Shares of GM Breweries experienced a surge of approximately 13% on Wednesday, June 11, 2025, following the Maharashtra state government's decision to hike excise duty on liquor. This move by the state cabinet is anticipated to significantly impact liquor prices and boost state revenue. While some liquor stocks faced a downturn, GM Breweries and Sula Vineyards defied the trend, with their share prices jumping.

The Maharashtra government's decision involves increasing the excise duty on Indian Made Foreign Liquor (IMFL) from three times the manufacturing cost to 4.5 times. Additionally, the duty on country liquor has been raised from Rs 180 to Rs 205 per proof litre. These revisions mark the first major change in excise duty in Maharashtra since 2011. The state government is also introducing a new category called "Maharashtra Made Liquor" (MML), which aims to bridge the pricing gap between country liquor and IMFL. Only local manufacturers using grain-based alcohol will produce MML, requiring them to register new brands under this category.

The expected impact on retail prices is substantial. A 180 ml bottle of country liquor will now cost a minimum of Rs 80, up from Rs 60-Rs 70, while IMFL prices will rise to Rs 205, up from Rs 115-Rs 130. Premium foreign liquor may now cost Rs 360, up from Rs 210. The government anticipates that this hike will increase its revenue by ₹14,000 crore, bringing the total to ₹57,000 crore in FY 2025-26.

Several factors prompted this decision by the Maharashtra government. Facing a cash crunch due to payout schemes like the Ladki Bahin Yojana, the government sought to increase revenue from liquor sales. A committee was formed in January, headed by additional chief secretary Valsa Nair, to recommend steps for boosting revenue. The committee's report, submitted in April, served as the basis for the cabinet's approval of the excise duty hike.

While GM Breweries saw its shares rise, other liquor stocks, including United Breweries, United Spirits, and Allied Blenders, experienced declines. This divergence is likely due to the introduction of MML, which benefits local manufacturers like GM Breweries. The exemption of beer and wine from the excise duty hike also contributed to the positive performance of Sula Vineyards.

GM Breweries, a major player in Maharashtra's country liquor market, has a substantial market share in the state. In April 2025, the company reported a 30.22% drop in net profit for Q4 FY25, but revenue from operations grew by 5.93%. The board has recommended a final dividend of Rs 7.5 per equity share. The company has also been expanding its business by venturing into infrastructure development through a wholly-owned subsidiary, Buildfort Infradev Private.