Allied Blenders lifts premium portfolio share to 47% in two years

Allied Blenders & Distillers has increased the weight of its premium portfolio over the past two fiscal years, as prestige-and-above brands lifted their share of the company’s volume mix in India and overseas markets to 47% in 2025/26 from 37% in 2023/24, according to a Nomura report cited Tuesday by Financial Express. The change adds 10 percentage points to the mix and marks a relative increase of about 27% in the contribution of higher-end labels.

The shift is important for the Indian liquor company because it shows faster movement away from a business long associated mainly with Officer’s Choice, one of the country’s most widely consumed whiskies. Nomura began coverage of Allied Blenders with a “Buy” rating and a target price of ₹850, implying about 18% upside from the stock’s closing level on Monday, according to the report cited by the newspaper.

Nomura said volumes and sales in the company’s prestige-and-above portfolio grew at a compound annual rate of 20% between 2023/24 and 2025/26. A major driver was ICONiQ White whisky, which reached 10.7 million cases in 2025/26. The brand has become a central part of Allied Blenders’ effort to attract younger consumers and strengthen its position in higher-value categories.

The premium push is not limited to whisky. The company launched its super-premium portfolio through ABD Maestro in 2025/26, with 10 brands across whisky, gin, vodka and rum. Nomura said the group is focusing on scaling those labels through 2027/28. Allied Blenders has also entered the premium whisky segment with The Indian Edit and plans to move into deluxe vodka. A company single malt is expected in 2029, according to the brokerage note.

Even as new labels are added, Officer’s Choice remains central to the company’s economics and distribution. Nomura said the brand gives Allied Blenders a pan-India reach with about 80% penetration, a level it said is matched by only a small number of industry players. That wide network matters because it gives the company a way to place newer premium products into a market where distribution remains a major barrier to growth.

The brokerage also pointed to overseas expansion as another source of room for growth. Allied Blenders is present in 39 countries, Nomura said, which could help it take newer brands beyond India if premium demand continues to improve. That international footprint comes as India remains one of the world’s fastest-growing spirits markets, with rising income levels and changing consumer preferences supporting demand for higher-priced products.

Alongside premiumization, the company is investing in backward integration. Nomura estimated total capital expenditure at more than ₹16 billion, aimed in part at bringing more of the supply chain in-house for malt, extra neutral alcohol and polyethylene terephthalate, or PET, packaging. The brokerage said the plan should improve supply security and help lower costs over time, while also reducing dependence on outside suppliers for key inputs.

Nomura’s estimates for 2027/28 suggest the strategy could materially improve profitability if execution stays on track. The brokerage said Allied Blenders could reach a gross margin of about 48%, an EBITDA margin of 18% and return on capital employed of 23%-25% by 2027/28. Those figures are projections from the financial firm, not reported results and not confirmed company guidance.

The report said the capital spending plan is expected to be funded through a mix of internal accruals and external borrowing. Nomura added that management has maintained leverage guardrails of net debt to EBITDA below 2x and net debt to equity below 0.75x. Those limits, if maintained, would give investors some assurance that expansion will not come with a large increase in financial risk while the company builds capacity and invests in new brands.

Nomura also projected earnings per share growth of 26% a year between 2025/26 and 2028/29. At the same time, it identified two main risks to its investment case: delays in carrying out the company’s growth and integration plans, and a slower-than-expected shift by consumers toward premium products. The premium portfolio itself is broader than whisky and includes gin, vodka and rum, which means the outcome will depend on how several categories perform as Allied Blenders tries to move more of its business into higher-margin segments.