Radico Khaitan Q3 Profit Soars 62%, Shares Surge 5%

Introduction

Radico Khaitan Ltd. announced a remarkable financial performance for the third quarter of fiscal year 2026, ending December 31, 2025. The liquor manufacturer reported a significant 61.6% year-on-year increase in net profit, which propelled its shares up by over 5% in trading on January 22, 2026. The results reflect strong consumer demand, particularly in the premium segment, and improved operational efficiencies.

Record Quarterly Financials

The company's net profit for Q3 FY26 surged to Rs 155.1 crore, a substantial rise from the corresponding period in the previous fiscal year. This growth was supported by a 19.5% increase in net revenue from operations, which stood at Rs 1,546.7 crore. The performance marks one of the company's best-ever quarters across key financial metrics, signaling robust health and strategic execution. Profit before tax for the quarter was Rs 206.6 crore, up 59% from Rs 129.9 crore in Q3 FY25.

Volume Growth Underpins Revenue

A key driver behind the strong revenue figures was a significant increase in sales volume. Total Indian-Made Foreign Liquor (IMFL) volume grew by 16.7% year-on-year to reach 9.75 million cases. The growth was particularly pronounced in the high-margin 'Prestige & Above' segment, which saw volumes increase by 25.9% to 4.62 million cases. This highlights the success of the company's premiumization strategy. The 'Regular & Others' category also demonstrated a strong recovery, with volumes growing by 32.7% to 4.70 million cases, continuing a growth trajectory that began in the previous fiscal year.

Enhanced Operational Efficiency

Radico Khaitan's operational performance saw considerable improvement during the quarter. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) improved by 44.9% YoY to Rs 265.4 crore. This led to a significant expansion in the EBITDA margin, which grew by 300 basis points to 17.2%. Management attributed this margin expansion to a stable raw material environment, enhanced operating leverage, and a favorable product mix led by premium brands. Total expenses for the quarter rose by a modest 14.4% to Rs 1,333.2 crore, indicating effective cost management relative to revenue growth.

Management Commentary and Strategic Focus

Dr. Lalit Khaitan, Chairman and Managing Director, stated that the Indian spirits sector continues to show strong momentum, driven by steady demand and an accelerating shift towards premium products. He described the quarter as a "remarkable step-up" in the company's performance. Managing Director Abhishek Khaitan added that recent premium and luxury launches, such as Rampur 1943 Virasat Indian Single Malt, are gaining early momentum. The company remains focused on building its luxury brand portfolio and scaling its presence globally for sustained long-term growth. The management also highlighted a reduction in net debt by Rs 208.5 crore since March 31, 2025, strengthening the company's balance sheet.

Market Response and Industry Context

Investors responded positively to the strong earnings report. Radico Khaitan's shares jumped 5.49% to close at Rs 2990.40 on the day of the announcement. The performance stands out in an industry where peers have faced challenges. The broader trend of premiumization in the Indian market is benefiting companies like Radico Khaitan, which have a strong portfolio of premium brands like Magic Moments Vodka, Jaisalmer Gin, and Rampur Single Malt. This trend is fueled by rising disposable incomes and evolving consumer preferences for higher-quality spirits.

Conclusion

Radico Khaitan's third-quarter results for FY26 underscore a period of exceptional growth, driven by a successful premiumization strategy, robust volume increases, and disciplined cost management. The significant jump in profitability and revenue, coupled with a positive market reaction, positions the company strongly for future growth. With a clear strategic focus on its premium portfolio and expanding global reach, Radico Khaitan appears well-equipped to capitalize on the favorable trends within the Indian spirits industry.