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Indian Alcoholic Beverage Market Trends

The document discusses the valuation outlook for the Indian alcoholic beverage industry, predicting modest volume growth but significant revenue increases driven by price hikes and premiumization. It also highlights the resilience of the defense sector during economic downturns, emphasizing stable long-term sales despite long lead times on contracts. Additionally, it covers the aerospace and transportation industries, noting their dependence on economic growth and key performance metrics for airlines, such as Available Seat Miles and Load Factor.

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6 views2 pages

Indian Alcoholic Beverage Market Trends

The document discusses the valuation outlook for the Indian alcoholic beverage industry, predicting modest volume growth but significant revenue increases driven by price hikes and premiumization. It also highlights the resilience of the defense sector during economic downturns, emphasizing stable long-term sales despite long lead times on contracts. Additionally, it covers the aerospace and transportation industries, noting their dependence on economic growth and key performance metrics for airlines, such as Available Seat Miles and Load Factor.

Uploaded by

gaura.guptaa
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Valuation guide

Alcohol

Developing – premiumization and developed – flat, no alcohol


Beer& wine - volume, spirits - price, no alcohol - volume

 ICRA forecasts the Indian alcoholic beverage (alcobev) industry to register a


volume growth of around 1-2% in FY2026. The beer segment volumes are
projected to grow by around 4-6% due to steady demand, while the spirits
(IMFL and CL) segment volume may see a similar decline, attributed to
relatively higher taxation and increased selling prices. ICRA expects its
sample set of Indian alcobev companies to register a revenue growth of 10–
12% in FY2026, driven by increase in the selling prices approved by various
state governments and a shift in product mix to high value products, even
though the volume growth is projected to remain modest.
 In FY2025, spirits volumes had witnessed around 2% decline, following a
similar 3% drop in FY2024. This was primarily due to price increases driven
by significantly higher taxes imposed by certain state governments,
inflationary pressures, and a growing consumer shift towards premium
products. In contrast, beer consumption saw a year-on-year volume growth of
around 3% in FY2025, outperforming spirits.

Defense – is recession-resistant and arguably even countercyclical. It


tends to outperform in bear markets, unlike almost everything else in
industrials.

That’s because product demand depends on government spending, which


doesn’t necessarily follow business cycles; it’s tied to military and wartime
needs.
The disadvantage is that government contracts have very, very, very long
lead times
A Defense company is unlikely to delivery an amazing quarter of surprise
revenue growth, but its sales are often stable over the long term.
the types of contracted projects in the backlog, such as fixed-price vs.
time-and-materials vs. cost-reimbursable, matter a lot.

Aerospace - companies depend on growth in air travel, airline


profitability, and the need to upgrade and replace older planes.

Research & development is incredibly risky because if a company


“guesses wrong” about what the market wants, it could suffer for years or
decades.
Key metrics include the order backlog, capacity utilization, passenger
traffic, and the growth of new airline routes.

Transportation
These companies benefit from strong economic growth and global trade,
and they’re hurt by lower growth expectation, falling trade volumes, and
higher oil prices.

Shipping companies are driven by the demand for food, commodities, oil,
and petrochemicals, and trucking and rail companies often transport
commodities and basic materials.

For these companies, key metrics include the average length of haul, the
average age of the fleet, and fleet utilization.

Airlines
Available Seat Miles are like an airline’s “total capacity.”

If it has 10 planes that each fly 2,000 miles per day, and each plane has
300 seats, then the daily ASM are 10 * 2,000 * 300 = 6 million, and the
annual ASM are 6 million * 365 = 2.2 billion.

The Load Factor tells you the percentage of seats that are occupied, and
Revenue Passenger Miles = Available Seat Miles * Load Factor.

So, if this airline’s Load Factor is 85%, Revenue Passenger Miles = 2.2
billion * 85% = 1.9 billion.

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