Tilaknagar, Radico gain upto 11%; why are these liquor stocks rising today?

Business Standard

12-06-2025

Tilaknagar Industries, Radico Khaitan shares today
Shares of liquor companies, Tilaknagar Industries (TI) and Radico Khaitan, rallied up to 11 per cent on the BSE in Thursday's intraday trade, amid heavy volumes, as inventory for rice touched record levels, while that for wheat surged to a four-year high.
Higher inventory levels of rice and wheat augur well for liquor companies as it lowers the input cost for the industry, according to analysts. Today's rally in share prices of TI and Radico Khaitan have helped them recoup all of their losses recorded on Wednesday.
Among individual stocks, share price of Tilaknagar Industries, the maker of Mansion House Brandy, India;s largest and world's second largest selling brandy, surged 11 per cent to ₹379.10 in the intraday trade today. Average trading volume on the counter more-than-doubled with a combined 5.69 million shares changing hands on the NSE and BSE. On Wednesday, the stock had fallen 5 per cent.
Shares of Radico Khaitan, meanwhile, gained 4 per cent to ₹2,652 in the intraday trade today, erasing its entire 3.7 per cent decline recorded on Wednesday. In comparison, the BSE Sensex was down 0.34 per cent at 82,235 at 10:50 AM.
India's rice stocks hit record high, wheat reserves strongest in 4 years
According to reports, India's rice stocks in the government warehouses rose 18 per cent from a year ago to a record high at the start of June, while wheat stocks hit their highest level in four years on higher procurement from farmers.
State reserves of rice, including unmilled paddy, totalled record 59.5 million metric tonnes of as of June 1, 2025, exceeding the government's target of 13.5 million tonne for July, 1, Reuters reported.
Brokerages view on liquor stocks
Analysts believe an increase in the production of rice will lead to the improvement in supply of broken rice and reduce the prices in the near-term. This will reduce stress on the gross margins for liquor companies in the coming quarters due to lower procurement cost.
"The Indian Made Indian Liquor (IMIL) segment's growth is expected to be driven by a growing consumer base, rising rural incomes, consumption, conversion from illicit/toddy to IMIL with increasing awareness about health and quality, conducive regulatory policies and population growth. In the short run, the IMIL industry could benefit from lower discretionary incomes, which would push up demand for lower-priced liquor," according to Mirae Asset Sharekhan.
The government is targeting to achieve a 20 per cent ethanol blending by 2025, which would result in higher demand for grain-based molasses in the coming years, it added.
Meanwhile, over the last couple of years, the spirits industry has been grappling with significant raw material inflation, leading to shrinking profitability margins. "Any rise in cost of raw materials e.g., molasses and grains or packing materials e.g., glass, packaging material may affect the margins of the Company. Dependence on any supplier may expose the company to supply risk," TI had said in its FY24 annual report.
About Tilaknagar Industries, Radico Khaitan
Tilaknagar Industries (TI) is one of India's leading alcoholic beverage (alcobev) companies, transformed into a major player in the Indian Made Foreign Liquor (IMFL) industry. TI's brand portfolio straddles multiple categories, featuring two 'Millionaire' brandy brands—Mansion House and Courrier Napoleon—along with a strong presence in whisky, rum, and gin through Mansion House Whisky, Madiraa Rum and Blue Lagoon Gin. Recently, TI has expanded into the luxury segment with Monarch Legacy Edition brandy.
Radico Khaitan, on the other hand, is among the oldest and one of the largest manufacturers of IMFL in India. In 1998, the company started its own brands with the introduction of 8PM Whisky. The company is also one of the largest providers of branded IMFL to the Canteen Stores Department (CSD), which has significant business barriers to entry.