JM Financial bullish on 3 alcohol stocks, sees up to 18% upside; here’s why

Brokerage firm JM Financial has retained a positive outlook on the Indian alcoholic beverages sector, projecting revenue growth of 9.5 per cent in Q2 FY26. In a recent note, the firm highlighted that spirits makers are likely to outperform the beer segment, with Radico Khaitan emerging as its preferred stock.

The brokerage expects a largely stable input-cost environment to support margins, while strong sales and operating leverage could drive expansion for select players. “We expect our alcoholic beverage coverage universe revenue to grow by 9.5 per cent in 2QFY26, faster than HPC staples and some of the large F&B players,” JM Financial said.

Stock-wise outlook:

Radico Khaitan | Buy | Target: Rs 3,515

JM Financial has a “Buy” rating on Radico Khaitan, with a target price implying 18 per cent upside from the current market price of Rs 2,975.65. The brokerage expects strong Q2FY26 sales growth of 26.1 per cent YoY, led by its key markets of Uttar Pradesh and Andhra Pradesh benefiting from a “favourable regulatory environment.” EBITDA is projected to grow 31.4 per cent YoY, while PAT could surge 47.4 per cent, described as “best-in-class growth” within its consumer coverage universe.

United Spirits | Add | Target: Rs 1,475
For United Spirits, JM Financial has an “Add” rating with a target price of Rs 1,475, indicating 10.6 per cent upside from Rs 1,332.50. Sales are expected to rise around 7 per cent YoY, aided by a soft base and market developments in Andhra Pradesh. However, growth may be partially offset by regulatory headwinds in Maharashtra. The brokerage forecasts 8 per cent growth in the ‘Prestige & Above’ segment and an overall EBITDA increase of 5.9 per cent.

United Breweries | Add | Target: Rs 1,990
United Breweries also carries an “Add” rating, with a target price of Rs 1,990, implying 12.1 per cent upside from Rs 1,774.90. The beer maker is likely to report a soft quarter, with sales growth moderating to 4 per cent YoY. Volumes are expected to remain flat due to adverse monsoons and regulatory challenges in Karnataka. EBITDA may decline 4.4 per cent, while PAT could fall 13 per cent YoY. JM Financial notes that margin expansion will be a key monitorable for the company going forward.