Results preview: Alcobev industry growth may have cooled in Q3FY26

India’s liquor industry is expected to enter a phase of moderation in the third quarter of the financial year 2026 (Q3FY26), after four consecutive quarters of double-digit growth. Brokerages tracking spirits, beer and wine companies expect revenue growth to moderate to mid-single digits in Q3.  

JM Financial estimates revenue growth of the industry at about 6.2 per cent year-on-year (Y-o-Y) in the quarter, a sharp decline from the strong momentum seen over the past year. Raw material costs remained stable to benign in the quarter and its expects gross margins to improve across players.  

“As per our market checks, grain prices have eased to ₹22-23 which helps widen the gap between ‘make and buy’ to ₹10-11 per litre of ENA (extra neutral alcohol). Rice and maize prices have eased, leading to a better margin setting for captive users,” Emkay wrote in its report.  

It also noted that Maharashtra Made Liquor (MML) policy continues to influence the performance of IMFL (Indian-made foreign liquor) players. 

“New launches are leading to gradual acceptance of consumers; notably, downward trends have been observed,” it said.  

Choice Institutional Equities said in its report that festival and premium launches will drive P&A (prestige and above) volume among our coverage universe and expects P&A volume to grow in mid-to-high teens. 

JM Financials said in its report, “Going forward, excise duty changes (if any) in upcoming state budgets, Maharashtra policy impact (particularly for United Spirits) and pace of volume recovery for United Breweries are the key variables to monitor. Radico Khaitan remains our preferred pick across alcoholic beverages.”  

On United Spirits, the brokerage said that it estimated sales growth of 6 per cent Y-o-Y and moderation versus the first half of the financial year trend due to high base. 

“The popular segment is likely to suffer a mid-single-digit decline in sales. While stable input costs and productivity initiatives shall aid gross margins Y-o-Y, challenges in Maharashtra (a better-margin state), higher A&P (advertising and promotion) and scale,” it said on the company.  

On Allied Blenders Distillers, JM Financials said it forecasts sales growth would be 5.6 per cent Y-o-Y with low single digit volume growth. 

On Radico Khaitan, Emkay said that the company is likely to sustain relative outperformance, with a high teen topline growth, where market-share gains in Andhra Pradesh (AP) are likely to reflect in the better volumes in popular segments. 

It also said that in low-alcohol beverages, Emkay expects to see a low single-digit revenue growth for United Breweries and flat sales for Sula Vineyards.  

Choice Institutional Equities said in its report that Uttar Pradesh, Karnataka and Punjab offer support through higher excise duty collection (over 10 per cent to 14 per cent Y-o-Y), while Maharashtra and Telangana markets continue to struggle because of policies which are affecting market structure and growth.