Radico Khaitan expects 20% volume growth in its premium liquor portfolio for FY27, supported by a 120 basis point margin expansion. The company is focusing on white spirits and luxury offerings to capitalize on shifting consumer preferences in the Indian market.
What Happened
Radico Khaitan has outlined growth targets for the 2027 fiscal year, focusing on its premium and luxury liquor categories. The company projects a 20% increase in sales volume for these segments, alongside a target of 120 basis points of margin expansion. This strategy follows a successful fiscal 2026, during which the company reported net sales exceeding ₹6,000 crore and EBITDA of over ₹1,000 crore. The focus is now shifting toward sustaining this momentum through a higher-value product mix and increased market penetration in the white spirits category.
Premiumization And Portfolio Strategy
The company is betting on the trend of consumers opting for higher-value products. Radico Khaitan plans to achieve 25% value growth in its luxury segment. To capture a wider audience, the company recently introduced 'Rampur 1943 Virasat,' an affordable luxury single malt priced between ₹3,500 and ₹4,000. This is designed to sit alongside their existing premium portfolio, which includes multiple expressions of Rampur Single Malt and Jaisalmer Indian Craft Gin, catering to both domestic and international markets.
The Growth Of White Spirits
Management identified a structural shift in Indian consumption patterns toward white spirits, particularly vodka. Data shows vodka’s share of the Indian spirits market has grown to 6% in the first quarter of fiscal 2027, up from a lower base in previous years. Magic Moments Vodka, the company’s flagship brand, continues to hold a dominant market share of nearly 60% in India. The brand saw a year-on-year sales increase of more than 45%, reaching 3.3 million cases, with flavored variants acting as a primary driver for this performance.
Capital Spending And Expansion Plans
Unlike periods of heavy infrastructure investment, Radico Khaitan plans to keep capital spending low for fiscal 2027, estimating it between ₹150 crore and ₹175 crore. This capital will primarily be directed toward maintenance, brand-related activities, malt maturation, and barrel investments rather than new large-scale facility construction. This disciplined approach to spending may help the company maintain cash flow levels as it focuses on brand building and international expansion. Currently, exports account for 8% of the company's total sales value, with products present in 100 countries.
What Investors Should Track
Investors may monitor the execution of these growth targets in the coming quarters. Key areas to watch include the actual margin expansion against the 120 basis point target, the success of the new 'Rampur 1943 Virasat' in gaining market share, and the stability of the vodka segment's demand. Additionally, the company’s ability to scale its international footprint in duty-free outlets remains an important factor for long-term growth. Profitability will depend on managing raw material costs and sustaining consumer demand for premium products in a competitive sector.