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.

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