Allied Blenders shares: Key reasons why Choice sees 12% upside on the stock

Allied Blenders & Distillers Ltd (ABDL) shares may have further room to rally, with brokerage Choice Institutional Equities maintaining its “Add” rating and setting a target price of Rs 590. At the current market price of Rs 530, the brokerage expects a total return of about 12 per cent.

The optimism comes on the back of ABDL’s backward integration strategy, highlighted by the commissioning of its PET plant at the Rangapur Integrated Manufacturing Facility. The plant, which can churn out 600 million bottles annually, is expected to generate annual cost savings of nearly Rs 300 crore. “We have already baked in the margin improvement from the commissioning of the PET Plant. We estimate these savings to be Rs 30 crore per year,” the brokerage said

Choice projects a 15 per cent revenue CAGR over FY25–FY28, driven by improved supply chain efficiencies and capacity expansion. The brokerage expects EBITDA margins to expand to 14.9 per cent by FY28, translating into a net income CAGR of nearly 32 per cent. 

The Rangapur facility, located near the Krishna river, integrates extra neutral alcohol (ENA) distillation, bottling and PET manufacturing. Currently, it produces popular brands including Officer’s Choice Whisky, ICONIQ White, and Sterling Reserve B7. The plant churns out 0.7–0.8 million cases of alcoholic beverages every month

Further integration is in the pipeline. ABDL is setting up a 4 MLPA malt plant, slated to go live in Q4FY26, which will meet most of its malt requirements. The company has also hinted at developing its own single malt, although that will only materialise by FY29, given the mandatory three-year ageing cycle

Key risks flagged by Choice include potential delays in plant commissioning, slower-than-expected traction for new launches, and working capital pressures.