Radico Khaitan posted a 66% rise in Q2 FY27 net profit to ₹230.9 crore, driven by strong demand for its premium liquor brands. The company's 'Prestige & Above' segment volume grew by 35.8%, leading management to raise its full-year volume growth guidance to 30%. Investors may track whether this premium shift sustains margins against potential fluctuations in raw material costs or state excise policies.
Radico Khaitan has reported a strong performance for the second quarter of fiscal year 2027, with net profit rising 66% year-on-year to ₹230.9 crore. The company’s revenue also grew by 17% during the same period, supported by a clear shift toward higher-value products in its portfolio.
Premiumization Strategy Boosts Margins
The company’s operational efficiency has improved, with EBITDA rising 51% to ₹356.5 crore. This has resulted in a wider EBITDA margin of 20.4%, compared to 15.8% in the previous year. This improvement reflects the company's strategic focus on the 'Prestige & Above' category, which includes established brands like Magic Moments Vodka and 8PM Whisky. By prioritizing products with higher price points and margins, Radico Khaitan has successfully reduced its reliance on lower-margin, mass-market segments. This shift has also served as a buffer against cost pressures that often affect the wider spirits industry, such as volatile raw material prices for ENA (Extra Neutral Alcohol).
Growth in Premium Volumes
The 'Prestige & Above' segment has been the primary growth engine for the firm, with volumes climbing 35.8% to 5.28 million cases in the quarter. These premium offerings now represent 53.7% of the company's total IMFL (Indian-made foreign liquor) volumes, up significantly from 43.6% in the same quarter last year. This strong demand has prompted management to upgrade its guidance, with the company now expecting 30% volume growth for its premium portfolio in FY27. The firm is also expanding its international presence, specifically in the travel retail sector, to diversify its revenue streams.
Sector Context and Investor Monitorables
While the company has reported strong growth, the liquor sector in India remains sensitive to regulatory changes. State governments often adjust excise duties and taxation policies, which can impact consumer demand and company profitability. Additionally, the industry is closely linked to the pricing of raw agricultural inputs. For investors, the key monitorable will be whether Radico Khaitan can maintain its 20% EBITDA margin target while continuing to gain market share in a competitive landscape. The company’s ability to execute its expansion plans in the travel retail space and maintain the momentum of its premium brands like After Dark Blue will be important factors to watch in the coming quarters.