India's alcoholic beverage industry got off to a strong start in FY27, with premiumisation driving revenue growth, although rising input costs and policy changes in some states continued to pressure profitability.
Prominent players in the alcobev (alcoholic beverage) market, including United Spirits Ltd. (USL), Radico Khaitan, and Allied Blenders and Distillers Ltd. (ABDL), reported double-digit growth in their prestige-and-above (P&A) segment, which includes premium, luxury spirits like whiskey, vodka, gin, and rum, ranging from 10 to 36%, according to a report by PTI.
The nation's largest beer producer, United Breweries Ltd. (UBL), also recorded a 17% rise in premium volume across its brands, including Heineken, Amstel Grande, Kingfisher Ultra, and Ultra Max.
Radico Khaitan, a domestic liquor company, announced "highest ever volume, top line, profitability" with revenue up 13.22 per cent to Rs 5,867.69 crore and consolidated net profit up 76 per cent to Rs 229.60 crore.
Rampur Single Malt Whiskey, Jaisalmer Indian Craft Gin, Morpheus Brandy, Royal Ranthambore, and 8PM Premium Black were among the P&A brands whose volume increased 35.8% to 5.22 million cases.
During an investors' call, Managing Director Abhishek Khaitan stated, "Our performance was driven by the continued success of our premiumization strategy with our P&A portfolio delivering 36% volume growth during the quarter and significantly outpacing the industry."
In FY27, he anticipates that the P&A portfolio would increase volume by more than 25% and maintain an EBITDA margin of about 20%.
With the help of the P&A segment, Diageo-owned USL, which owns brands like Johnnie Walker, Black Dog, Black & White, VAT 69, Singleton, Smirnoff, and Tanqueray, posted a 51.6% increase in net profit to Rs 391 crore.
"Our P&A volume has grown by 6.4%, excluding Maharashtra." In an investors' call, its Managing Director and CEO Praveen Someshwar stated, "We have grown 14.8% on NSV growth based on the same construct against the reported P&A growth of 10.1%, excluding Maharashtra."
In June quarter, operating revenue increased by 5% to Rs 6,113 crore. The popular segment's NSV (net sales volume), which accounts for less than 10% of total revenue, decreased by 17.5% to Rs 206 crore.
"Growth in Own Brands was driven by strong traction in our Elite & Premium portfolio, with our Elite flagship brands, The Source and Rāsā, delivering robust double-digit growth," Rajeev Samant, CEO of Sula Vineyards, said.
Officer's Choice Whiskey manufacturer ABDL reported an 18.65% drop in consolidated net profit to Rs 45.42 crore, while operating revenue increased 5.8% to Rs 984 crore.
Global supply chain interruptions had a temporary effect during the quarter, according to Managing Director Amar Sinha, but the business continued to prioritise premiumization and backward integration initiatives.
As it recorded a 5.8% year-over-year increase in its income from operations to Rs 984 crore in the June quarter on volumes of 9 million cases (9 litres each), up 6.2%, its premiumization campaign continues to be the primary growth lever going forward.
Despite a 10% increase in revenue to Rs 5,919.44 crore, UBL's consolidated net profit fell 9.64% to Rs 166.28 crore as a result of increased expenses and the West Asia conflict.
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"Premium margins have become accretive for the first time in the past quarter," UBL CFO Jorn Kersten stated, adding that the premium portfolio would become a significant contributor to profitability going forward.
The company reported that premium volumes increased 17%, excluding two states where it took steps to mitigate the impact of the war, led by Heineken Silver and Kingfisher Ultra.
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