Introduction:
In recent years, India's liquor market has expanded rapidly and is currently the third-largest alcoholic beverage market globally. As per the Indian Council for Research on International Economic Relations (1`), India’s alcohol market was estimated to be worth approximately 52.5 billion USD in 2020.
However, the industry faced substantial disruptions in production, distribution, and sales due to the impact of the COVID-19 pandemic. Nevertheless, once the initial lockdowns were lifted, there was a notable uptick in alcohol demand, resulting in a significant surge in stocks belonging to liquor companies.
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With the Indian economy set to expand further in the upcoming years, the alcohol industry may play a significant role in it. Investing in liquor stocks can hence fetch exponential returns in the long term. Below are the top liquor stocks you can consider adding to your equity portfolio in 2024:
1. Radico Khaitan Limited
Known for its flagship brand, Rampur Indian Single Malt Whisky, Radico Khaitan Limited has been making waves in the premium liquor segment. The company's commitment to quality and craftsmanship has contributed to its success. With a wide range of products, including Rampur, 8 PM Whisky, and Magic Moments Vodka, Radico Khaitan offers a diverse investment option in the liquor sector.
As of 23 February 2024, the shares of Radico Khaitan Limited were trading for Rs. 1,624.75 per share at the National Stock Exchange (NSE) and Rs. 1,624.55 per share at the Bombay Stock Exchange (BSE). The company’s market capitalisation stood at Rs. 21,721 crores.
2. United Spirits Limited
United Spirits Limited, a subsidiary of Diageo, is one of the leading players in the Indian liquor market. With a diverse portfolio of popular brands like McDowell's No. 1, Royal Challenge, and Signature, the company has maintained a strong market presence. Its focus on innovation, premiumization, and responsible drinking makes it an attractive choice for investors looking for sustained growth and stability.
As of 23 February 2024, United Spirits’ shares were trading for Rs. 1,166.05 per share at the NSE and Rs. 1,165.90 per share at the BSE. The company’s market cap stood at Rs. 84,802 crores.
3. United Breweries Limited
United Breweries is the second-largest liquor company, after United Spirits, in India in terms of market capitalisation. The company boasts a portfolio of popular beer brands and a robust distribution network spanning across India. The sustained performance of its stock and a substantial market capitalisation signifies the investors’ confidence.
As of 23 February 2024, United Breweries’ shares were trading for Rs. 1,714.90 per share at the NSE and Rs. 1,714.75 per share at the BSE. The company’s market capitalisation and return on equity (ROE) stood at Rs. 45,338 crores and 6.26%.
4. Tilaknagar Industries Limited
Tilaknagar Industries Limited has emerged as a key player in the Indian liquor market. The company has a diverse portfolio of liquor brands, such as Mansion House brandy and Courrier Napoleon brandy, and it holds a robust position in the Indian-Made Foreign Liquor (IMFL) segment. The company holds immense potential for growth and success in the future.
As of February 2024, the shares of Tilaknagar Industries Limited were trading for Rs. 227.50 per share at the NSE and Rs. 227.55 per share at the BSE. The one-year return of these shares stood at 94.90%.
5. G M Breweries Limited
GM Breweries Limited is a well-known name in the Indian liquor industry. It is worth considering for investors looking for exposure to the beer market. With a focus on regional markets and a product range that includes popular brands like King's Beer and London Export Lager, GM Breweries has carved a niche for itself. The company's strategic approach to regional dominance makes it an interesting play in the beer segment.
As of 23 February 2024, G M Breweries’ shares were trading for Rs. 630.30 per share at the NSE and Rs. 630.40 per share at the BSE. The company’s market cap stood at Rs. 1.152 crores.
To conclude
Growing at a CAGR of 7%, the Indian liquor industry presents a promising opportunity for investors in 2024. However, you must understand the associated risks and market trends before investing. You should also consider your risk appetite and investment objectives.
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