ICICI Securities research report on Allied Blenders and Distillers Limited
Allied Blenders and Distillers (ABD) is well positioned to capture premiumisation trend in alco-beverages industry via new product launches in P&A segment (ICONiQ White Whisky to double its volume YoY in FY25; launches in premium and luxury segments to drive realisation growth). Further, it has plans to drive profitable growth in Officer’s Choice Whisky by focus on improving state brand mix. Additionally, backward integration towards own ENA manufacturing, premiumisation and operating leverage may drive operating margin expansion (~170bps over FY25-27E). We model revenue / EBITDA CAGR of 10%/30% over FY24-27E.
Outlook
Initiate coverage with BUY with a DCF-based TP of INR 400. Key risks: (1) Potential ban or regulatory change in key states and (2) failure in scale-up of Prestige & Above (P&A) segment.
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