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Premiumisation and Backward Integration Lead to Margin Expansion

Q4FY26 performance was led by continued strength in the Prestige & Above (P&A) portfolio, with P&A volumes growing 20.5% YoY to 4.4 Mn cases, while Popular volumes remained flat at 4.9 Mn cases. Consolidated EBITDA margin expanded by 179 bps YoY to 17.9%, supported by favourable input cost, improved mix and backward integration benefits from the captive PET facility. However, in Q4FY26, PAT declined 52.1% YoY to INR 376 Mn due to one-off tax expense along with higher interest and depreciation cost. Upcoming triggers, such as UK FTA, Malt plant, ENA and bottling plant expansion will be key to supporting margin expansion, from 14.3% in FY26 to 17.6% in FY29E.

View and Valuation

We have reduced our margin estimate for FY27E by 31 bps due to inflationary trends in packing materials (glass and PET). We, however, raise EBITDA margin forecast for FY28E by 50 bps supported by price revision and activation of backward integration projects. We expect volumes and realisation to expand at a CAGR of 12% and 6%, respectively, over FY26– FY29E. Our revised estimate leads to Revenue / EBTIDA / PAT CAGR of 17.3% / 27.2% / 43% over the same period. We, thus, maintain our ‘BUY’ rating on the stock and upgrade TP to INR 690 using the DCF approach.

Margin Outshines, Net Income Impacted due to One-time Tax Cost

* P&A Volume grew by 22%, to 4.4 Mn cases; P&A revenue salience improves to ~56% in Q4FY26 from 49% in Q4FY25

* Popular Volume maintained its run-rate, while revenue from this segment shrank by 2.8% ? Net revenue grew by 9.4% YoY to INR 10.0 Bn (CIE est. of 11.0 Bn), with a similar volume growth of 9.4% YoY and a 1.6% decrease in realisation

* Gross margin improved by 480 bps YoY to 48.2%. EBIDTA came in at INR 1.7 Bn (beating CIE Est. by 10.5%) with a margin 16.8% (+203 bps YoY and +326 bps QoQ)

* Adjusting for a one-time tax hit due to previous year’s tax of INR 454 Mn (incl. interest), net income grew by ~30% YoY to INR 0.8 Bn

New Launches and Renewed Focus on Existing Brands to Boost Growth

ABD Maestro continued to strengthen its super-premium and luxury portfolio in FY26 with launches, such as The Collective Single Malt Whisky and Zoya Gin. Furthermore, ABDL continue to broaden its portfolio across growth categories through new launches including Rangeela Vodka, Yello Designer Whisky and Aodh Irish Whisky. Plans for additional launches in Prestige Vodka and Brandy categories, alongside increasing focus on travel retail, exports and premium ontrade channels will enhance brand visibility and premium positioning.

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