The agency expects volume to grow at a moderate pace of 2-4 percent in FY25 supported by a limited increase in taxes anticipated for the year.
Beer saw higher consumption than spirits in FY24 with a growth of 8 per cent, supported by stable demand and higher tax increases on spirits in some states. Accordingly, the agency expects a moderate 5-7 per cent volume growth this fiscal.
The operating profit margins improved by 200 bps to 12.9 per cent in FY24, due to a correction in glass bottle prices and largely stable grain prices.
Manufacturers saw an increase in grain cost in H1FY25 due to a 20-25 per cent rise in non-basmati rice prices, while barley prices were fairly stable.
However, the non-basmati rice prices have started softening from July on the one hand and on the other, prices of glass bottles declined this year due to a sharp correction in soda ash prices.
This, along with price hikes permission received from various states at the start of the fiscal, is expected to keep the margins intact at 12-13 per cent in FY25.
Liquor companies incurred a capex of over Rs 1,000 crore each in FY23 and FY24, which is 4 per cent of their operating income, indicating an investment revival after the pandemic. But capex is expected to moderate to 2-3 per cent this and next fiscal as key players have already enhanced their capacities.