Radico Khaitan targets 125 bps margin rise, 20% P&A FY27

What management flagged in the latest updates

Radico Khaitan has reiterated its premiumisation-led growth strategy while giving specific targets for FY27 across its core premium portfolio. Abhishek Khaitan, Managing Director, told CNBCTV18 that the company expects its Prestige & Above (P&A) category to grow 20% in FY27. He also said the company is targeting margin expansion of 120 to 125 basis points in FY27, after reporting a margin of 16.8% in the previous year. On the luxury portfolio, he indicated that the luxury portfolio, in value terms, should rise 25% in the next year.

Q2 FY26 call transcript: premium brands and volumes in focus

In its disclosed transcript of the Q2 FY26 earnings conference call held on October 30, 2025, Radico Khaitan highlighted a 37.8% volume growth and strong traction across premium brands. The company flagged key brands such as Magic Moments Vodka and Royal Ranthambore Whisky as major contributors to growth. Management reiterated its intention to drive continued double-digit growth in the Prestige & Above portfolio. The company also stated it remains focused on cash flow generation and profitability as it scales higher-margin segments.

FY26 volume growth guidance and premium mix

Radico Khaitan has projected volume growth of 20% to 25% for FY26, driven largely by premium product lines, as per the shared commentary. The P&A category grew 25% in Q3 FY26, underscoring the role of premiumisation in driving the next phase of growth. In another management commentary included in the material, the P&A category was also described as likely to maintain steady growth of around 15% over the next two to three years. Taken together, these statements indicate the company is anchoring growth targets around P&A expansion while pushing the luxury portfolio to a larger share of the overall mix.

Margin trajectory: what the company is targeting

The company’s stated aim is sustained margin expansion, supported by favourable input costs and a rising share of premium and luxury products. Abhishek Khaitan said the company delivered a margin of 16.8% last year and expects margins to grow by 120 to 125 basis points in the current fiscal, based on his CNBCTV18 remarks. Elsewhere in the provided material, Radico Khaitan also referenced a margin of 17.3% for the third quarter, compared with 13.8% at the end of the previous year, showing sharp improvement over that period. Management has also communicated an ambition to improve margins by around 125 basis points on a sustained basis.

Luxury portfolio: growth rates and the ₹500 crore target

Luxury remains a key lever in Radico Khaitan’s strategy, with multiple growth targets and milestones referenced across sources. The company has projected luxury portfolio growth of 30% to 35% and said it is on track to achieve a ₹500 crore revenue target. In a separate PTI interaction included in the provided text, Abhishek Khaitan said the company is “very confident” of achieving ₹500 crore turnover in FY26 for the luxury segment, citing a quarterly turnover of ₹100 crore in Q3 and ₹250 crore turnover for the nine months of FY24. In addition, he said Radico plans to introduce two more luxury brands in the first half of the next fiscal.

Brand pipeline and portfolio choices

Management commentary suggests Radico Khaitan is prioritising premium and luxury, while being selective in lower-margin categories. Abhishek Khaitan said the company’s “hands are absolutely full” with its premium portfolio and indicated that ready-to-drink (RTD) tends to have lower margins due to limited price elasticity. The company has also referenced execution around launches, including “six new brands and eight new SKUs” introduced in Q2 (as per the Q&A summary provided). The brand focus mentioned in the text includes Magic Moments, Royal Ranthambore, and After Dark as growth drivers.

Cash flow and debt-free ambition

Radico Khaitan has repeatedly connected premiumisation to stronger cash generation and balance sheet goals. The company projected cash flow to exceed ₹1,000 crore from internal working capital, as per the material. Management has also stated an ambition to eliminate all debt by FY27, supported by cash generation and profitability improvement.

Operational and state-level triggers cited in the material

The provided text also references state-level factors that management believes can support growth. Andhra Pradesh is mentioned as seeing growth driven by an RTM change and improved availability, with market share described as around 30%. Separately, management commentary also linked growth potential to new retail policies in states such as Uttar Pradesh and Andhra Pradesh that have increased retail outlets.

Key numbers at a glance

Why this matters for investors tracking premium alcobev

The repeated emphasis on P&A and luxury indicates Radico Khaitan is trying to expand growth and profitability at the same time, rather than pursuing volumes alone. Targets such as 20% P&A growth in FY27, 120-125 bps margin expansion, and a ₹500 crore luxury revenue milestone in FY26 are clear operating markers that investors can track quarter by quarter. The strategy also carries execution dependencies, including new brand launches, distribution expansion, and sustaining a premium mix, all of which were repeatedly referenced across management commentary.

Conclusion

Radico Khaitan’s latest commentary keeps premiumisation at the centre, with FY27 targets spanning faster P&A growth, margin expansion, and a step-up in luxury portfolio value. Near-term milestones include the company’s ₹500 crore luxury revenue ambition for FY26 and the planned introduction of two luxury brands in the first half of the next fiscal.