Associated Alcohols & Breweries Limited

Consumer Defensive — Beverages - Wineries & Distilleries · NSE

₹594.00+₹5.35 (+0.91%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Associated Alcohols & Breweries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Associated Alcohols & Breweries Limited engages in liquor manufacturing, distillation, and bottling activities in India and internationally. It operates through two segments, Potable Alcohols and Ethanol.

IndustryBeverages - Wineries & Distilleries

SectorConsumer Defensive

Employees654

Annual revenue₹1,008 Cr

How does it make money?

Turns over ₹1,008 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 654 employees supports ₹1.54 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.54 Cr

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 16.9% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE51.0%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 11.8% and earnings to grow about 17.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.8%

Est. earnings growth+17.2%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +44% while net margin moved +47% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+44%

Margin effect+47%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.41 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

62/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

81/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

13.9x

3Y Median

22.6x

40 monthly readings · mean 26.2x · range 12.9x–49.7x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 38% below its 3y median of 22.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 68% below the peer median of 43.3x.

vs. its own history

Cheap

22.6x median over 40 months · -38%

vs. sector peers

Cheap

43.3x median of 4 peers · -68%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.5x

PEG

0.49

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 10.1% to 14.5% over 3 years.
Debt is being paid down
Total debt is down 31% over 3 years.
Return on capital is rising
ROCE has improved from 12.8% to 16.9%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 4 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 9.92x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 129% against revenue up 44% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 87% against revenue up 44% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 10.1% to 14.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 31% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 38% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 68% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 9.92x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 129% against revenue up 44%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
4 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 10% a year✓ 13.0% CAGR
Latest reported year was 5.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 13%✓ 14.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹5 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 14%✓ 16.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹1,193 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.9x

Cheap

Cheap against the generic band

P/B Ratio

1.63x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹42.67

Profitable

Profitable on a per-share basis

ROE

12.7%

Moderate

Moderate capital efficiency

ROCE

16.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

9.92x

High

High leverage

Revenue Growth (YoY)

5.3%

Modest

Modest growth

Profit Growth (YoY)

-28.5%

Falling

Profits are shrinking

Dividend Yield

0.34%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

10.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

8.1%

Average

Average margins

Net Margin

8.0%

Average

Average bottom-line conversion

Current Ratio

2.58

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.41

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

614.2 / 671.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

28.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹698 Cr	₹755 Cr	₹1,063 Cr	₹1,008 Cr	+13.0%
EBITDA	₹70 Cr	₹82 Cr	₹130 Cr	₹146 Cr	+27.6%
EBITDA Margin	10.1%	10.9%	12.3%	14.5%	—
PAT (Net Profit)	₹42 Cr	₹51 Cr	₹81 Cr	₹88 Cr	+28.6%
EPS	₹22.99	₹28	₹43.03	₹45.92	+25.9%
ROE	11.4%	12.0%	15.6%	12.7%	—
ROCE	12.8%	14.6%	20.2%	16.9%	—
Total Debt	₹100 Cr	₹108 Cr	₹102 Cr	₹69 Cr	-11.7%
Free Cash Flow	-₹86 Cr	-₹76 Cr	-₹12 Cr	-₹5 Cr	—

🟢 Revenue has grown at 13.0% a year over 3 years.

🟢 EBITDA has grown at 27.6% a year over 3 years.

🟢 EBITDA Margin has risen from 10.1% to 14.5% over 3 years (+4.4 pts).

🟢 PAT (Net Profit) has grown at 28.6% a year over 3 years.

🟢 EPS has grown at 25.9% a year over 3 years.

🟢 ROE has risen from 11.4% to 12.7% over 3 years (+1.3 pts).

🟢 ROCE has risen from 12.8% to 16.9% over 3 years (+4.1 pts).

🟢 Total Debt has shrunk at 11.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹856 Cr

Total Liabilities

₹161 Cr

Cash & Equivalents

₹11 Cr

Operating Cash Flow

₹52 Cr

Capex

-₹57 Cr

Shareholding (proxy)

Institutional Holding

0.2%

Insider Holding

65.2%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

09 Sept 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹960

+61.6% vs CMP

Target Range

₹960 – ₹960

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

2 positive1 mixed3 general

Is Associated Alcohols and Breweries the Best Stock in Its Sector? A Look at the Numbers

Univest, 23 Sept

ASALCBR Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Associated Alcohols & Breweries (ASALCBR.NS) Holds Firm Near ₹599 as Traders Eye ₹629 Resistance - Strong Buy Stocks

https://www.siam.in/, 06 Oct

AABL Q1FY27 revenue rises 6% led by ethanol surge; net profit falls 24%

scanx.trade, 21 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Associated Alcohols Q4 Net Profit rises 5% to ₹23.5 crore despite 4% Revenue drop

Sahi, 18 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Associated Alcohols & Breweries Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Valuation

MiddlingFinancial Health · Profitability

WeakRisk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑