Radico Khaitan Limited Q3 FY26 Earnings Call Summary

Summary

Radico Khaitan Limited - Q3 FY2026 Earnings Call Summary Friday, January 23, 2026, 4:00 PM IST

Event Participants

Executives 3 Abhishek Khaitan (Managing Director), Dilip Banthiya (CFO), Sanjeev Banga (President – International Business)

Analysts 8 Abhijeet Kundu (Antique Stock Broking), Abneesh Roy (Nuvama), Ajay Thakur (Anand Rathi Securities), Anurag Jain (Individual Investor), Harit Kapoor (Investec), Het Raichura (Ananya Research), Jasdeep (Clockvine Capital), Karan (Choice Institutional Equities), Naveen Trivedi (Motilal Oswal), Nilabja Dey (Ashmore Research), Nitin Awasthi (InCred Research), Nitin (Emkay)

Financials & KPIs

Geographic & Segment Commentary

• Andhra Pradesh: The company emerged as the leading player in the state after a route-to-market change. Market share increased significantly from ~15% in Q3 FY25 to 26% in Q3 FY26, driven initially by regular brandy and now gaining traction in premium segments.
• International Business: Exports account for 5% of total volume and 8% of revenue. The company is seeing steady growth in luxury portfolios and is prioritizing Global Travel Retail (GTR) as a key channel for future expansion.
• Maharashtra: The market faced headwinds with a 20% industry decline following the introduction of Maharashtra Made Liquor (MML) regulations. Radico plans to launch its own MML products through its RNV joint venture in the current month to recover lost volumes.

Company-Specific & Strategic Commentary

• Luxury Portfolio Scaling: Management expects luxury/super-premium revenue to reach ~₹500 crores in FY26, up from ₹340 crores in FY25. Success is led by brands like Jaisalmer Gin (50%+ luxury market share) and Royal Ranthambore (+50% growth in Q3).
• Malt Strategy & Scotland Subsidiary: The Board approved a 100% subsidiary in Scotland to secure the matured malt supply chain. As one of India’s largest malt importers, this move aims at cost-effective maturation and potential future asset acquisition amidst a global “Scotch glut.”
• On-Trade Expansion: Strategic focus on bars, clubs, and airport lounges, which now contribute 6-7% of total sales. The team has been beefed up by ~70 specialized professionals to drive brand advocacy and trials via experiential marketing.
• Brand Innovation: Launched Rampur 1943 Virasat Indian Single Malt and Morpheus Whisky. Magic Moments Vodka grew 18% in Q3, crossing ₹1,050 crores in revenue for the 9-month period.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Andhra Pradesh Performance

• Question: What drove the market share gains and is it sustainable? (Abhijeet Kundu)
• Answer: Growth was initially led by the regular brandy segment where Radico has a “lion’s share,” but the premium portfolio has started gaining traction in the last two months. We aim to maintain our leading 26% share (Abhishek Khaitan).

Scotland Subsidiary Rationale

• Question: Why set up a subsidiary in Scotland given the success of Indian malts? (Nitin Awasthi)
• Answer: It is an opportunistic move to secure supply. There is currently an oversupply/glut in Scotland and prices are softening. The subsidiary allows us to buy fresh malt, mature it there, or eventually acquire inventory-rich distilleries at favorable prices (Abhishek Khaitan/Dilip Banthiya).

Project D’YAVOL (Tequila)

• Question: What is the structure and outlook for the Tequila JV? (Anurag Jain)
• Answer: This is a joint venture between Radico (47.5%), Shah Rukh Khan (47.5%), and Nikhil Kamath (5%). The brand is created organically and bottled in Mexico. It is a high-margin business, though volumes will scale gradually as the category matures in India (Abhishek Khaitan).

Margin Drivers

• Question: Can you break down the 350 bps gross margin expansion? (Naveen Trivedi)
• Answer: 225 bps came from softer raw material costs, while 125 bps was driven by premiumization and improved product mix. Sequentially, premiumization played an even larger role (Dilip Banthiya).

Key Takeaway

Radico Khaitan delivered a landmark third quarter, achieving its highest-ever volumes of 9.75 million cases and net revenue of ₹1,547 crores. The performance was characterized by a dual engine of growth: a massive 33% recovery in the regular segment following market share gains in Andhra Pradesh (now 26%), and a 26% volume surge in the Prestige & Above category. Profitability hit an inflection point with EBITDA margins expanding 300 bps to 17.2%, aided by a mix of 40% growth in brands like Royal Ranthambore and After Dark. Strategically, the company is pivoting toward a luxury-first model, evidenced by the new Scotland subsidiary for malt security and the D’YAVOL Tequila partnership. With a projected ₹500 crore luxury revenue run rate and a clear path to becoming debt-free by FY27, Radico is well-positioned to capitalize on the structural premiumization of the Indian spirits market despite minor regulatory headwinds in Maharashtra.