company is investing heavily in backward integration. A PET bottle manufacturing facility has already been commissioned and is contributing to margins. A malt distillery, aimed at supporting single malt production, is expected to be operational by Q4 FY26. In addition, ENA distillation capacity is being expanded, with full commissioning targeted by Q4 FY27.
Capacity expansion is also underway in key states. Bottling capacity is being scaled up in Maharashtra and Uttar Pradesh, with new facilities expected to be operational by FY27. These investments are aimed at improving supply chain efficiency and reducing dependence on third parties.
The company is also strengthening its global presence. It has expanded its export footprint to 31 countries and plans to reach 35 markets by March 2026. The export business operates on an asset-light model and delivers higher profitability compared to domestic operations.
Going ahead, management expects growth to remain driven by premiumisation and portfolio mix improvement. Margin expansion is likely to continue as backward integration benefits kick in. While regulatory changes and state-level disruptions remain key risks, the long-term outlook remains tied to the rising demand for premium alcohol in India.
In the past year, share price of Allied Blenders and Distillers surged 36.8%.
Allied Blenders and Distillers 1 Year Share Price Chart
Comparative analysis: Which alcohol stock offers the best value?
Let’s now turn to the valuations of the companies in focus, using the Enterprise Value to EBITDA multiple as a yardstick.
Valuations of Companies in focus
| Sr No | Company | EV/EBITDA Ratio | 5-Year Average EV/EBITDA | Industry Median | ROCE | ROE |
| 1 | United Spirits | 34.6 | 40.4 | 11.5 | 26.5% | 19.7% |
| 2 | Radico Khaitan | 41.1 | 43.8 | 16.2% | 13.6% | |
| 3 | United Breweries | 49.0 | 59.6 | 13.9% | 10.8% | |
| 4 | Allied Blenders and Distillers | 24.2 | 29.4 | 21.1% | 20.0% |
Return ratios show a clear gap between players. United Spirits is ahead with ROCE of 26.5% and ROE of 19.7%. Allied Blenders is also strong at 21.1% ROCE and 20.0% ROE. In comparison, Radico Khaitan (ROCE 16.2%, ROE 13.6%) and United Breweries (ROCE 13.9%, ROE 10.8%) are lower.
Valuations are still expensive across the board. United Spirits trades at 34.6x EV/EBITDA, Radico Khaitan at 41.1x, and United Breweries at 49.0x. Even Allied Blenders, at 24.2x, is above the industry median of 11.5x. Most are below their own 5-year averages, but still not cheap.
The bigger trend is premiumisation. People are shifting to better quality alcohol. This is helping companies improve realisations and margins, even when volume growth is not very strong.
Each company is approaching this differently. United Spirits is relying on its strong brand portfolio. Radico is pushing premium brands like Rampur and Jaisalmer. United Breweries is focusing on premium beer. Allied Blenders is moving from mass to prestige and above segments.
Overall, the sector looks strong because of this shift. But valuations already reflect a lot of this optimism. Execution will be key from here.
Conclusion
The shift towards premium alcohol is quite visible now. Companies are trying to earn more from each bottle rather than just selling more. That change is playing out across segments.
At the same time, not everyone is at the same stage. Some companies already have stronger brands and better return ratios. Others are still trying to move up the ladder. That gap will become clearer over time.
Valuations are still on the higher side. Even after some cooling off, most stocks are not cheap. The market is already expecting steady growth and better margins.
So from here, it really comes down to execution. Who manages to grow their premium portfolio without hurting volumes, and who keeps costs under control.
Overall, the space looks good, but not easy. Better to stay selective and keep tracking how things play out.
You can track how these companies progress on the back of increasing alcohol consumption by adding these stocks to your watchlist.
Note: We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available, 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 educative purposes only.
Ekta Sonecha Desai has a passion for writing and a deep interest in the equity markets. Combined with an analytical approach, she likes to deep dive into the world of companies, studying their performance, and uncovering insights that bring value to her readers.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
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