India liquor stocks rally on UK trade deal, premium spirits focus

Business Standard

25-07-2025

Shares of India's Tilaknagar Industries Ltd and Allied Blenders & Distillers Ltd have surged more than 40 per cent since late April
Bloomberg
Indian alcoholic beverage stocks have outperformed global peers over the past three months on the back of a newly-signed UK trade deal and a focus on premium spirits.
'We expect momentum in the second half to hold,' partly fueled by the UK accord and continued premiumization in the market, said Ajay Thakur, an analyst at Anand Rathi Securities.
The UK-India trade deal signed Thursday will halve import tariffs on whisky and gin to 75 per cent before reducing them to 40 per cent in a decade. That's expected to lower costs and improve margins for distillers in the South Asian nation, which often blend imported Scotch whisky with domestic grain-based spirits.
Radico Khaitan Ltd plans to ship in ₹250 crore ($29 million) worth of bulk Scotch in fiscal 2026 and stands to benefit from the accord, ICICI Securities Ltd wrote in a note in June. Its shares have gained 10 per cent in the last three months.
At the same time, the country's drinkmakers are expanding into premium booze to tap consumers at home and abroad. On Thursday, Tilaknagar said it will enter the Indian whisky market by buying Pernod Ricard SA's Imperial Blue brand.
Still, volatility in input prices may stymie the stocks' rally, particularly given the inconsistent supply of broken rice, a key material in alcohol production. Rising competition in the premium segment is another concern.
Even so, more companies breaking into the luxury liquor market can help increase brand awareness and support overall industry growth, said Thakur.