The alcoholic beverage companies are set to see an 8 to 10 percent growth in their revenue in the financial year 2026, says a report by Crisil Ratings. While the companies’ revenue is expected to show good growth, profits remain a concern.
In the past three years, the alcobev industry revenue has grown at a compounded rate of 13 percent. According to Crisil, this momentum is expected to continue in FY26 as the sector is expected to clock a revenue of Rs 5.3 lakh crore.
ALSO READMid-tier IT firms outpace larger rivals in deal wins & execution
Premiumisation is key
These companies are focusing on product premiumisation to increase their profit margins. As per the Crisil Ratings report, the revenue from premium alcobev products is expected to grow by 15 percent in FY26.
Jayashree Nandakumar, Director, Crisil Ratings, says, “Revenue from premium and luxury segments, priced at over Rs 1,000 per 750 ml, is expected to grow by 15 percent. The contribution from these segments will rise to 38-40% of spirits revenue this fiscal compared with 31-33% in FY23.”
Demand and cost factors
The alcobev sector is forecasted to see a modest 5 to 6 percent growth in demand in FY26. The increase in demand is based on the addition of a new drinking population, urbanization, and a rise in disposable income.
Along with the demand growth, the cost of materials is also expected to increase by about 3 percent. The cost of extra neutral alcohol (ENA) and barley, the two key components in the raw material of spirits and beer, are expected to rise by 2-3 percent and 3-4 percent, respectively.
However, the cost of packaging material and bottles is expected to remain steady in FY26.
Capacity expansion
The Crisil Ratings says that in the past two years, there has been a 15 to 20% capacity expansion in the alcobev industry. The industry is currently operating at 70-75 percent of production capacity, leaving enough room to accommodate any increase in demand.
The report says that in FY26, there is no major debt-funded capital expenditure in the alcoholic beverage sector.
» Read More
