Realty Sector Update : Growth in a Slow Quarter: Pouring Off Monsoon Blues by Choice Institutional Equities
Executive Summary
* Q2FY26 was a slow quarter, with one of the largest states Maharashtra facing a 20–25% decline in volumes over Excise Duty hike. The Duty was hiked for IMFL, Country Liquor and Imported Spirits.
* States with modern policies, such as Uttar Pradesh & Telangana continued to see their markets shine with increased preference for national liquor companies to state-specific ones.
* While volumes expanded, realisation remained under check.
* Q2FY26 saw a benign raw material pricing environment, with coverage companies sustaining their margin on both, QoQ as well as YoY, levels. A decline in allocation towards production of Ethanol is likely to cause muted RM inflation.
* We expect Q3FY26E growth to be robust, triggered by a long and early festive season, new launches and GST rate cut spillover consumption.
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