Spirits Soar: India's Alcobev Sector on Growth Path

India's alcoholic beverage firms anticipate an 8-10% revenue growth this fiscal year, driven by a revival in spirit consumption and premiumisation. Despite stable profit margins, supported by lower packaging costs, capex will moderate as companies have recently increased capacities.

India's alcoholic beverage sector is poised for significant growth, with an expected revenue increase of 8-10% in the current financial year. This upswing is attributed to rising spirit consumption and a trend towards premium offerings, as detailed in a report by ICRA, a leading rating agency.

Notably, the industry's operating profit margin is predicted to stabilize between 12-13% for FY2025. This is despite fluctuations in raw materials, including higher grain prices, as costs for packaging materials decline.

The period also saw investment in production capacities, with firms spending over Rs 1,000 crore in FY2023 and FY2024. However, spending is set to moderate, reflecting the recent enhancement of manufacturing infrastructure.