UBL to Radico Khaitan: Alcohol stocks decline after excise duty hike report

United Spirits and Allied Blenders led a selloff in alcohol beverage makers on reports that the Maharashtra government approved a hike in excise duty

Shares of Indian alcohol beverage makers plunged in Wednesday's trade on reports that the Maharashtra government approved a hike in excise duty.  

Allied Blenders & Distillers shares fell as much as 6.2 per cent while United Spirits tumbled 6.19 per cent during market opening. Shares of Radico Khaitan and United Breweries fell 3.04 per cent and 1.55 per cent, respectively. Tilaknagar Industries shares were lower by 1.92 per cent. 

 

As of 10:00 AM, Allied Blenders shares were down 2.55 per cent and United Spirits was lower by 6 per cent, compared to a 0.13 per cent rise in the benchmark Nifty50.   Track LIVE Stock Market Updates Here

Maharashtra hikes excise duty on IMFL 

The government of Maharashtra approved a hike in excise duty on Indian Made Foreign Liquor (IMFL), country liquor, and imported alcohol, according to a report by The Indian Express. To expand the state’s revenue base, the government also cleared the introduction of a new category, Maharashtra Made Liquor (MML).

 

The tax on India-made foreign liquor have increased by 50 per cent from three times the manufacturing cost to 4.5 times. The duty on country liquor has also gone up from ₹180 to ₹205 per proof litre.

 

Maharashtra, the home of India's financial centre, Mumbai, is one of the biggest markets for alcohol. The state consumes about 10 per cent of IMFL volumes of India and is likely to be around 20 per cent for United Spirits, according to reports. 

 

Karnataka currently levies the highest liquor taxes in the country, with an 83 per cent cess on the actual price. 

Maharashtra Made Liquor introduced

The newly announced Maharashtra Made Liquor (MML) category aims to fill the pricing gap between country liquor and IMFL, the report said. This will be made from grain-based alcohol, and only products manufactured and registered within the state will qualify for this category. 

 

MML will have a country liquor tax structure, but will only be sold through FL-2 and FL-3 licensees. This could potentially generate up to ₹3,000 crore in additional revenue.

Alcohol companies' Q4 results 

Radico Khaitan reported higher fourth-quarter profit on Tuesday, driven by strong demand for premium products. It reported a 71 per cent rise in consolidated net profit at ₹92 crore for the three months ended March 31. Radico's sales from its premium brands, which contributed to 63 per cent of overall revenue, increased 22 per cent in the quarter.

 

United Breweries Ltd on Wednesday reported a 19.87 per cent rise in its consolidated net profit to ₹97.76 crore in the January-March quarter. Meanwhile, Allied Blenders and Distillers' consolidated net revenue grew 20 per cent year-on-year (Y-o-Y) to ₹920.6 crore in the March 2025 quarter (Q4FY25), driven by 20.8 per cent volume growth to 8.5 million cases.