New launches, premium push to power Allied Blenders growth: Nuvama

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• Nuvama retains 'buy' rating on Allied Blenders, target Rs 670
• Premium brands and exports expected to drive growth by FY28
• Gross margins up, EBITDA margin target 17–18 percent by FY28

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Shares of Allied Blenders and Distillers Ltd are expected to benefit from a continued shift toward premium products and new launches, supporting growth momentum, according to Nuvama Institutional Equities.

It retained its ‘buy’ rating on Allied Blenders and Distillers Ltd and maintained an unchanged target price of Rs 670.

The brokerage said the company’s premium and above (P&A) portfolio is likely to increase to about 50 percent of the mix by FY28, from 47 percent in the first nine months of FY26, supporting structural growth.

Nuvama expects a recovery in the near term after a weak third quarter, which was impacted by regulatory disruptions in Telangana and Maharashtra. Telangana has started normalising from the beginning of the fourth quarter, while weakness in Maharashtra has largely been factored in. The brokerage expects Q4 to rebound with double-digit growth.

The report highlighted that ABD Maestro, a joint venture between Allied Blenders and actor Ranveer Singh, is gaining traction and is now present in about 85 percent of the addressable market. The company has launched multiple new products across vodka and premium whisky segments, including luxury offerings, and expanded its travel retail presence across airports in Delhi, Bengaluru and Mumbai. Allied Blenders aims to double Maestro’s annual run rate to Rs 800 million by the end of Q4FY26.

Premium brands continue to drive growth, with ICONiQ White expected to cross 10 million cases in FY26, compared with 5.7 million cases in FY25. Sterling Reserve has regained traction, while Golden Mist has scaled up in key southern markets.

Exports are also growing steadily, with the company present in 31 countries and international business contributing about 8 percent of revenue. This share is expected to increase to 10–12 percent over the next few years, supported by expansion across Latin America, Europe, North America and Southeast Asia, along with scaling up of brands such as ICONiQ White, Arthaus and Zoya Gin.

Nuvama noted that state-level trends remain mixed, with Telangana expected to normalise and Maharashtra continuing to face policy-related challenges. However, stronger growth in other states, including Uttar Pradesh, and potential reforms in Karnataka could help offset these headwinds.

On the margin front, the brokerage said a favourable raw material basket, including stable extra neutral alcohol and grain prices, along with backward integration, is supporting profitability. Gross margins expanded 351 basis points year-on-year to 46.3 percent in Q3, while the company is targeting EBITDA margins of 17–18 percent by FY28, up from 13.2 percent in the first nine months of FY26.

Nuvama added that the India-UK free trade agreement could provide an additional 200 basis points upside to margins over time, with implementation expected around Q2FY27. The report, however, noted that prolonged geopolitical tensions could pose near-term risks to raw material and packaging costs.