Radico Khaitan Limited

Radico Khaitan achieved its highest-ever quarterly performance in Q3 FY26, reporting 9.75 million cases in total IMFL volume, a net revenue of ₹1,547 crores, and an EBITDA of ₹265 crores. This strong performance was attributed to strategic clarity, portfolio depth, and execution excellence. The results reflect the strength and quality of the company's business model, translating structural tailwinds in the Indian spirits sector into tangible outcomes.

The premiumization strategy continued to yield strong results, with the Prestige & Above category (excluding royalty brands) recording 26% volume growth and 29% value growth, alongside a 2.8% improvement in realizations. Key brands like Royal Ranthambore Whisky grew over 50% in Q3, Magic Moments Vodka saw 18% volume growth and crossed ₹1,050 crores in nine-month sales, and After Dark Whisky grew 40% in Q3 and 80% over nine months. The newly packaged 8PM Premium Black Whisky also gained strong momentum, growing 40% in Q3.

Radico Khaitan demonstrated broad-based strength across markets, with significant growth in Andhra Pradesh, Uttar Pradesh, Telangana, Rajasthan, MP, and Haryana. In Andhra Pradesh, market share increased from over 15% in Q3 FY25 to 26% in Q3 FY26, establishing Radico as the leading player. The company is also set to launch its Maharashtra Made Liquor (MML) through a joint venture (RNV) this month, addressing the impact of the new excise policy which saw the Maharashtra market decline by 20% in Q3.

Profitability saw substantial improvement, with gross margin expanding by 350 bps YoY to 46.9% and EBITDA margin by 300 bps YoY to 17.2%. This was primarily driven by a benign raw material environment, contributing 225 bps to gross margin expansion, and ongoing premiumization. Management expects raw material prices, particularly for ENA and grain, to remain stable to favorable, and anticipates a further 125 bps gross margin improvement annually for the next two years, aiming for 'late teen' margins.

The Board approved the establishment of a 100% wholly-owned subsidiary in Scotland, a strategic move to invest in malt capabilities and secure cost-effective access to the matured malt supply chain. This initiative aligns with the growing premium portfolio and the company's position as a large importer of vatted malt spirits. Additionally, Radico has significantly beefed up its on-trade team, with 50-70 dedicated personnel, leading to on-trade sales now contributing 6-7% of total sales and enhancing brand visibility for luxury products.

The company continues its disciplined approach to capital allocation, with ongoing capex focused on maintenance and essential capacity optimization. Net debt has reduced by ₹209 crores since March 2025, driven by improved profitability. Radico Khaitan is on track to become debt-free by FY27. Management indicated that post debt repayment, generated cash would primarily be used for dividend payouts, signaling a shareholder-friendly approach.