Indian Economy News

Alcobev manufacturers in India to see 8-10% revenue growth in FY26: CRISIL

India’s alcoholic beverage (alcobev) industry is projected to record an 8–10% revenue growth in FY26, reaching Rs. 5,30,000 crore (US$ 61.97 billion), according to a report by CRISIL Ratings. This builds on a compound annual growth rate (CAGR) of 13% over the previous three financial years. Operating profitability is expected to improve by 60–80 basis points (bps), supported by premiumisation and the absence of large debt-funded capital expenditure. A study of 25 liquor companies, contributing 12% of the organised industry’s revenue, indicates spirits account for 65–70% of total revenue, with the rest from beer, wine, and country liquor. Volume growth of 5–6% is forecast, driven by urbanisation, a growing drinking population, and rising disposable income.
Premium and luxury spirits priced above Rs. 1,000 (US$ 11.69) per 750 ml are expected to grow 15% in FY26, raising their contribution to 38–40% of total spirits revenue, up from 31–33% in FY23. Higher realisations and volume growth will support profitability despite marginal input cost increases. Extra Neutral Alcohol (ENA) and barley, the main raw materials for spirits and beer, comprise 60–65% of total input costs. ENA prices may rise 2–3% due to increased demand from the ethanol blending programme, while barley prices are expected to increase 3–4%. Glass bottle prices will stay firm due to steady supply and strong demand. With capacity utilisation at 70–75%, no major debt-funded capex is expected. Blended operating margins are projected to rise by 60–80 bps. CRISIL expects strong credit metrics across the sector, with interest coverage ratios at 21 times in FY26, reflecting solid financial health.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.