Stock to Buy: Alcohol stock to buy now for 35% returns

Synopsis: Choice Institutional Research has given a Buy rating on an alcohol stock with a target price of Rs650, citing the company’s strong performance with volumes rising 16.3 percent YoY to 34.2 lakh cases(+6.5 percent QoQ) among others.

This company is in the business of manufacturing and selling Indian Made Foreign Liquor, and is one of the larger players in the brandy segment in a country where the second most consumed alcoholic beverage is brandy. This stock has been in highlight after its recent results announced with a 16.3 percent YoY growth and a 6.5 percent growth on QoQ basis.

With a market cap of Rs 11,571 crore, Tilaknagar Industries was trading at Rs 468 on Tuesday. The alcohol stock has delivered an impressive 89 percent compounded return over the past five years, and currently holds a potential upside of 38 percent.

Brokerage Recommendation

Choice Institutional Equities has reiterated its Buy rating on Tilaknagar Industries (TLNGR), maintaining a target price of Rs 650, which represents a 36 percent upside potential from the current market price of Rs 478.65. 

The brokerage remains bullish due to strong performance indicators, as TLNGR delivered a strong Q2FY26 with volumes up 16.3 percent YoY to .34 crore ( 34.2 lakh) cases and net revenue of Rs 398.2 crore, grown by 9.3 percent YoY after adjusting for subsidies. Despite a 255 bps or 2.55 percent drop in gross margin, EBITDA margin stayed around 15 percent due to operating leverage. PAT stood at Rs 52.7 crore, lower than the broker estimates of Rs 67.2 crore.

The company continued to gain share, in Andhra Pradesh rising from 10 percent to 12 percent following privatization and delivering nearly 20 percent volume growth. New launches included Mansion House Whisky in three states and Monarch Legacy in duty-free markets, with both winning awards at the 2025 Spiritz Conclave.

TLNGR increased its stake in Spaceman Spirits Labs(SSL) to 21.3 percent, and Samsara and Amara were launched in Odisha, Puducherry and international travel retail. SSL posted a loss of Rs 2 crore for the quarter but expanded TLNGR’s premium reach.

Prag Distillery, a subsidiary, has been scaling its capacity from 6 lakh to 36 lakh cases per year with Rs 59 crore capex,  and is expected to be ready by H1FY27. Management expects mid-teen growth in FY26 and low double-digit growth in FY27– 28.

The Rs 4120 crore Imperial Blue acquisition, funded equally by equity and debt, should close by Q3FY26. Imperial Blue adds Rs 3067 crore in estimated revenue, although consolidated margin guidance has been cut from 15.6 percent to 11.3 percent for FY28. Despite this, net profit is expected to grow at a 19 percent CAGR between FY25 and FY28.

The target price remains at Rs 650, which implies a P/E of 62x for FY27 and 42x for FY28. Revenues are projected to rise from Rs 1,434 crore in FY25 to Rs 5791 crore by FY28, with PAT expanding from Rs 229.8 crore in FY25 to Rs 386.5 crore in FY28.

-Adithya Menon

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