Alcoholic beverages stocks: Jefferies on price targets of Radico Khaitan, Allied Blenders, United Spirits 

India's alcoholic beverages sector has emerged as one of the strongest-performing segments within the consumer space over the past few years. Between FY23 and FY26, listed liquor companies delivered earnings growth of more than 30% CAGR, significantly outperforming the broader staples sector, where profit growth remained in the mid-to-high single digits.

Among the liquor stocks, Radico Khaitan shares have emerged as the top pick of global brokerage Jefferies. 

Jefferies assigned a price target of Rs 4500 on the stock based on 60x Jun'28e EPS.

The brokerage said Radico has been an outperformer in the spirits industry and become a credible challenger to market leaders, driven by strong innovation in niche - high-growth, high- margin categories (vodka, gin, Indian malts). The company's superior execution and brand-building capabilities support 22% EPS CAGR over FY26-29e, justifying its premium valuation of 62x 1yr fwd PE. 

On Allied Blenders, Jefferies assigned a buy call with a target price of Rs 780, a 25% upside from current market price of Rs 624. 

United Spirits shares have a hold call from Jefferies with a price target of Rs 1560, an upside of 13% from the current market price of Rs 1385. 

The country's alcoholic beverages industry is currently among the fastest-growing globally, supported by favourable long-term demographics and rising consumer spending. A rapidly expanding young population, more than 100 million people entering the legal drinking age over the next five years, and improving affordability continue to fuel demand. At the same time, premiumisation remains the industry's biggest growth engine.

The Prestige & Above (P&A) category is expected to lead the next phase of expansion. Although premium brands account for only around 10% of total industry volumes, they contribute more than 40% of sector profits, highlighting the significant headroom for consumers to shift toward higher-priced offerings. Analysts expect the P&A segment to record volume growth of around 12%, more than double the estimated 5% growth for the overall industry.

Among leading players, Radico Khaitan and Allied Blenders & Distillers have gained market share through consistent product innovation, premium brand launches, and strong execution. 

Between FY22 and FY26, both companies recorded premium segment volume growth of 14-21% CAGR, comfortably outperforming larger rivals such as United Spirits and Pernod Ricard, whose premium portfolios expanded at a slower 2-6% CAGR. While United Spirits and Pernod continued to see healthy demand in the mid-premium category, softer performance in their lower-prestige portfolios weighed on overall growth.

Radico Khaitan and Allied Blenders & Distillers are expected to sustain their momentum. With premium products still contributing less than half of their sales, both companies have significant room to improve product mix, with premium portfolio volumes projected to grow at 18% and 14% CAGR, respectively, during FY26-FY29. By comparison, United Spirits, where premium brands already account for nearly 85% of volumes, is expected to deliver a relatively moderate 6% CAGR.

Profitability across the industry has also improved materially. After years of margin pressure caused by volatile input costs—including extra neutral alcohol (ENA), glass packaging, and state-controlled pricing—operating margins expanded by around 4-7 percentage points between FY23 and FY26. The improvement was driven by a richer product mix and easing raw material costs.

Going forward, the industry's margin profile is expected to strengthen further. Continued premiumisation, greater backward integration by manufacturers, and potential cost benefits arising from the UK-India Free Trade Agreement are likely to support sustained profitability. Although competition in the premium segment is intensifying, the low penetration of premium alcoholic beverages in India leaves ample room for long-term volume growth, richer product mix, and further margin expansion across the sector.