/** blogpostTitle: "Radico Khaitan FY26: Premiumisation lifts margins, debt heads to zero" blogpostSlug: "radico-fy26" blogpostCoverImageUrl: null blogpostCoverImageDescription: "Ultra realistic corporate finance scene featuring a clean desk with a laptop showing a professional dashboard. The dashboard has three smooth upward trend lines and bar charts representing FY2021 to FY2026 performance: net sales rising to 6,050 crore, EBITDA rising to 1,018 crore, and a separate line showing EBITDA margin improving to 16.8%. A second small panel shows net debt bars declining to 244 crore and ROCE rising to 25%. Neutral office lighting, no company logos, no text labels." blogpostShortTitle: "Radico FY26 premium mix drives margins" */

Radico Khaitan FY26: Premiumisation lifts margins, debt heads to zero

Radico Khaitan ended FY26 with its strongest year on record across volume, revenue, and profitability. On a standalone basis, revenue from operations net rose 24.7% year on year to INR 6,050.4 crore. EBITDA grew faster at 52.4% to INR 1,018.5 crore, lifting EBITDA margin to 16.8% from 13.8% in FY25. Total comprehensive income increased to INR 600.3 crore, up 75.9%, translating into basic EPS of INR 45.01 for the year.

The quarter also closed on a high note. In Q4 FY26, net revenue was INR 1,503.7 crore, up 15.3% year on year, while EBITDA jumped 64.0% to INR 286.3 crore. EBITDA margin expanded sharply to 19.0%, reflecting a stronger product mix, operating leverage, and a benign raw material environment.

Management framed FY26 as an inflection year driven by premiumisation. Prestige and Above volumes continued to scale, supported by brand launches, deeper consumer engagement, and wider distribution. The company also highlighted strengthening return ratios and a cleaner balance sheet, with a stated goal of becoming net debt free by H1 FY27.

Mix shift remains the core driver

Radico’s FY26 performance was shaped by how sharply its portfolio has moved up the value curve. Total IMEI volume for the year rose 22.2% to 38.33 million cases. Within this, Prestige and Above volumes grew 28.5% to 16.70 million cases, while the company’s disclosures show Prestige and Above contributed 70.3% of total IMFL revenue in FY26.

The mix impact is visible in both revenue and margin. For FY26, IMFL revenue was INR 4,355.5 crore, up 29.2%. Within IMFL, Prestige and Above revenue rose 30.9% to INR 3,063.7 crore. Regular and Others revenue grew 28.0% to INR 1,262.5 crore. Non IMFL revenue rose 14.6% to INR 1,694.9 crore.

Realisation per case also reinforces the mix advantage. The company reported FY26 realisation of INR 1,834 per case for Prestige and Above, compared with INR 634 per case for Regular and Others. As Prestige and Above scales, the overall realisation trend becomes more resilient, especially in periods where regular volumes face policy related volatility.

Brands, launches, and the premium portfolio engine

Management commentary leaned heavily on brand building and innovation as the engine behind the premium mix shift. The Managing Director highlighted that the luxury portfolio delivered sales value of INR 475 crore in FY26, and guided for 25% value growth in FY27 from this base. Key luxury and premium brands referenced included Rampur Indian Single Malt, Jaisalmer Indian Craft Gin, Royal Ranthambore Whisky, and newer launches such as Rampur 1943 Virasat Indian Single Malt and The Spirit of Kashmir Luxury Vodka.

Vodka remained a major growth pillar. Magic Moments neared INR 1,500 crore in sales value and reached 8.6 million cases in FY26. The company also launched Magic Moments Flavours of India with new flavours including Jamun SpicyMint, Alphonso Mango, and Thandai. Management stated that further flavour additions are planned, with national expansion of these flavour launches.

In whisky, After Dark crossed 3.1 million cases with over 60% growth in FY26, while Royal Ranthambore delivered over 50% growth and crossed INR 200 crore in net sales value. The company also referenced premium portfolio momentum for 8PM Premium Black Whisky following a refreshed look.

Digital marketing metrics were also disclosed at an aggregate level for FY26 across 11 power brands, with reported reach of 650 million, impressions of 900 million, engagements or views of 600 million, and 2.5 million followers across platforms including YouTube, Meta, and Spotify.

Margins, cost tailwinds, and what could change

Q4 FY26 gross margin expanded to 48.0%, up 453 basis points year on year. The company attributed the improvement to a benign raw material scenario and ongoing premiumisation. It also quantified that raw materials accounted for 225 basis points of gross margin expansion during the quarter.

At the same time, the company acknowledged external risks. Both the presentation and the earnings call referred to geopolitical developments in West Asia as a potential source of input cost and supply chain volatility. On the call, the CFO noted that glass prices had increased around 15% in the last month, though the company stated it had factored this into its cost assumptions.

Marketing investments were described as disciplined. In Q4 FY26, advertising and sales promotion spend was 6.7% of IMFL sales versus 7.6% in Q4 FY25. Management reiterated an expected range of 6% to 8% of IMFL revenues, with quarterly variation depending on launches and brand priorities.

Looking ahead, management guided EBITDA margin expansion of 120 to 125 basis points for FY27 on an annualized basis. It also guided Prestige and Above volume growth of 20% in FY27. On launches, management stated it plans to consolidate recent luxury launches and expand distribution, including taking The Spirit of Kashmir from 10 states to 20 states. It also stated that tequila under D YAVOL Spirits is expected toward the end of FY27.

Balance sheet, capital allocation, and shareholder payouts

Debt reduction was a clear theme in FY26. As of March 31, 2026, total debt stood at INR 331.8 crore and net debt at INR 244.1 crore. Management stated net debt reduced by INR 329.5 crore compared with March 31, 2025 and guided that the company expects to be net debt free by H1 FY27.

Capital allocation priorities were framed as prudent and selective. On the call, management guided FY27 capex in the range of INR 150 crore to INR 175 crore, largely for internal capacity expansion and optimisation. It also clarified that capacity is not a constraint, with about 60% to 65% of bottling outsourced via lease arrangements and 30% to 35% handled in its own plants.

For shareholders, the Board recommended a dividend of INR 9 per share for FY26, up from INR 4 per share in the prior year. Management also stated that the Board adopted a minimum dividend payout policy of 20% of profit after tax.

Takeaways

Radico Khaitan’s FY26 results show the operating leverage that comes with a sustained mix shift toward Prestige and Above brands. Growth was not only strong, but higher quality, with material margin expansion and stronger return ratios alongside a falling net debt number.

FY27 guidance is also clear and numeric: 20% volume growth in Prestige and Above, 120 to 125 basis points EBITDA margin expansion, 25% value growth in the luxury portfolio, and becoming net debt free by H1 FY27. Execution will depend on sustaining premium momentum while navigating state policy shifts and input cost volatility, both of which management acknowledged. The year ahead, as described by management, is positioned as a continuation of the same playbook: premiumisation, innovation-led launches, disciplined marketing, and balance sheet strengthening.