Best Alcohol Penny Stocks in India

The Alcohol industry is just like a giant cocktail party that is never going to end. It is all about making, selling, and enjoying drinks. India’s alcohol industry is highly influenced by changes in demographics and people’s lifestyles. The demand for alcoholic beverages is rising with the increase in urbanization as India’s young population is increasing and alcoholic beverages are becoming a necessity in social events. This shift is driving the growth of the Indian alcoholic industry, with a greater consumption of alcohol as a social norm.

In this blog post, we are going to delve deep into top Alcohol Penny stocks in India, their overview, benefits and risks of investing in them.

What are Alcohol Penny Stocks in India?

Alcohol penny stocks are those companies that are involved in the business of spirits, ethanol, or alcoholic beverages that are priced below ₹100 each. India’s alcohol market is a complex and highly regulated market. The state government plays a crucial role in licensing, distribution, and taxation.  

In India, the alcohol industry size is estimated to reach $55,840 million in 2024. The sales of alcoholic beverages are likely to rise at a CAGR of 7.2% and it is estimated to reach $112,338.9 million by 2034.

As the alcohol industry shows significant potential to grow, the alcohol penny stocks can multiply in value quickly, which attracts investors attention looking to grow their capital without much investment. However, it is essential to approach this industry with caution, as sometimes the risk becomes more than the reward.

List of Top Alcohol Penny Stocks in India

The list of top alcohol penny stocks in india are:

Company	Current Market Price (in ₹)	Market Capitalization (in ₹ Crores)	52-Week High (in ₹)	52-Week Low (in ₹)
Piccadily Sugar & Allied Industries Ltd.	70.4	164	92.5	37.1
Ravikumar Distilleries Ltd.	31	74.3	38.9	18.5

Overview of Top Alcohol Penny Stocks

An overview of the alcohol penny stocks are:

Piccadily Sugar & Allied Industry Ltd.

Piccadilly Group is one of India’s fastest-growing groups having diverse interests in the hotel, sugar, and distillery business. It started its operation with the hotel business. After that, it incorporated its sugar and distillery business in 1993 & 2004, respectively.

Piccadily Sugar & Allied Industry (PSAIL) is primarily known for its sugar business, which is white crystal sugar from sugarcane. However, it also has a significant presence in the alcohol industry; it produces and markets a range of alcoholic beverages such as rectified spirit, extra-neutral alcohol from molasses/rice/wheat, ethanol, IMFL ( Indian-made Foreign Liquor), and country liquor.

PSAIL has an installed capacity to manufacture white crystal sugar 2500 tonnes per day; produces 75-kilo liters of rectified spirit/extra-natural alcohol per day and produces rice grain fines in addition to setting up a maltery, brewery with a capacity of 2 lac HLPA.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
70.18%	358.82%	1,268.42%

Ravikumar Distilleries Ltd

Ravikumar Distilleries Ltd was incorporated in 1993. It is a leading player in the Indian alcohol industry under a wide range of alcoholic beverages, including IMFL and country liquor and has tied up with other leading companies. The company’s mother plant is located in Puducherry on 16 acres of green landscaped land. Built with an investment of Rs. 150 million with a capacity to produce 1.43 million cases per annum.

The company is involved in the manufacturing and marketing of high-quality alcoholic beverages like whisky, brandy, rum, vodka, etc. They also supply liquor concentrates in bulk. The Company has a range of product portfolios as Super Premium- Capricorn Super brandy, Capricorn Supervodka, Capricorn Super XXX rum, etc., Premium- 3 Coins VSOP brandy, Dupleix fine whisky, Mr. King brandy, etc., Regular- Konark Grape Brandy, Konark Malt Whisky, Konark XXX Rum, etc. and many more. 

The company also has approximately 65 brands under tie-up arrangements with various Indian leading liquor companies like: Radico Khaitan Ltd., Shashi Distilleries Pvt Ltd., John Distilleries Ltd., Gemini Distilleries Pvt. Ltd., and Mondovi Distilleries & Breweries Pvt. 

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
40.56%	195.59%	468.87%

Factors to consider while investing in Alcohol Penny Stocks

The factors to consider while investing in Alcohol Penny stocks are as follows:

• Government Regulations:  The Alcohol industry is highly dependent on state governments rules and regulations; any shift in regulations can impact the pricing, distribution, supply, sales, and ultimately, the profitability of those companies.

• Market demand: Understanding the consumer preferences in the alcohol industry is the key. The companies that go with the market trends and provide healthier alternatives tend to perform well.  

• Economic fluctuations: Economic conditions can influence the performance of the alcohol industry. During the slowdown of the economy, people tend to reduce their extra spending, including on alcohol. This can lead to a decline in the sales and profitability of alcohol companies.

• Social Issues: Social stigmas such as underage drinking, health awareness, and religion can affect the consumption, reputation, and operation of alcohol companies.

Advantages of Investing in Alcohol Penny Stocks

The Advantages of investing in Alcohol Penny Stocks are:

• Strong market demand: One of the best advantages of investing in alcohol stocks is the consistent and robust demand for alcoholic beverages in india. The rise in the consumption of alcohol in India is influenced by the popularity of cocktails and the rise in millennials and GenZ populations, which uplifted the demand for alcohol and the profitability of alcohol companies.  

• Strong Brand loyalty: India’s leading alcohol companies benefited from high consumer loyalty, which drives consistent sales and enables them to maintain their pricing. Which helps them achieve consistent profitability and shows their growth potential.

• Profit margins: Alcohol companies enjoy robust profit margins due to heavy demand for alcoholic beverages that allows them to control premium prices, especially in premium and luxury brands. 

• Regulatory protection: The alcohol sector is a highly regulated sector that brings barriers to new entry, limiting competition and helping the existing company to expand and maintain their market share.

Disadvantages of Investing in Alcohol Penny stocks

The risks associated with Alcohol penny stocks are as follows:

• High Volatility: Penny stocks experience wild price swings, which makes it difficult to predict their future movement. 

• Regulatory fluctuation: Uncertain changes in state regulations, such as alcohol bans in certain states or increases in excise duties, can disrupt operations, impacting sales and affecting stock growth potential.

• Economic sensitivity: The downturn of the economy influences consumer behaviour in consuming premium products, which declines alcohol sales and, ultimately, their profitability. 

• Social Issues: Increasing the awareness of health and social issues related to alcohol consumption among the young generation leads to a decline in demand and impacts their long-term growth potential. 

• Alternate options: Increase in alternate options of alcohol beverages like non-alcoholic beverages, which are lowering the demand for alcohol.

Conclusion

Alcohol penny stocks could be a better choice for investors who want to diversify their portfolio and want to grow their capital as the alcohol industry is growing. But remember, penny stocks are a high-risk, high-reward entity, so before taking any position in these stocks, consult your financial advisor and thoroughly understand their business before making any decisions.

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