Radico Khaitan shares closed at Rs 4,535.10 after JM Financial raised its target price to Rs 5,190. The move reflects optimism regarding the company's growth in the premium alcohol segment. Investors are now tracking how the firm manages raw material inflation while hitting its FY27 margin targets.
Radico Khaitan shares moved higher on Friday, closing at Rs 4,535.10 on the National Stock Exchange. The stock saw an intraday high of Rs 4,600, reflecting a 2.63% gain as the market responded to an updated outlook from JM Financial. The brokerage firm maintained its positive view on the stock and increased its target price to Rs 5,190 from the previous Rs 4,955.
Premium Strategy and Growth Outlook
The company’s focus on the 'Premium & Above' (P&A) category is a central theme for current investor sentiment. This segment is generally more profitable than the mass-market liquor business. Analysts are projecting a volume growth rate of over 20% for the company between FY26 and FY29. Much of this expectation is tied to brand expansion, specifically the rebranding of '8PM Premium Black' and efforts to secure higher shelf space in luxury hotel chains and travel retail outlets. For investors, this shift toward higher-value products is a key metric to monitor, as it helps the company differentiate its portfolio from budget-tier competitors.
Managing Input Cost Challenges
While the growth outlook remains positive, the spirits industry faces consistent pressure from rising costs. Specifically, the price of extra neutral alcohol—a core ingredient in liquor production—and packaging materials can squeeze profit margins. The company aims to offset these pressures through a strategic product mix, where higher-margin products help balance the impact of rising material costs. Management has set clear guidance for FY27, aiming for a 25% growth in premium volume and a 20% EBITDA margin. Achieving these targets will depend heavily on the company's ability to maintain its pricing power amidst a highly competitive landscape.
Investors will be tracking several factors in the coming quarters. The primary focus will be on whether the company can successfully translate its premium brand expansion into actual volume growth without sacrificing margins. Additionally, tracking how the company navigates raw material inflation will be critical. Given that the liquor industry is subject to complex and varying state-level policies in India, regulatory changes and tax structures will also remain important factors for shareholders to follow.