Premiumisation powers Radico’s Q1 numbers; P&A growth guidance raised to 25%+

Abhishek Khaitan, Managing Director, Radico Khaitan

Radico Khaitan, maker of Magic Moments vodka, reported a strong start to FY27, led by continued premiumisation. Total IMFL volumes rose 2.8 per cent year-on-year to 10 million cases in Q1FY27, while Prestige & Above (P&A) brand volumes surged 35.8 per cent to 5.22 million cases. As a result, P&A brands accounted for 53.1 per cent of IMFL volumes, up from 41.5 per cent a year ago.Net sales from the P&A portfolio increased 36 per cent to ₹970 crore, with its contribution to total IMFL sales value rising to 76.8 per cent from 66.7 per cent in the year-ago quarter.Revenue from operations grew 11.8 per cent year-on-year to ₹1,683.7 crore. Gross profit climbed 27.7 per cent to ₹826.8 crore, taking the gross margin to 49.1 per cent. EBITDA jumped 50.9 per cent to ₹348.1 crore, with the EBITDA margin expanding to 20.7 per cent from 15.3 per cent in Q1FY26.Abhishek Khaitan, Managing Director, and Dilip K. Banthiya, CFO, spoke about the company’s Q1 performance, premiumisation strategy, growth outlook, exports, and the impact of policy and geopolitical developments.With the P&A segment contributing over half of total case volumes, how significant is its role in driving overall growth compared with the other segments?Abhishek Khaitan: The shift towards the P&A category is helping with EBITDA growth, which has increased from 15.3% to 20.7%. Our EBITDA has jumped 50% to ₹348 crores, and net profit has jumped 70% to ₹45 crores.How is the current geopolitical situation affecting the liquor industry? What disruptions are you seeing, and how are you managing them?Dilip Banthiya: Because of the West Asia crisis, our supply chain has not been disrupted due to our long-term relationship with our supply chain vendors and a widely spread-out supply base. However, there has been a cost push in supplies. The glass prices are up by 15%; barley prices were up by 13%. Septo packs, one of the packs in various markets, has also seen an 8–9% increase. Overall, there has been a negative impact of ₹30 to ₹32 crores. Freight cost has also gone up internationally and domestically. All this has been absorbed. Premiumisation has played the key role in margin expansion. Out of the 610 basis point (bps) margin expansion, 550 bps are on account of product mix changes.Has the West Asia crisis had any impact on consumer demand? Is there moderation in discretionary spending on alcoholic beverages, or has consumption remained resilient?Dilip Banthiya: Over the last 5–6 years, we have been growing our P&A category between 15% and 20% consistently. We also see a structural shift in people’s habits. The premium brand growth is double the size of the mass brands, growing 7–8%. This year we have given guidance of 25% plus on our P&A side. Meanwhile, the white spirit segment is now trending among Gen Z; the saliency of white spirits is increasing, and in the last two years we have seen a shift from 3.7% to 6.1%. Globally, it is 28%. A further shift could indicate a long-term structural story towards white spirits, 70–75% of which is flavoured vodka.How have recent state-level policy changes influenced your business? In particular, what impact have the reforms in Karnataka had, and do you see the state emerging as a key growth market for Radico?Dilip Banthiya: For the first time, an alcohol-based taxation system has been introduced, due to which premium brands are becoming cheaper by 10% to 15%. Our top popular SKU grew by 120%. On premium, it has grown by 28%.Abhishek Khaitan: Even last time when the MRP had decreased, Radico had expected the maximum growth in Karnataka. We grew by 100% in the premium P&A category, whereas the industry had grown 40%. With this kind of MRP reduction, we expect huge growth in Karnataka.How is the export business shaping up?Abhishek Khaitan: Currently, we are in approximately 107 countries, and we are looking forward to further expansion. We are also growing in the Global Travel Retail channel, which is helping us expand our global footprint.Any greenfield or brownfield investments planned for the fiscal year?Dilip Banthiya: We are done with our brownfield and greenfield projects. Now, there will be normal maintenance capex and some balancing of production facilities, which will be in the range of ₹150 to ₹175 crores.With the India–UK FTA set to come into effect, what benefits do you expect Radico to derive from the agreement?Abhishek Khaitan: We are one of the largest importers of Vatted Malt Spirit in India; we import close to ₹270 crores. Since the duties are down from 150% to 75%, there would be a tailwind of cost savings.What is your overall outlook for full year FY27?Dilip Banthiya: We have upgraded both guidance. One is the P&A growth of 25%, from our earlier guidance of 20%. At the same time, last year we were at an EBITDA margin of 16.8%, and we have always said that for 2-3 years, we will grow by 100 to 125 bps on an annual CAGR basis. But this year, because of premiumisation and the saliency of vodka, we have already achieved two years’ guidance of 20% plus growth, which is the EBITDA guidance of 20% for the whole of FY27. This premiumisation will result in higher profit and a higher EBITDA margin.Published on July 29, 2026