Radico Khaitan Limited — Q4 FY26 earnings call

To answer your first question about the new launches, if you see in the last year itself, we have launched three-four brands in the luxury as well as the P&A category. So, we want to consolidate that. That will be our first objective and take it nationally like our Virasat Indian Single Malt, The Spirit of Kashmyr. Right now, it is in 10 states, we want to take it to 20 states. So, that will be our prime focus. Plus, we have launched new flavours of Magic like Jamun, Mango, Thandai, which we are going to again take nationally. And in the coming year what we feel we are going to launch is some more flavours in the Magic family and those will be also in the Flavours of India category. Also at the end of the year we will be coming out with Tequila in D'YAVOL Spirits. So, these are our launch plans. ... So, on the margin front, as you noticed that in last quarter we have improved our gross margin by 450 basis points and EBITDA margin by 565 basis points and we are quite confident to add 120 basis points to 125 basis points margins in the coming year ‘27. So, this is on annualized basis. We have got the price increases in some of the states which amount to be around 60 basis points. At the same time product premiumisation and operating leverage will yield us more than 200 basis points. So, we will be more than mitigating the impact of the cost push and thereafter also we are confident to deliver 120 basis points to 125 basis points margin expansion.

Provides detailed roadmap for new product launches and expansion, and explains the strategy for achieving and mitigating margin expansion targets despite commodity costs.

Asked by Aditya Soman

So, first of all regarding Karnataka which you had asked, yes, we have seen last time when Karnataka rationalized the pricing for the premium brands, there was a significant growth which has come on the premium brands. And since we have the portfolio of the premium brands like Rampur, Jaisalmer, Royal Ranthambore, etc., it is very well established there. We also gained the advantage on account of this price rationalization which has been done almost a year and a half back. Now, this time also we are anticipating the government is working on similar line. Although the official announcement is not there, in that case, if it is going to be there, we will certainly be benefited with that.

Clarifies the positive impact of Karnataka's policy on premium brands and anticipates further benefits from potential similar rationalization.

Asked by Vishal Gutka

Your second point is regarding West Bengal. West Bengal, it is too early to preempt anything because there is a change which is recently been made. So, we will wait and watch on what is happening in West Bengal, and on the basis of that we will put the strategy there. We had a strong vodka base there, so we will get the benefit of that. ... And in Bihar, we will wait and watch. Before the prohibition we used to have a large consumer base in Bihar and it is a significantly populated state. So, we will wait and watch. In the case if anything happens in Bihar, we will get the benefit of it.

Addresses potential market changes in key states, highlighting a wait-and-watch approach but acknowledging potential benefits.

Asked by Vishal Gutka

To answer your first question regarding the expansion to the various states and on-trade, I think we see that especially with Virasat, Kashmyr, all this has a huge scope of expanding it. And on-trade also, what we had told about two years back with our luxury portfolio has become a key focus area for Radico. So, we are adding outlets by the day and this year brand advocacy is one of our most important initiatives. We are planning to have about close to 1,000 advocacy sessions in the on-trade. So, I think all these put together, that is why we are confident that our luxury portfolio should grow by 25% in terms of value from INR 475 crores. ... In terms of the US tariffs at 10% it is not make or break especially for the luxury portfolio where the difference on the retail end would be about $5 to $6 a bottle. So, that is not substantial.

Details the strategy for luxury portfolio expansion and clarifies the limited impact of US tariffs on the luxury segment.

Asked by Harit Kapoor

Regarding the margin expansion, as you said that UK-India FTA benefit, so 125 basis points expansion is inclusive of all, at the same time there can be some pluses and some minuses. So, we are conservative on our guidance that some something goes on cost push side due the current global environment. So, 125 basis points should be delivered given the current scenario.

Confirms that the 125 bps margin expansion guidance includes potential UK-India FTA benefits, but also accounts for potential cost push.

Asked by Harit Kapoor

Your first question regarding the power and fuel balancing. So, 90% of our power and fuel in both the plants Sitapur and Rampur is biofuel-driven. So, I am not at all dependent on the LPG. So, it takes care of itself and the biofuel is locally available and there are boilers and turbines etc., which generate power. So, in both the plants we are self-sufficient on our captive basis. ... Your second question is regarding the glass. As I said earlier that we have a long-standing relationship with the glass manufacturers. We do not foresee any impact on our glass supply. At the same time there has been some inflation in the glass prices in the last month; around 15% of the glass price has increased. We have factored into our costing and after that also we are talking about margin expansion.

Provides clarity on energy independence and addresses the impact of recent glass price inflation, confirming it's factored into margin guidance.

Asked by Abhijeet Kundu

As far as the GenZ goes, the white spirit is what the GenZ prefers and that is where our innovation of the different flavours of vodka is coming into play. And that is helping us to get GenZ into the white spirits. ... As far as low alcoholic or RTD goes as of now we do not have any major plans to get into it.

Outlines the company's strategy to attract GenZ consumers through white spirits and flavor innovation, while explicitly stating no current plans for low-alcoholic or RTD beverages.

Asked by Navani Naredi

See, as far as Maharashtra is concerned, we have saliency of around 3% to 4% of our overall business. Yes, after the MML introduction the IMFL industry has gone down; it has gone down by 20%, 25%. So, gradually MML is stabilizing. And we hope that IMFL over a period of time should come back to a normal position. And since we are in vodka category and above there, Premium & Above is a stable for us.

Provides an update on the Maharashtra market, acknowledging the initial industry decline post-MML introduction but noting stabilization and stability for premium segments.

Asked by Yash Patil