Q1FY26 Quarterly Results Review by Choice Institutional Equities
Executive Summary
* In Q1 FY26, Private Final Consumption Expenditure (PFCE) growth slid on both, real and nominal, terms, signalling a slowdown, while premiumization was evident in rising Prestige & Above (P&A) volumes
* Maharashtra steeply hiked excise on IMFL and Premium IMFL categories, negatively impacting prices for a month in Q1. The impact on Q2 is yet to be ascertained. As an alternative, a lowerduty, grain-based Maharashtra Made Liquor (MML) category has been introduced, which is produced and sold locally
* Meanwhile, Delhi extended its previous excise policy for nine months, while Telangana’s payment cycle normalisation provided regulatory tailwinds
* We expect AlcoBev companies to sustain growth through FY26, supported by sector tailwinds and the upcoming festive season
Our Long-term Investment Ideas
Radico Khaitan Limited (RDCK)
CMP: INR 2,840 | TP: INR 3,340 | Rating: BUY | Upside: 17.6%
Investment Thesis:
* Well-established Portfolio Set To Drive Growth
* Distribution Scale Positions RDCK Among the Market Leaders
* Backward Integration Complete: Awaiting margin expansion
Allied Blenders & Distillers Limited (ABDL)
CMP: 494 | TP: INR 590 | Rating: ADD | Upside: 19.4%
Investment Thesis:
* Portfolio Transformation Unlocks Premium Growth
* Strong Distribution Network Providing A Springboard For Brand Launches
* Margin Expansion To Continue With Vertical Integration
Tilaknagar Industries Limited (TLNGR)
CMP: INR 460 | TP: INR 650 | Rating: BUY | Upside : 41.4%
Investment Thesis:
* Imperial Entry: TLNGR’s Royal Leap Beyond Brandy
* Brandy Dominance And Strategic Partnerships
* From Survival To Growth Investment – Financial Turnaround
Associated Alcohols & Breweries Limited (AAB)
CMP: INR 1,002 | TP: INR 1,300 | Rating: BUY | Upside: 29.7%
Investment Thesis:
* From Grain to Glass: Operational Leverage Through Integration
* Path To Premium: Multi-state Expansion As a Growth Catalyst
* Stable Cash flows Powering Self-Funded Growth
PFCE growth slows down; Mass consumption affected
* For Q1FY26, PFCE growth slowed down, from 8.3% a year ago to 7%, indicating slowdown in mass consumption
* However, Luxury and Premium segments sustained strong performance, reinforcing the premiumization trend highlighted in our AlcoBev Thematic (Read here).
* Possible catalysts for growth in consumption are – the GST rate rationalisation and the onset of the festive season in Q3 FY26E
* With an increase in P&A launches, we project sustained sector growth as these new brands gain traction
Pernod Ricard business update (FY ended 30th June, 2025)
* In FY25, Pernod Ricard India delivered a 6% organic net sales, contributing 13% to global net sales, with premiumization driving +8% growth, excluding Imperial Blue.
* Royal Stag and international brands, led by Jameson, delivered a double-digit growth.
* The Imperial Blue divestment is set to accelerate premiumization, although Maharashtra’s excise policy changes is feared to pose nearterm headwinds in FY26.
Q1 FY26: Performance Analysis
* UNITDSPR is likely to be constrained to industry-level growth amid state policy headwinds.
* UNITDSPR reported a net revenue of INR 30.2Bn, posting a growth of 9.4% YoY, while EBIDTA came in at INR 6.4Bn, a decline of 9.7% YoY, mainly due to one-off indirect tax of INR 0.43Bn in Q1FY26.
• We forecast revenue / EBITDA / PAT to grow by 11.8% / 16.1% / 11.3% for FY26E.
* RDCK’s Q1 growth was led by 37.5% rise in volumes, while Prestige & Above grew faster by 40%
* Meanwhile, it also experienced regulatory tailwinds, driving market share gains in key states
* It posted a net revenue of INR 15.1Bn, up 32.5% YoY, while EBITDA stood at INR 2.3Bn, up 55.8% YoY, in Q1FY26
* We forecast revenue / EBITDA / PAT to grow by 24.9% / 36.9% / 59% for FY26E.
* ABDL saw a robust increase in volume of 16.4% YoY to 8.5 Mn cases, with NSR reaching INR 1,086 in Q1FY26
* The P&A portfolio showed 46.9% volume growth in Q1FY26
* It posted a net revenue of INR 9.3Bn, up 21.8% YoY. Meanwhile, EBITDA saw an increase by 49.9% YoY to INR 1.1Bn, Q1FY26
* We forecast revenue / EBITDA / PAT of 14.1% / 19.2% / 25.6% for FY26E.
* TLNGR’s INR 41.2Bn Imperial Blue acquisition, to be completed in six months, will bring pan-India reach and is expected to be cash EPS accretive
* It will expand TLNGR’s subsidiary Prag’s bottling capacity six-fold to 36 lakh cases annually within the next year
* TLNGR posted a net revenue of INR 4,091Mn, up 30.7% YoY, while EBITDA grew by 88.4% YoY to INR 945Mn, in Q1FY26
* We forecast revenue / EBITDA / PAT to grow by 46% / 32% / -31.7% for FY26E
* AAB’s Q1 growth was led by Central Province Vodka, which gained 5–6% share in Madhya Pradesh.
* Hillfort and Nicobar saw volumes of ~2,000–2,500 cases.
* AAB posted a net revenue of INR 2.7Bn, up 5.9 YoY, while EBITDA stood at 371Mn, up 32% YoY, in Q1FY26
* We forecast revenue / EBITDA / PAT to grow by 10% / 13.7% / 8.4% for FY26E
Quarterly Trend Analysis
Quarterly Trend Analysis
TLNGR led EBITDA margin, the highest in last 5 quarters
PAT margin leadership concentrated in TLNGR and UNITDSPR
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