Radico Khaitan’s premium spirits have a moment as regular volumes lose ground

Radico Khaitan’s net revenue from operations rose 16.8% year on year to Rs 1,745.1 crore in the September quarter, while net profit jumped 66.1% to Rs 230.9 crore, as strong growth in premium liquor volumes offset a decline in its Regular & Others portfolio.

The spirits maker’s Prestige & Above portfolio volumes grew 35.8% year on year to 5.28 million cases in the second quarter of FY27, while volumes in the Regular & Others category fell 9.7% to 4.55 million cases, according to its earnings presentation released on Tuesday. The financial figures are on a standalone basis.

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Radico attributed the decline in regular volumes to a higher base in the year-earlier quarter following a change in its route-to-market in Andhra Pradesh, as well as the impact of policy changes in Maharashtra and Karnataka.

The shift towards premium products continued to improve the company’s sales mix. Prestige & Above products accounted for 53.7% of its own volumes in Q2 FY27, up from 43.6% a year earlier. Their contribution to Indian-made foreign liquor (IMFL) revenue increased to 77.1% from 68.6%.

“Our premium-first strategy has delivered another quarter of remarkable results. The Prestige & Above portfolio volume grew 36% in Q2, well ahead of the industry, and continued to enrich our mix,” Managing Director Abhishek Khaitan said in the presentation.

The company raised its FY27 Prestige & Above volume growth guidance to 30% and reiterated its expectation of an EBITDA margin of around 20%.

Grain costs prompt inventory build-up as margins widen

Radico Khaitan’s gross profit increased 28.6% year on year to Rs 838.4 crore in Q2 FY27. Gross margin expanded to 48%, from 43.6% in the year-earlier quarter, while EBITDA rose 51% to Rs 356.5 crore. EBITDA margin widened to 20.4% from 15.8%.

The company said it had built up higher inventory to mitigate the impact of rising grain prices, helping support its performance during the quarter but increasing working capital requirements.

“To mitigate the impact of increasing grain prices to a large extent, we had built up higher level of stocks which has supported us through Q2 FY27,” the company said in its presentation.

“This has resulted into higher working capital during the quarter.”

Radico said it remained confident about its margin trajectory for FY27, citing its integrated manufacturing platform, procurement measures and richer product mix.

Selling and distribution expenses rose 19.5% year on year to Rs 184.3 crore, while other operating expenses increased 14.5% to Rs 230.6 crore. Interest expense declined 29.9% to Rs 11.4 crore.

The company also continued to invest in marketing its core brands and new launches. Advertising and sales promotion spending stood at 6.6% of IMFL sales in Q2 FY27, compared with 6.1% a year earlier. Radico expects to maintain this spending at around 6-8% of IMFL revenue.

Premium volume growth was led by the vodka portfolio, which expanded 49% to 2.96 million cases. The company has identified vodka as a key growth category, supported by changing consumption preferences and increasing demand for premium spirits.

Its portfolio includes Magic Moments vodka, 8PM Premium Black whisky, Rampur Indian Single Malt and Jaisalmer Indian Craft Gin.

Also read: Radico Khaitan bets on premium products to drive spirits demand

Radico targets net debt-free status in H2 FY27

Radico Khaitan reported net debt of Rs 175.4 crore as of September 30, 2026, down Rs 68.7 crore from March 31, 2026. Total debt stood at Rs 247.1 crore, including term loans of Rs 54.3 crore, while cash and cash equivalents amounted to Rs 71.7 crore.

Term loans declined by Rs 75.7 crore during the six months ended September 2026. The company said it expects to become net debt-free in the second half of FY27.

Chairman and Managing Director Lalit Khaitan said the company’s performance reflected sustained investment in quality, brand building and premiumisation.

“The second quarter reaffirms the consistency of our growth journey. Building on the milestone FY26 and an encouraging start to the year, Radico Khaitan has delivered another robust performance, taking H1 FY27 to record volume, revenue and profitability,” he said.

“India’s long-term consumption story remains intact, and Indian spirits are increasingly earning their place among the world’s finest,” he added.