ICRA forecasts Indian alcoholic beverage companies to report 10-12% year-on-year growth in revenues in FY2026. This growth is expected to be led by steady demand, increasing consumer preference for premium products, and price increases approved by various state governments. However, ICRA projects that the Indian alcoholic beverage (alcobev) industry will register a volume growth of around 1-2% in FY2026. The beer segment is projected to outperform spirits, with volumes forecast to grow by 4-6% in FY2026, continuing the trend from the previous year. due to steady demand. In contrast, the spirits segment, comprising Indian Made Foreign Liquor and Country Liquor, may see a volume decline, attributed to relatively higher taxation and increased selling prices.
The operating profit margin (OPM) of ICRA’s sample set of companies is expected to remain stable at 13-14% in FY2026 supported by largely stable input costs. The OPM witnessed a 100 bps expansion in FY2025, reaching 13.9%, as price hikes granted by various state governments helped offset the increase in non-basmati rice prices, one of the feedstocks for spirits manufacturing.
The sample set of companies undertook moderate capital expenditure (capex) amounting to 3–4% of operating income (OI) in FY2025. This is expected to increase to 4-5% in FY2026 and FY2027 due to the ongoing capacity additions. Despite the rise in capital expenditures, leverage and debt coverage metrics are projected to remain healthy, with total debt/ OPBDITA of 0.5-0.7 times and interest coverage ratio of 19-21 times for FY2026, supported by robust cash accruals.
This analysis is based on a sample of leading Indian alcobev companies, including Associated Alcohols & Breweries Limited, GM Breweries Limited, Mohan Meakin Limited, Radico Khaitan Limited, Som Distilleries & Breweries Limited, Tilaknagar Industries Limited, United Breweries Limited, and United Spirits Limited.
