Jefferies has initiated coverage on India’s spirits sector with a bullish stance, highlighting strong premiumisation-led growth and margin expansion opportunities. The brokerage expects the category to deliver double-digit CAGR, supported by rising consumer preference for premium brands.
It initiated buy ratings on Radico Khaitan with a target price of ₹3,500, calling it the top pick with an EPS CAGR outlook of more than 35%, United Spirits at ₹1,570, citing attractive risk-reward after a 20% stock correction, and Allied Blenders and Distillers at ₹620, while flagging higher execution risks for the latter.
Jefferies said the sector remains well positioned to deliver superior growth as premiumisation accelerates across urban and semi-urban markets. However, it also warned of risks from adverse state regulations, weaker consumer demand, and commodity inflation. Overall, it expects the leading players to sustain earnings momentum, with Radico positioned to outperform peers.
Disclaimer: The views and recommendations made in this article are those of Jefferies. This article does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions.
