Alcohol Stocks Surge Amid Policy Shifts & Premiumization Trends

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Alcohol Stocks on a High: Sharp Gains, But Stock Selection Remains Crucial

By S JHA

MUMBAI, June 12, 2025 – Shares of alcohol companies in the Indian stock market have witnessed a robust rally. Gains in such stocks came amid favourable policy changes, rising demand for premium beverages, and strong financial performances.

India’s alcohol stocks are serving up impressive returns, with several counters witnessing sharp rallies that have caught the attention of both retail and institutional investors. However, analysts caution that while the sector shows strong momentum, careful stock selection remains essential.

Top performers in the alcohol pack include the likes of Tilaknagar Industries, GM Breweries, Allied Blenders and Distillers, and SOM Distilleries.

Momentum scores over different time frames further highlight the strength in select stocks. “SOM Distilleries posted consistently high momentum scores of 85 (1 month), 75 (3 months), and 90 (6 months), while Radico Khaitan, Tilaknagar Industries, and Allied Blenders also demonstrated solid trends,” said StockEdge in a sector commentary on its Telegram channel.

However, not all stocks are displaying uniform strength. For example, while Tilaknagar boasts a strong recent run with 1-month and 3-month scores of 82 and 90 respectively, its 6-month score dips to 45 — indicating recent outperformance but prior consolidation, added the Kolkata-based brokerage firm.

It also stated that market breadth indicators over the past five days further reflect the sector’s strength:

10 stocks have RSI above 50, signaling bullish momentum.
8 to 9 stocks are trading above their 20, 50, and 100-day SMAs, suggesting broad-based technical support.
8 to 9 stocks have a Relative Strength (RS 55) greater than 0, indicating relative outperformance against the benchmark.

Despite the impressive rally, StockEdge analysts advise investors to avoid a herd mentality. “The sector is strong — but stock selection is key,” they noted, highlighting that momentum can be fickle, and fundamentals should not be ignored.

With India’s consumption story remaining robust and several companies benefiting from improving margins, regulatory clarity, and brand expansion, the alcohol sector may continue to see investor interest. But as the recent data suggests, not every stock will pour equally rich returns.

Industry leaders such as Radico Khaitan, United Spirits, and Tilaknagar Industries have seen significant gains.

According to technical scan data from StockEdge, several alcohol stocks have shown bullish momentum, with key players like Radico Khaitan crossing critical resistance levels. “Radico Khaitan’s stock has surged over 7% this month, recently hitting an all-time high of ₹1,910 per share, driven by strong volume growth in its premium and luxury segments,” noted a recent StockEdge report.

The company’s focus on premium brands like Rampur Indian Single Malt and Magic Moments Vodka has resonated with investors, contributing to a remarkable 411% gain over the past four years.

The rally follows a series of positive developments in the sector. The Andhra Pradesh government’s new liquor policy, effective from October 1, 2024, which allows private retailers to sell liquor, also are boosting gains in liquor stocks.

“The policy is expected to enhance distribution efficiency and boost revenues for alcohol companies,” said a market analyst from Upstox. Additionally, the government’s decision to lift the ban on sugarcane juice and sugar syrup for ethanol production in 2024-25 led to an 8-20% surge in stocks like Globus Spirits and GM Breweries, as ethanol is a key base for alcoholic beverages.

Tilaknagar Industries also grabbed headlines with the launch of Monarch Legacy Edition, a premium brandy, which helped the stock make a 4% stock jump in late 2024. “The launch marks a bold step towards elevating Indian brandy to a global benchmark,” said Amit Dahanukar, Chairman and Managing Director of Tilaknagar Industries. This move aligns with the industry’s premiumization trend, with companies like United Spirits reporting that their Prestige and above category now accounts for 69.4% of total revenues, up from 60% last year.

However, the sector faces headwinds. The India-UK Free Trade Agreement (FTA) negotiations, which propose phased import duty cuts on scotch whisky, have raised concerns about competitive pressures. “Lower import duties could challenge domestic players, but companies like Radico Khaitan and United Spirits are well-positioned due to their strong domestic portfolios,” said Anant S. Iyer, Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC).

Additionally, a recent tariff reduction on US bourbon whiskies also weighs on liquor stocks. The Indian liquor industry is valued at $52 billion, while being projected to reach $70 billion by 2026.

Brokerages like Elara Capital remain bullish, maintaining a ‘buy’ rating on Radico Khaitan with a target price of ₹2,000 per share.

(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)

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