India’s alcoholic beverages industry is expected to see slower growth in the December quarter (Q3FY26), marking a pause after four straight quarters of double-digit expansion, according to brokerage estimates.
Analysts tracking liquor, beer and wine companies expect revenue growth to cool to mid-single digits during the quarter. JM Financial estimates industry revenue growth at around 6.2% year-on-year, a sharp moderation compared with the robust momentum seen over the past year.
Despite the slowdown in topline growth, profitability may improve. Brokerages noted that raw material costs remained stable to benign during the quarter, which should support better gross margins across most players.
According to Emkay’s market checks, grain prices eased to ₹22–23, widening the cost advantage between producing alcohol in-house versus sourcing it externally. This has increased the “make versus buy” margin gap to ₹10–11 per litre of extra neutral alcohol (ENA). Softer rice and maize prices are also helping distillers, particularly those with captive manufacturing facilities.
Meanwhile, Choice Institutional Equities highlighted that festival demand and new premium product launches are likely to support volumes in the prestige-and-above (P&A) segment. The brokerage expects P&A volumes to grow in the mid-to-high teens, offering some relief even as overall industry growth moderates.
Overall, while Q3FY26 may reflect a cooling phase for the alco-bev industry, improving cost conditions and steady premium demand are expected to cushion margins and support earnings.
