Nomura’s new stance on Allied Blenders Nomura Securities has opened coverage on Allied Blenders & Distillers Ltd (ABDL), issuing a **Buy** recommendation and a **target price of Rs 850** per share. The broker values ABDL at **48 times** its projected September‑2028 earnings per share, placing the stock at the lower end of the Indian spirits sector multiple.
Drivers of growth ### Premiumisation and portfolio shift Nomura notes that ABDL is moving beyond its mass‑premium flagship, Officer’s Choice (OC), toward a **Prestige & Above (P&A)** positioning. The P&A segment’s share of total volumes rose from **37 % to 47 %** between FY24 and FY26 and is slated to reach **50 % by FY28**. A key contributor is **ICONiQ White whisky**, which is forecast to reach **10.7 million cases in FY26**, underpinning a **20 % CAGR** in P&A volumes and sales.
### New brand launches The company introduced **ABD Maestro** in FY26, a collection of ten brands spanning whisky, gin, vodka and rum. It has also entered the premium whisky space with **The Indian Edit**, plans a **deluxe vodka** offering, and aims to launch its own **single‑malt whisky by 2029**. Nomura expects these newer premium labels to fuel the next growth leg.
### Backward integration and capex ABDL is committing **over Rs 16 billion** to backward‑integration projects covering **malt, ENA (ethyl‑neutral alcohol) and PET packaging**. The investment is intended to secure raw‑material supply, improve cost efficiency and support the targeted **48 % gross margin** and **18 % EBITDA margin** by FY28.
Financial outlook Nomura forecasts a **26 % EPS compound annual growth rate (CAGR) from FY26 to FY29** and a **370‑basis‑point expansion in EBITDA margin** over the same horizon. Operating profit margin (OPM) is projected to climb another **100 bps in FY29**. Return on capital employed (ROCE) is expected to settle in the **23‑25 % range by FY28**.
Valuation and market positioning The stock currently trades at **45 times** its March‑2028 forward EPS. Nomura’s valuation of **48 times** September‑2028 EPS reflects confidence in the premium‑segment shift while remaining modest relative to peers. Officer’s Choice continues to provide a **pan‑India distribution network with about 80 % market penetration**, and ABDL’s presence in **39 countries** offers a platform for international expansion of its newer brands.
Risks Nomura flags two primary downside risks: **delays in executing the capex and brand‑launch roadmap**, and a **slower-than‑expected consumer shift toward premium spirits**.
Bottom line Nomura’s coverage underscores a belief that ABDL’s strategic pivot to premium offerings, backed by significant capex and a diversified brand portfolio, can deliver robust earnings growth and margin expansion, justifying a **Buy** call and a **Rs 850** price target.
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