Stock Market Update: Liquor Stocks on the Rise
As the festive season and winter approach, liquor companies like United Breweries, United Spirits, and Radico Khaitan are gaining attention in the stock market. Their shares have been volatile recently but have seen significant growth—up to 65% over the past year.
On Tuesday, companies like Associated Alcohols and Globus Spirits saw their share prices increase by as much as 7%. Analysts are optimistic about these stocks, predicting stronger performance in the second half of the financial year (H2), especially due to the festive season and wedding season.
After a weaker first half, driven by extreme summer heat, experts believe Q2 may still improve, although it historically tends to be slower due to the monsoon. Analysts from Elara Securities noted some early signs of growth in the premium alcoholic beverage segment, with expectations of a healthy 14.5% year-on-year growth for Radico Khaitan in Q2.
United Breweries is also projected to see a 6-7% growth in beer volume for Q2 as business picks up after election-related restrictions. Factors such as favorable weather and a lower comparison base from last year are expected to boost earnings in H2.
Analysts also highlighted that reductions in glass and barley prices could improve profit margins for United Breweries. Overall, the outlook for the second half of the financial year appears positive, with growth anticipated across the sector.
