However, in the following three to four years, this will climb to 40%.
Among the reasons include changes in social drinking habits among younger generations, economic levels, and government laws suited to the sector.
Moving on to individual companies.
Despite the fact that the alcohol industry comprises approximately 15 publicly traded businesses,
We only have five large-cap stocks, as well as mid-caps and small-caps.
Others are referred to as micro-capital.
Globus Spirits and Sula Vineyards are small-cap firms, while United Spirits and United Breweries are large-cap companies. Radico Khaitan is a mid-cap company, and Globus Spirits and Sula Vineyards are small-cap companies.
The key performance indicators (KPIs) for this industry are straightforward.
In general, KPIs in the consumer retail industry are relatively simple.
You examine sales to determine how much increase there is and whether that growth is volume-led or price-led.
We would like to see the company be able to improve its volume and price year after year.
Then we’ll look at profit margins at three different levels: gross profit, Ebitda, and net profit.
Then we look at cash flow, namely working capital movement, capex, and interest payments, to compute our free cash flow.
You check sales to see how much they have increased and whether the rise is due to volume or price.
We’d like to see the company enhance its volume and pricing year after year.
Then we’ll examine profit margins at three levels: gross profit, Ebitda, and net profit.
Then, to compute our free cash flow, we look at cash flow, namely working capital movement, capex, and interest payments.
Finally, we’ll look at the balance sheet’s net debt and liquidity.
You may be wondering about valuation and share price.
Yes, they will see, but where do you have a choice with five listed players, in my opinion?
To begin, consider United Spirits, India’s largest alcoholic beverage corporation.
USL accounts for one in every three bottles sold in the country, accounting for a 33% volume share.
This company sells 80 million cases each year through 80 different labels.
A case is a carton with 12 bottles inside.
USL’s product line is also quite diversified.
Except for beer, they sell almost every type of alcoholic beverage, including whisky, brandy, rum, vodka, gin, and wine.
Among the USL brands are Royal Challenge, Signature, Antiquity, Black Dog, Director’s Special, Bagpiper, and Hayward.
Some of these brands are so popular that they sell 10 lakh cases each year, while others sell one crore.
McDowell No. 1, India’s and the world’s most popular spirits brand, is the brand’s moniker.