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Brands Outshine, Margin Expand

CapEx Plan on Track; Margin to Expand by 289 bps over FY25–FY28E

ABDL’s plan for backward integration consisting of malt plant, expanded distillery capacity and PET bottling facility is on track. PET Plant went live by Q2 FY26, the full impact of which will be seen in the upcoming quarter (Read our Plant Visit note here). We expect the PET plant to save INR 300 Mn/year or 0.6% of FY27E Net Revenue. The PET plant has a capacity of 600Mn bottles p.a. and will fulfil a significant portion of Rangapur Integrated Manufacturing Facility’s packaging needs. The new facility, equipped with advanced automation, robotics and recycling systems, is expected to enhance supply chain efficiency and reduce logistics cost.

View and Valuation

We revise our estimate upwards by 3% / 2% for FY26E / FY27E on the back of sustained margin expansion seen over H1FY26. We now forecast Revenue / Net Income to grow by 15.5% / 33% over FY25–FY28E, supported by strong execution, upcoming brand launches and backward integration. We, therefore, raise our TP to INR 690 using the DCF approach, while maintaining our “ADD” rating. Our TP implies a PE of 55x / 42x for FY27E / FY28E.

Strong Performance: Net Income Up ~30% YoY

* The revenue from Prestige and Above (P&A) category stood at INR 5.6Bn, growing by 38.1% YoY. NSR stood at INR 1,329 for P&A category (7.5% increase YoY)

* Net revenue came in at INR 9.9Bn, with a growth of 14.1% YoY (CIE Est. of INR 9.8 Bn)

* EBIDTA came in at INR 1.3Bn (CIE Est. of INR 1.2 Bn), increasing by 21.0% YoY, owing to strong growth in P&A volumes

* PAT came in at INR 629Mn (CIE est. of INR 672Mn) versus INR 481Mn corresponding to the same quarter last year, an increase of 30.7% YoY

Key Brands Outshine: Robust Volume Growth and Accelerated Premiumization

ABDL delivered 9 Mn cases, up 8.4% YoY, supported by broad-based growth across regions and sustained consumer demand for its core brands. The P&A portfolio further strengthened its position, with volume salience increasing to 47.1% (from 39.7% in Q2FY25) and value salience rose to 56.9% (from 49.0%). ABDL’s flagship brand “ICONiQ White” sustained its strong growth trajectory selling 5 Mn cases in H1FY26 (vs. 5.7 Mn cases in full year FY25). We expect volumes to expand to 41 Mn cases by FY28E, driven by high-profile brand launches and concentrated efforts in the on-trade space.

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