Radico Khaitan Eyes 25% Volume Growth in FY26 on Premium Push

Introduction

Radico Khaitan, a prominent player in the Indian liquor industry, is poised to conclude the financial year 2026 with significant momentum. The company has projected a robust volume growth of 20-25%, largely propelled by the strong performance of its premium product lines. Abhishek Khaitan, the Managing Director, confirmed this outlook, highlighting that a strategic focus on premiumisation and brand building over the past several years is now yielding substantial results. This growth is complemented by a clear financial roadmap, with the company on track to become completely debt-free by the financial year 2027, supported by strong internal accruals and cash generation.

A Record-Breaking Quarter

The company's optimistic forecast is backed by a stellar performance in the third quarter of FY26 (October-December 2025), which has been its strongest quarter to date. Radico Khaitan reported a record-breaking volume of 9.75 million cases, marking a 16.7% increase. This surge translated into impressive financial figures, with the highest-ever EBITDA of ₹265 crore, a 45% jump compared to the same period last year. The net profit also saw a remarkable 61% growth, reaching ₹154 crore. A key highlight of the quarter was the 25% growth in the Prestige & Above (P&A) category, underscoring the success of its premiumisation strategy.

The Premiumisation Strategy at Core

The central pillar of Radico Khaitan's growth story is its unwavering focus on the premium segment. Management has indicated that the P&A category is expected to maintain a steady growth rate of around 15% over the next two to three years. This shift towards higher-value products is a deliberate strategy that has involved launching several new luxury brands in the last five years. These include Royal Ranthambore, Sangam World Malt, Rampur Barrel Blush, 'The Spirit of Kashmyr' vodka, The Kohinoor Reserve Indian Dark Rum, and the Virasat Indian Single Malt. These brands are gaining significant traction and are becoming the primary growth engines for the company.

Financial Health and Margin Expansion

Alongside volume growth, Radico Khaitan is focused on improving its profitability. The company is targeting a sustained margin expansion of approximately 125 basis points. This improvement is expected to come from a combination of favourable raw material costs and an increasing sales contribution from its high-margin premium and luxury products. The margin for the third quarter stood at an impressive 17.3%, up from 13.8% at the end of the previous year. The company's strong cash flow, projected to exceed ₹1,000 crore from internal working capital, is a key factor in its plan to eliminate all debt by FY27.

Emerging Growth Segments

Beyond its established brands, Radico Khaitan is capitalizing on emerging consumer trends. The luxury portfolio is projected to grow by an impressive 30-35% and is on track to achieve its ₹500 crore revenue target. Another significant area of focus is the white spirits market. While white spirits constitute only 4% of the Indian market compared to 28% globally, the segment is gaining momentum rapidly. Radico Khaitan holds a leadership position in the vodka category and commands over 50% market share in the Indian craft gin space, positioning it well to benefit from this shift in consumer preference.

Market Position and Investor Confidence

The market has responded positively to Radico Khaitan's performance and strategic direction. The company's stock has gained 32% over the last year, reflecting investor confidence in its growth trajectory. With a current market capitalization of approximately ₹39,629.79 crore, the company has demonstrated its ability to create significant shareholder value. The management has emphasized that the growth is broad-based, with contributions coming from across all states in India, indicating a healthy and sustainable demand for its products.

Conclusion

Radico Khaitan is successfully navigating the Indian spirits market by focusing on premiumisation, innovation, and strong financial discipline. The company's projection of 20-25% volume growth for FY26, coupled with its goal of becoming debt-free, paints a confident picture for the future. With its premium and luxury brands leading the charge and a strong foothold in the growing white spirits segment, Radico Khaitan is well-positioned to continue its upward trajectory and solidify its leadership in the industry.