Allied Blenders surges 2% after Antique initiates "buy" coverage, sees 28% upside potential

Shares of Allied Blenders were off 1 percent from its listing price of Rs 320 apiece

Shares of Allied Blenders and Distillers surged over 2 percent to Rs 315 per share on November 14 after Antique initiated a "buy" rating on the counter and set target price at Rs 405, implying an upside potential of 28 percent from current levels.

According to analysts at Antique, Allied Blenders is accelerating its premiumisation strategy by launching new, high-quality products and forming global partnerships. This approach is not only aimed at enhancing brand appeal but also at tapping into the rapidly growing premium segment within the alcoholic beverage industry.

Moreover, with consumers increasingly opting for premium and value-added products, Allied Blenders’ focus on this market segment could drive significant revenue growth and help differentiate it in a highly competitive industry.

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One of the key strengths highlighted by Antique is Allied Blenders’ focus on backward integration, premiumisation, and cost rationalisation. Backward integration allows the company to have better control over its supply chain, reducing dependency on external suppliers and cutting costs. Alongside cost control, this strategy enhances operational efficiency, ultimately contributing to margin expansion.

Going forward, analysts expect Allied Blenders to witness a Compound Annual Growth Rate (CAGR) of 9 percent in revenue and an impressive 29 percent CAGR in EBITDA over the fiscal years 2024-2027. This growth is driven by anticipated volume and value growth of 13 percent and 15 percent, respectively in the P&A (premium and above) segment.

In the recently concluded September quarter, Allied Blenders reported over four-fold jump in consolidated net profit to Rs 47.56 crore, while revenue from operations rose 5.23 percent to Rs 2,029.10 crore during the quarter under review.

Despite this, shares of Allied Blenders were off 1 percent from its listing price of Rs 320 apiece on NSE on July 2, 2024.

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