Allied Blenders and Distillers is evolving from a turnaround story into a premiumisation-led growth story, and may see meaningful margin expansion, according to Jefferies.
The company expects strong double-digit P&A volume growth over the medium term & meaningful margin expansion over FY26-28e driven by premiumisation & the benefit of backward integration.
The company's management remains confident of sustaining more than 20% growth in ICONiQ White over the medium term and continuing to gain market share.
Jefferies believes strong consumer acceptance and an extensive distribution network are expected to support industry-leading growth despite rising competition.
Additionally, the relaunch of legacy brands and new launches in premium whisky and Deluxe Vodka should support incremental growth.
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Management remains confident of delivering double-digit volume growth, supported by mid-to-high teens growth in the Prestige & Above (P&A) portfolio and mid-single-digit growth in the Mass Premium category.
While margin expansion in FY27 is expected to remain muted, Jefferies believes FY28 should witness meaningful improvement driven by the benefits of backward integration, operating leverage and the revival of legacy brands.
“Allied Blenders is amidst a transformation journey, investing behind portfolio expansion and backward integration. We expect growth to remain in healthy double digits along with meaningful margin expansion, led by UK FTA benefits and gains from backward integration,” Jefferies said.
The brokerage firm maintained a ‘Buy' rating on Allied Blenders and Distillers shares with a target price of Rs 780 apiece, implying an upside potential of over 26% from Monday's closing price.
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