Allied Blenders and Distillers Ltd.

“Allied Blenders and Distillers is India's largest IMFL volume player, but volume leadership in a state-regulated, margin-compressed industry does not translate to shareholder value creation. Sub-cost-of-capital ROIC, structural working capital dysfunction, single-brand concentration in Officer's Choice, existential prohibition risk, and governance concerns rooted in promoter behavior collectively describe a mediocre business. At 58.5x trailing earnings and 10x book, the market is pricing ABD as a high-quality compounder — a designation this business has not earned and may never earn given structural constraints. The premiumization optionality is real but speculative, and better-capitalized peers are further along that journey. With no margin of safety, no durable pricing power, and asymmetric downside risk, ABDL should be avoided.”