Radico Khaitan's Premium Push Delivers Record Profit and Upgraded Outlook
A 76% profit surge on a richer product mix has led Radico to raise its full-year guidance, even as the mass market segment struggles.
Radico Khaitan's Q1 profit jumped 76% YoY as premium brands drove record margins. The company has upgraded its full-year volume growth guidance, betting on sustained premiumisation.
Radico Khaitan’s strategy to sell more expensive spirits is paying off handsomely. The liquor maker started FY27 with a record quarter where profit growth dramatically outpaced sales, powered entirely by consumers trading up to its premium brands.
Revenue for the quarter ended June 2026 rose 10.4% year-on-year to ₹5,868 crore. Profit, however, surged 75.9% to ₹230 crore. The net profit margin expanded by 140 basis points to 3.9%, reflecting a fundamental shift in the business mix.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ1 FY27 | PreviousQ4 FY26 | Same quarter LYQ1 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 5,867.69YoY +10% | 5,182.31 | 5,313.52 |
| Profit (₹ Cr) | 229.60YoY +76% | 179.46 | 130.52 |
| Net Profit Margin | 3.9%YoY +56% | 3.5% | 2.5% |
The Engine: Premium Brands Outpace a Sluggish Market
The entire profit story is built on premiumisation. According to reports from Fortune India and ICICI Securities, Radico’s ‘Prestige & Above’ portfolio saw volumes jump 36% year-on-year. This segment now contributes over 76% of the company’s IMFL sales value, up from 67% a year ago.
Magic Moments vodka, a leader in its category, delivered 43% volume growth. This shift to richer products, alongside some benign raw material costs and selective price increases, drove a staggering 610-basis-point expansion in gross margin to 49.1%.
The Counterweight: A Struggling Mass Market
This premium growth is offsetting a sharp decline in the regular, mass-market segment. Reports indicate regular brand volumes fell 15%, hurt by policy changes in states like Maharashtra and Karnataka and a high base from the previous year.
The divergence highlights a broader industry trend. A report from Vinetur suggests India’s overall spirits market grew only 2% in the June quarter, with whisky volumes slipping, as state tax changes made beer more competitive. Radico’s performance shows it is successfully navigating this by moving its customers up the value chain.
A Stronger Foundation for the Year Ahead
Encouraged by the start, management has raised its full-year guidance. The company now expects its Prestige & Above portfolio to grow over 25% in volume for FY27, up from a prior target of 20%, as reported by CNBC-TV18. It also reiterated a target to deliver an EBITDA margin of around 20% for the year.
Financially, the company is strengthening. It reduced net debt by ₹138 crore in the quarter and is on track to become net debt-free by the second quarter, freeing up future cash flows.
Key Points
- Radico Khaitan’s Q1 FY27 net profit surged 75.9% year-on-year to ₹230 crore, far outpacing a 10.4% rise in revenue.
- The profit leap was driven by a 36% volume jump in the premium ‘Prestige & Above’ portfolio, which now dominates sales value.
- Gross margin expanded by 610 basis points to 49.1%, aided by a richer product mix, stable inputs, and pricing.
- Management upgraded its FY27 premium volume growth guidance to over 25% and targets a full-year EBITDA margin of around 20%.
- The company reduced net debt by ₹138 crore and expects to be net debt-free by Q2 FY27.
Hexa Perspective
Radico’s quarter confirms its premiumisation strategy is working at scale, transforming profitability. The 20.7% EBITDA margin reported by outlets like Fortune India is a structural high, but maintaining it is the new test.
The guidance upgrade signals confidence, yet it relies on the premium momentum continuing to fully offset a weak mass market and potential input cost volatility. With debt nearly cleared, the story is now purely about premium growth sustaining these elevated margins, making execution on brand building and innovation the critical watchpoints.
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