New Delhi, October 2, 2025:
India’s alcoholic beverage industry is set to post a strong revenue growth of 10–12% in FY26, thanks to rising demand for premium brands and price hikes approved by state governments, according to a report by ICRA.
While revenues are expected to climb, the industry’s sales volume growth will likely remain muted at just 1–2%. The beer segment is expected to lead the way, with volumes growing 4–6% on the back of steady consumer demand. Spirits—including whisky, Indian Made Foreign Liquor (IMFL), and country liquor—may see a dip in volumes, mainly due to higher taxes and rising retail prices.
Operating margins are expected to stay steady at 13–14%. In FY25, margins improved to 13.9% as state-approved price increases helped absorb the higher cost of non-basmati rice, a key raw material for spirits.
The report also highlights that alco-bev companies spent about 3–4% of their operating income on capital expenditure (capex) in FY25. This investment is set to rise to 4–5% in FY26 and FY27, as companies expand production capacity.
Despite the increased spending, the sector’s financial health is projected to remain strong. Debt levels are expected to stay low, with a debt-to-EBITDA ratio of 0.5–0.7 times, while interest coverage is forecast at a healthy 19–21 times, supported by robust cash flows.
