Nomura has initiated coverage on Allied Blenders & Distillers with a Buy rating and a target price of ₹850, implying an upside of nearly 20% from the current market price of ₹722.60. According to reports from The Economic Times, the brokerage sees premiumisation, backward integration and margin expansion as key growth drivers, with EPS expected to grow at a 26% CAGR over FY26–FY29. The stock was trading 1.03% higher with an intraday high of ₹739 and low of ₹720.50, though volumes were 33.09% below the five-day average at 144,438 shares.
Allied Blenders is looking to move beyond its traditional image as an Officer's Choice-led liquor company, with its strategy focusing on steering consumers towards higher-priced brands while gaining greater control over its production. As reported by The Economic Times, a key growth driver has been ICONiQ White, which sold 10.7 million cases in FY26. The company has launched ABD Maestro in FY26, with 10 brands across whisky, gin, vodka and rum, and is focused on scaling them through FY27-28E. P&A's contribution increased from 37% to 47% over FY24-26, with P&A volumes and sales recording a 20% CAGR over FY24-26. The company has also entered premium whisky with The Indian Edit and plans to enter deluxe vodka, while its own single malt is expected in 2029.
The company is implementing significant backward integration strategies, with ENA (Ethyl Acetate) being a key raw material for its whisky portfolio. According to The Economic Times, Allied Blenders currently meets 33% of its ENA requirements through captive production and aims to take this to 100% through capacity additions in Aurangabad and Moradabad. The strategy is already yielding results, with gross margins rising from 37% in FY24 to 45.6% in FY26, while EBITDA margins expanded from 7.3% to 13.8%. Nomura expects further improvement as new capacity comes on stream, with EBITDA margin expansion of 370 bps expected over FY26-29. The company has a capex plan of more than ₹16 billion, which Nomura expects to improve supply security and drive structural cost efficiency.
Amar Sinha took over as managing director in June 2026, succeeding Alok Gupta, with a focus on profitable volume growth, premiumisation, cost optimisation and backward integration. As reported by The Economic Times, Nomura forecasts a 26% CAGR in EPS over FY26–FY29 and values the stock at 48 times September 2028 earnings, at the lower end of sector average. The brokerage identifies execution delays and a slower shift towards premium products as key risks to the investment thesis. Officer's Choice remains a strong core franchise, providing pan-India distribution with 80% penetration, while ABDL's presence across 39 countries offers scope to take newer brands global.
