Strong Q1 FY27 earnings, premiumisation trend, India-UK FTA optimism and favourable IMFL industry tailwinds drive buying interest in liquor shares
Shares of leading Indian liquor companies remained in strong demand on Wednesday, with Radico Khaitan, United Spirits (USL), Tilaknagar Industries and Allied Blenders and Distilleries gaining up to 4% in intraday trade on the BSE.
Radico Khaitan hits record high
Radico Khaitan share price surged 4% to a record high of ₹4,451 during Wednesday’s intraday session. The stock has now advanced for four consecutive trading sessions, rising 9% during this period and nearly 70% over the last four months.
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The rally followed the company’s strong Q1 FY27 earnings performance, which exceeded Street expectations.
USL reaches 52-week high
United Spirits Ltd (USL) climbed 2% to ₹1,536, marking a 52-week high. The stock has gained for six straight trading sessions and is up around 10% during the period.
Meanwhile:
- Tilaknagar Industries rose 4% to ₹463.60
- Allied Blenders and Distilleries gained 3.5% to ₹643.20
Both stocks outperformed the BSE Sensex, which was trading about 1% higher.
What is driving liquor stocks higher?
Radico Khaitan posts strong Q1 FY27 results
Radico Khaitan reported a robust operating performance for the quarter ended June 2026:
- Net revenue: ₹1,683.7 crore (up 11.8% YoY)
- EBITDA: ₹348.9 crore (up 50.3% YoY)
- EBITDA margin: 20.7%, a record high
- Gross margin: 49.1%, up 610 basis points YoY
- Adjusted PAT: ₹229.6 crore (up 67% YoY)
The company’s Prestige & Above (P&A) segment continued to outperform, with revenue growing 36% YoY to ₹970 crore, while Regular & Other revenues declined 17.3% YoY.
A better product mix and lower raw material costs supported profitability, despite a ₹30 crore impact from higher packaging expenses.
Premiumisation remains a key growth driver
Radico Khaitan management said the Indian-Made Foreign Liquor (IMFL) industry is benefiting from:
- Progressive regulatory reforms in key states
- An improving policy environment
- Rising consumer preference for premium liquor brands
- Strong brand recall and customer loyalty
The company also highlighted favourable long-term trends such as rising disposable incomes, urbanisation, improving demographics and growing demand for premium drinking experiences.
Guidance upgraded for FY27
Following the strong quarterly performance, Radico Khaitan raised its P&A volume growth guidance to 25% for FY27, up from 20% earlier. The company also reiterated its target of 20% EBITDA margins for FY27.
Brokerage firm ICICI Securities noted that the company’s performance was significantly ahead of expectations, supported by stronger operating earnings, higher other income and lower interest costs.
United Spirits: Growth drivers and challenges
Analysts believe United Spirits remains well placed to benefit from several industry tailwinds, including:
- The company’s supply agility program
- Implementation of the India-UK Free Trade Agreement (FTA)
- Recent liquor price reductions in Karnataka
- Stable ENA (Extra Neutral Alcohol) prices
According to JM Financial Institutional Securities, the overall operating environment for the liquor sector remains favourable due to healthy premiumisation trends, FTA rollout and the possibility of market reforms in Tamil Nadu.
USL management continues to guide for double-digit P&A sales growth, with:
- Volume growth: 5–6%
- Realisation growth: 6–7%
The brokerage highlighted strong momentum across the rest of India, where P&A sales grew 14.8%, driven by:
- Continued traction in Royal Challenge
- Strong performance of Signature
- Rapid growth in Smirnoff, whose contribution increased to 10% of P&A sales in Q1 FY27, compared with 3% in FY26
- Benefits from favourable Karnataka policy changes
The report also noted that Maharashtra Made Liquor (MML) sales have stabilised, with no quarter-on-quarter deterioration observed.
However, analysts at Choice Institutional Equities cautioned that intensifying competition, elevated packaging costs and the Maharashtra MML policy could create medium-term headwinds for growth.
Outlook for Indian liquor stocks
The recent rally in Radico Khaitan, United Spirits, Tilaknagar Industries and Allied Blenders reflects growing investor confidence in India’s premium spirits story.
Industry analysts believe the sector is being supported by:
- Premiumisation across whisky and vodka categories
- Favourable demographic trends
- Rising urban consumption
- Stable input costs
- Regulatory improvements in key states
- Potential benefits from the India-UK FTA
With premium spirits continuing to gain market share in the IMFL industry, leading branded players with strong distribution networks and premium portfolios are expected to remain key beneficiaries of India’s evolving alcoholic beverages market.
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