India-EU trade deal: Why IFB Agro, Sula Vineyards, United Spirits & other brewery stocks declined

Shares of select beverage companies, both alcoholic and non-alcoholic, came under selling pressure on Tuesday as investors assessed the potential implications of the recently concluded India-European Union (EU) trade agreement. Several stocks in the segment recorded notable declines during the session.

IFB Agro Industries Ltd slipped 5 per cent, while Winsome Breweries Ltd fell 5.04 per cent and Fratelli Vineyards Ltd declined 4.64 per cent. Sula Vineyards Ltd dropped 3.40 per cent. United Spirits Ltd ended 1.58 per cent lower, Radico Khaitan Ltd declined 1.55 per cent and United Breweries Ltd settled 1.38 per cent down.

In the non-alcoholic space, Orient Beverages Ltd slipped 3.16 per cent, while Varun Beverages Ltd (PepsiCo franchisee operator) declined 0.59 per cent.

Commenting on the development, Kranthi Bathini, Director – Equity Strategy at WealthMills Securities, said, "At present, the near-term impact of India-EU trade deal on breweries will be neutral by and large as tariffs are implemented in a phased manner. But going ahead, there would be stiff competition. Some European companies can start their operations in India, which will be a positive for consumers."

With that being said, he added that the impact on beverages will be negligible.

Separately, Vinod Nair, Head of Research at Geojit Investments, said beverage stocks declined during the session due to concerns over rising competitive pressures.

India and the EU recently concluded negotiations on the trade agreement, with Prime Minister Narendra Modi and European Commission President Ursula von der Leyen formally sealing the pact.