Radico Khaitan Eyes Rs 500 Crore Turnover from Luxury Alcobev Brands by FY'26

Boosted by ongoing premiumisation trends in India's alcoholic beverage sector, Radico Khaitan is aiming for Rs 500 crore in sales from its luxury brands by fiscal year 2025-26, Managing Director Abhishek Khaitan said.

Premium Portfolio Fuels Radico's Growth Ambitions​

Radico Khaitan, renowned for premium offerings such as Rampur Indian Single Malt, Jaisalmer Indian Craft Gin, Sangam World Malt, and Spirit of Victory 1999 Pure Malt, achieved significant growth in the current fiscal year. For the first time, the company reported a turnover of Rs 100 crore from its premium segment in the December quarter alone, accumulating Rs 250 crore during the first nine months of FY'24.

Managing Director Abhishek Khaitan stated, "We are very confident that by FY'26, Radico Khaitan will achieve a turnover of Rs 500 crore from the luxury segment alone."

Robust Growth Outlook for Next Fiscal Year​

Radico Khaitan anticipates an overall volume growth of around 8-9% and a value growth of 12-15% for the next fiscal year. Khaitan expects the company's Prestige & Above (PNA) category to outperform with a growth rate exceeding 15%, propelling the company closer to double-digit growth overall.

"This year has been good, and hopefully next year should be much better," Khaitan affirmed.

To further capitalize on the luxury alcobev segment’s rapid growth, Radico plans to launch two additional luxury brands in the first half of the next fiscal year.

Strong Premium Segment Performance Continues​

Radico Khaitan's premium and luxury segments have been driving significant momentum. In addition to Rampur Single Malt and Jaisalmer Gin, its premium lineup includes Royal Ranthambore Whisky, Dazzle Vodka, and Morpheus Blue Brandy. These brands have witnessed consistent high double-digit growth, a trend the company is confident of maintaining.

Growth drivers include rising per capita income, increased disposable income, and a young demographic, with approximately 20 million new entrants to India's drinking-age population annually.

Import Duty Cuts to Have Minimal Impact on Domestic Market​

Responding to recent reductions in import duty on bourbon whiskey to 50%, Khaitan asserted that the bourbon segment remains relatively small in India, making the impact on domestic brands minimal. However, addressing ongoing India-UK Free Trade Agreement (FTA) discussions, he emphasized that a gradual reduction from the current 150% import duty on Scotch whisky could benefit domestic brands.

"Our single malts are now outperforming foreign single malts, despite being priced higher," he explained. A duty reduction on imported bulk whisky would further support cost reduction for local producers, including Radico Khaitan.

Dominant Presence in Defence Canteen Stores Department (CSD)​

Radico Khaitan also plans to sustain growth from its strong presence in the Defence Ministry’s Canteen Stores Department (CSD), where it commands a 26-27% market share in branded Indian Made Foreign Liquor (IMFL). Khaitan highlighted a growing preference among consumers towards Indian brands.

Financial Performance and Expansion Initiatives​

For FY'24, Radico Khaitan reported gross revenue of Rs 15,483.9 crore from operations, selling 45.6 million cases. Its Prestige & Above brands recorded a robust 20.3% year-on-year volume growth.

In the December quarter alone, Radico Khaitan's consolidated net profit surged by 27% to Rs 95.48 crore, alongside an 8% rise in revenue from operations, reaching Rs 4,440.90 crore. Prestige & Above brands accounted for 50.9% of the total IMFL volume, highlighting the company's increasing focus on premiumisation.

Additionally, Radico anticipates further sales growth in the IMFL segment due to favorable changes in liquor retail policies in states like Uttar Pradesh and Andhra Pradesh.

Regarding capacity expansion, Khaitan noted the company has recently invested Rs 750 crore to establish a new greenfield distillery in Sitapur and expanded the capacity of its existing Rampur distillery. "We are done with our major capex; moving forward, investments will be limited to regular maintenance," Khaitan added.

Radico Khaitan currently operates distilleries in Rampur (Uttar Pradesh) and Aurangabad (Maharashtra), with a combined owned capacity of 320 million litres.