Allied Blenders and Distillers is strategically pivoting toward premium customers as mass market consumption slows across the alcoholic beverages sector. The company launched ABD Maestro, a premium and luxury spirits subsidiary in March in partnership with actor Ranveer Singh, which is expected to close FY26 with ₹100 crore annualized run rate (ARR) and aims to double to ₹200 crore in FY27, according to Managing Director Alok Gupta. ABD Maestro has already crossed ₹40 crore in annualized revenue, housing premium brands including small batch gin brands Zoya and Pumori, vodka brand Rangeela, and newly launched whiskey Yello. The strategic shift comes as tax hikes in major states and middle-class consumption slowdown hurt mass alcohol brands that were traditionally the industry's strength, as reported by Mint.
Allied Blenders and Distillers faces a significant milestone as its lock-in period expires on January 2, affecting approximately 55.9 million shares representing 20% of the company's outstanding equity. At current market prices, these shares carry an estimated value of nearly ₹3,355 crore, according to recent market data. The stock has been under pressure, dropping 16.44% over the last 11 trading sessions since December 23. The expiry does not automatically mean all these shares will be sold in the open market, as it simply makes these shares eligible for trading, providing shareholders with the option to trade if they choose.
The company's flagship Officers' Choice brand has experienced significant volume decline, dropping from 9 million cases in FY19 to 3.6 million in FY25, according to JM Financial estimates. However, Allied Blenders has maintained focus on profitability, with Gupta emphasizing the company's commitment to maintaining a gross margin of over 40% on Officers' Choice, equal to any Prestige & Above brand. The company has strategically exited certain markets and channels, including CSD (canteen stores department) and Uttarakhand, to preserve margins. To counter mass market stagnation, Allied Blenders launched Iconiq White Whiskey in September 2022, which delivered exceptional performance with 5.7 million cases in FY25, becoming the fastest-growing spirit brand globally, as reported by JM Financial.
The Prestige & Above (P&A) portfolio has shown strong momentum, with volumes increasing 8.4% YoY to 9.0 million cases in Q2 FY26 versus 8.3 million cases in Q2 FY25. P&A volume salience improved to 47.1% in Q2 FY26, up from 46.2% in Q1 FY26 and significantly higher than 39.7% in Q2 FY25. According to latest data, Prestige & Above segments now account for just over 46% in volume in the first half of FY26, up from just over 37% in FY24, as reported by Mint. Value salience also strengthened to 56.9%, compared with 55.8% in the previous quarter and 49.0% a year ago, with growth driven by sustained demand across regions and healthy traction in key brands.
Allied Blenders is making substantial investments in expanding its production capabilities, investing ₹525 crore to expand capacity during the FY25-27 period. The company spent ₹72 crore to acquire an extra neutral alcohol plant in Maharashtra's Aurangabad in FY25, which is expected to be fully operational by FY27. Additionally, the company is investing ₹75 crore in setting up a single malt whiskey plant in Rangapur, Telangana, and will launch its first single malt whiskey in 2029, according to information provided to analysts in late 2024. These investments align with the company's strategy to build curated products for premium Indian customers who are shifting from imported alcohol to high-end domestically produced spirits.
Allied Blenders and Distillers reported robust performance in the second quarter with net profit rising 35.2% year-on-year to ₹64.31 crore, compared with ₹47.56 crore in Q2 FY25. Revenue from operations (excluding excise duty) grew 10.9% YoY to ₹962.53 crore during the quarter. EBITDA for Q2 FY26 stood at ₹130 crore, registering robust growth of 23.6% over ₹105 crore in Q2 FY25. EBITDA margin expanded by 100 basis points to 13.1%, compared with 12.1% in the corresponding quarter last year. Despite recent stock pressure, Allied Blenders shares have grown over 24% in the last year compared to over 10% growth in the benchmark Nifty 50 index, though trailing rival Radico Khaitan's 29% growth, as reported by Mint.
