Chapter 6

India: the region still growing

While China fell -21% in FY25 and cognac carried the group down, one large market kept compounding. India — Pernod Ricard's second-largest market by net sales [1] — grew organically every year through the downturn, from +26% in FY22 to +6% in FY25, and accelerated to +11% in the third quarter of FY26 [2]. It is a genuine structural offset on the sales line, powered by demographics no cycle removes. The qualification that matters: India is lower-margin than the cognac profit it is being asked to replace, and it carries state-excise and legal volatility of its own.

One region grew while the profit center collapsed

The clearest way to see India's role is against China, the market whose decline sits at the center of this dislocation (Cognac and China). The two moved in opposite directions through the entire drawdown.

Sources: FY2022 Sales & Results [3]; FY2025 Sales & Results [4]; Q3/9M FY2026 [5]; China FY24 per Cognac and China.

In FY25, India delivered +6% on "strong underlying consumer demand and premiumisation trends" in the same year China printed -21% [6]. The gap widened in FY26: through nine months India was +6% (with the third quarter at +11%) against China at -24% year-to-date [7]. India was already the standout of the recovery years — +26% in FY22, when management flagged it as the strongest of the must-win markets [8] — and it kept growing when the rest of the group turned negative.

A structural tailwind, not a cyclical rebound

What separates India from a normal cyclical recovery is the demographic base underneath it. Management quantifies it plainly: roughly 25 million people join the legal-drinking-age population every year, "for the foreseeable future," in what is already the world's largest whisky market [9]. That inflow, combined with a growing middle and affluent class, is the engine that carried India to the group's number-two position by net sales [10].

Sources: FY2024 Annual Report / URD, CEO interview [11] and must-win markets [12]; FY2024 earnings call [13].

The company is putting capital behind that read. In 2024 it announced investment plans of up to €200 million in India, including one of the country's biggest malt distilleries, under a Memorandum of Understanding with the Government of Maharashtra [14]. The imported portfolio travels well into this base: with over 500,000 nine-litre cases sold in FY24, India became Jameson's second-largest market globally [15]. This is the demand profile the bear case on Western moderation and GLP-1 (Demand Durability) does not touch — a young, urbanising, first-generation premium-spirits consumer, not a mature market defending its penetration.

Premiumisation, made visible by a disposal

India's growth is not just volume; management is deliberately trading up the mix, and it took a structural step to prove it. In late 2025 the group disposed of its Imperial Blue business — a large, mass-market Indian whisky brand — alongside its Wines operations [16]. The effect on the underlying growth rate is the cleanest evidence of the premiumisation: in the first half of FY26, India was +4% as reported but +8% excluding Imperial Blue [17]. Shedding the value-end brand lifts both the growth rate and the margin of what remains.

Sources: FY2024 Sales & Results [18]; FY2025 Sales & Results [19]; H1 FY2026 Sales & Results [20].

The engine driving the mix is the local Seagram's whisky portfolio — Royal Stag and Blender's Pride trading up, with the mass-market Imperial Blue divested — layered under the imported brands. The strategic framing in the FY24 report is explicit: "quality over quantity," positioning India as a hub for premium and luxury rather than volume [21]. For a group whose FY25 profit fell on cognac and China, a growing high-single-digit market that is actively improving its own margin is worth more than its share of sales suggests.

What the offset does not do

India cushions the growth line. Whether it backfills the profit is a different question, and the honest answer is: not fully, and not soon.

The arithmetic gap is structural. Chapter Cognac and China established that Asia/Rest-of-World generated €1,360m of recurring profit — roughly 46% of the group total — with cognac and China the highest-margin engine inside it. Indian whisky, even premiumising, sells at price points well below Martell cognac; the mix trade-up is real but it is climbing from a lower base. India can plausibly replace China's growth contribution long before it replaces China's profit contribution. The company does not disclose India's net sales or margin separately, so this cannot be pinned precisely — but the direction is not in doubt.

India also brings its own volatility, on two fronts:

• State excise policy. Alcohol is regulated state by state, and the rules move. Maharashtra excise changes were called out as a specific FY26 headwind, skewed to the first quarter [22] — the same state that signed the distillery MoU. State reopenings (such as Andhra Pradesh) cut the other way. The net effect is a growth line that is genuinely strong underneath but choppy quarter to quarter.
• A legal overhang. Pernod Ricard India is the subject of an Enforcement Directorate charge sheet, filed in a Delhi court in February 2023, alleging the local unit may have benefited from irregularities under the Delhi excise policy, in breach of India's anti-money-laundering law; separate long-running customs and tax disputes are also outstanding [23]. None of this is quantified as material to the group, and the company says it will contest the allegations, but it is a governance tail that a China-and-cognac-focused reading of the dislocation would otherwise miss.

The read: India is the most durable growth asset in the portfolio and the strongest single piece of evidence that the group's demand base is not uniformly impaired — its demographics are the antidote to the Western-moderation bear case. It is not, on its own, a full profit offset to a structurally lower China, and it adds regulatory and legal noise. It changes the odds on the permanent-impairment question (Demand Durability) more than it changes the near-term profit bridge. What would sharpen the read: separate India net-sales and margin disclosure, and evidence that the ex-Imperial-Blue growth rate holds once the disposal laps.