Best Liquor Stocks For Feb 2025: Tilaknagar Industries, United Spirits and More- Based on 5Y CAGR

India is one of the fastest-growing and most diverse markets for alcoholic beverages in the world. The sector has significant growth potential, driven by favourable demographics and increasing social acceptance. In recent years, the alcoholic beverage industry in India has seen impressive growth, fueled by factors like rapid urbanisation, shifting consumer preferences, a youthful population, a rising middle class with higher purchasing power, and a growing demand for premium alcoholic drinks. In this blog, we will look at the best liquor stocks for Feb 2025 based on different parameters.

Best Liquor Stock Based on 5Y CAGR

Note: The stocks have been sorted based on 5Y CAGR and as of January 30, 2024

Overview of 5 Best Liquor Stocks

1. Tilaknagar Industries Ltd

Tilaknagar Industries Ltd. is mainly involved in the manufacturing and sale of Indian Made Foreign Liquor (IMFL). The Company sells over 15 different brands of brandy, whisky, gin, rum, and vodka. During Q2 FY25, the company delivered its highest-ever EBITDA of ₹66 crore. The company’s margins expanded on the back of superior brand mix as well as cost optimization initiatives. All this despite subdued volume growth on account of the transitioning of RTM in its key state of Andhra Pradesh (AP) in Q2.

Key Metrics:

• Return on Equity (ROE): 24.6%
• Return on Capital Employed (ROCE): 22%

2. Globus Spirits Limited 

Globus Spirits Limited is involved in the manufacturing and sale of Indian Made Indian Liquor (IMIL). The company operates a current portfolio of 11 brands across Whisky, Gin, Vodka and Rum segments. It believes that profitability to improve with volume growth on the back of Same State Growth and New State Growth.

Key Metrics:

• ROE: 10.4%
• ROCE: 9.56%

3. Radico Khaitan Ltd

Radico Khaitan is one of the most recognised IMFLs. It was formerly known as Rampur Distillery Company and was focused on distillation and bottling for branded players and canteen stores of the armed forces. Radico Khaitan achieved industry-leading IMFL volume growth of 15.3% year-over-year in Q3 FY25. The company anticipate this strong momentum to continue in the near term.

Key Metrics:

• ROE: 11.3%
• ROCE: 13.2%

4. Som Distilleries & Breweries Ltd

Som Distilleries & Breweries Ltd. is one of the leading alcoholic beverages manufacturers in India involved in the manufacturing and sale of Beer and Indian Made Foreign Liquor (IMFL). The company’s overall beer capacity has increased from 30.2 to 35.2 million cases in Q3FY25 After the completion of the recent expansion in April 2024.

 Key Metrics:

• ROE: 18.4%
• ROCE: 19.4%

5. United Spirits Ltd 

United Spirits Ltd.(USL) is one of the leading beverage alcohol companies and a subsidiary of global leader Diageo PLC. It manufactures, sells, and distributes a wide portfolio of premium brands. During Q2 FY25, the company recorded a marginal rise in the profit after tax (PAT) to ₹341 crore against ₹339 crore reported in Q2 FY24. The company’s revenue from operations also witnessed a fall of ~1%.

Key Metrics:

• ROE: 21%
• ROCE: 27.9%

Best Liquor Stock Based on Net Margin

Note: The stocks have been sorted based on 5Y CAGR and as of January 30, 2024

Best Liquor Stock Based on Debt to Equity

Note: The stocks have been sorted based on 5Y CAGR and as of January 30, 2024

What are Liquor Stocks?

Liquor stocks refer to shares of companies that are involved in the production, distribution, or retail of alcoholic beverages. These can include businesses that produce spirits, beer, wine, or other alcoholic drinks. Companies in this sector might be large multinational corporations, smaller craft breweries or distilleries, or retailers who sell these products. Investing in liquor stocks allows individuals to own a piece of these companies and potentially benefit from their profits, especially as the demand for alcohol continues to grow in various markets.

Alcoholic Beverages Industry in India

India’s alcohol industry is projected to reach a value of US$ 55,840 million by 2024, with sales expected to grow at a 7.2% CAGR throughout the forecast period, reaching US$ 112,338.9 million by 2034. The growing demand for premium and imported brands, alongside the rising popularity of craft spirits and microbreweries, is anticipated to drive the expansion of the sector. Furthermore, the increasing appeal of experiential drinking venues that cater to diverse consumer preferences is expected to further boost alcohol sales in the country.

Conclusion

Investing in liquor stocks presents considerable opportunities, especially as the industry thrives on increasing consumer demand, the shift toward premium products, and the emergence of new drinking experiences. However, potential investors should be mindful of the volatility that can come with this sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities market are subject to market risks, read all the related documents carefully before investing.