# 1. Financial Performance ## A. Key Figures * **Net Revenue:** **>₹6,000 Cr** FY26 Milestone * **EBITDA:** **>₹1,000 Cr** FY26 Milestone * **EBITDA Margin:** **19%** Consolidated (+565 bps YoY) · **20-21%** IMFL Segment · **9%** Non-IMFL Segment * **Gross Margin:** **48%** (+450 bps YoY / +150 bps QoQ) * **Net Debt Reduction:** **₹329 Cr** FY26 reduction ## B. Margin Expansion Drivers * **Premiumization Strategy:** Record margins achieved through a richer portfolio mix and the luxury segment outperforming standard categories, leading to a projected **300-400 bps** value-volume delta. * **Operating Leverage:** Management expects margin sustainability as turnover scales without proportional increases in manpower, supported by **200 bps** of leverage-driven gains. * **Input Cost Dynamics:** Performance bolstered by softer raw material prices and benign input costs, though management is monitoring **West Asia developments** for supply chain risks. * **Pricing Power:** Realizations supported by state-level price increases, contributing an estimated **60 bps** to margin expansion to offset commodity inflation. ## C. Cash Flow & Debt Reduction * **Deleveraging Path:** Robust free cash flow generation has accelerated debt repayment, with the company on track to achieve **debt-free status** by **H1 FY27**. * **Subsidiary Self-Sufficiency:** The Maharashtra Joint Venture is now fully self-funded via internal accruals, requiring no further capital infusion for brand-building. ## D. Return Ratio Improvements * **Capital Efficiency:** Enhanced asset utilization and higher operating profits have driven significant upticks in **ROE and ROCE**. * **Scalability:** Further capital efficiency gains are anticipated as the high-margin **Prestige & Above** and luxury portfolios continue to scale. --- # 2. Product & Portfolio Performance ## A. Key Figures * **Luxury Portfolio Sales:** **₹475 Cr** current value (+25% FY27 value guidance) * **P&A Segment Volume:** **28%** growth (+20% FY27 volume guidance) * **Magic Moments Vodka:** **₹1,500 Cr** sales value · **0.86 Cr** cases (+21% annual volume) * After Dark Whisky: 3.1 million cases (+60% annual growth) ## B. Prestige & Above (P&A) Growth * **Premiumisation-Led Mix:** Robust double-digit volume growth in the P&A segment is offsetting declines in regular volumes caused by policy shifts in Maharashtra and Karnataka. * **Brand Momentum:** Growth is anchored by the Magic Moments family and exceptional performance from After Dark and 8PM Premium Black, the latter benefiting from a recent **repackaging initiative**. * **Strategic Volume Targets:** Management aims to add **0.35 crore cases** in the P&A category next year, capitalizing on the consumer trend of "drinking less but better." * **Channel Strength:** Royal Ranthambore Whisky saw significant expansion, fueled by high demand in both civil and CSD channels and a conservation-themed **Limited Edition Pack**. ## C. Luxury Portfolio Scaling * **Aggressive Scaling Targets:** Management plans to scale the luxury segment from its current base to **₹1,000 Cr**, driven by high-conviction brands like Rampur and Jaisalmer. * **Distribution Expansion:** Strategy involves doubling the footprint of Virasat Indian Single Malt and The Spirit of Kashmyr from **10 to 20 states**. * **Market Penetration:** Growth will be supported by increased penetration in **on-trade outlets** and leveraging price rationalization benefits in key markets like Karnataka. ## D. Magic Moments & White Spirits Leadership * **Category Dominance:** Magic Moments has solidified its leadership, with recent quarterly value growth reaching **28%** as it nears a major revenue milestone. * **White Spirit Opportunity:** Management identifies a massive "white spirit" headroom, noting India’s **4.5%** category share versus **~29%** globally, positioning vodka as a primary long-term driver. * **Regional Strategy:** To counter industry-wide volume declines in Maharashtra, the company is deploying **Magic Moments Luxury (MML)** through its RNV joint venture. ## E. Innovation & Consumer Engagement * **Flavor Disruptions:** Expansion focuses on the "Flavors of India" line (Jamun, Mango, Thandai) and a planned **Tequila launch** under the D'YAVOL brand by year-end. * **GenZ Targeting:** Focus remains on white spirits and innovative packaging, such as **"hipster" pocket packs**, to mitigate glass dependency and align with trendy consumption habits. * **Portfolio Discipline:** Despite industry trends, the company has **no plans** to enter the non-alcoholic or low-alcoholic beverage segments. --- # 3. Operating & Segment Mix ## A. Key Figures * **IMFL Volume:** **0.95 Cr cases** Q4 FY26 (+4%) * **Revenue Mix:** **~70%** IMFL Saliency · **8% to 9%** International Contribution * **Market Share:** **24% to 25%** UPML/UPCL combined * **Segment Growth:** **30%** Regular Segment (Full Year) · **3% to 5%** Next Year Regular Category · **7% to 8%** Non-IMFL Industry Growth ## B. IMFL vs Non-IMFL Saliency * **Strategic Pivot:** Management expects a gradual shift toward IMFL as bulk spirit is increasingly diverted for **captive consumption**, reducing the top-line contribution of non-IMFL segments. * **Market Leadership:** Secured the **No. 1 position** in the Uttar Pradesh IMFL market, supported by a forward-looking growth guidance of **20%** for the core IMFL business. * **Premium Momentum:** Volume gains in the most recent quarter were primarily driven by sustained strength in the **Prestige & Above** category. ## C. Regular & Medium Liquor Trends * **Segment Recovery:** Despite quarterly degrowth due to policy shifts, the Regular segment is projected to stabilize with **3% to 5%** volume growth in the coming fiscal. * **New Market Entry:** Targeting a **10% share** in the Maharashtra Medium Liquor (MML) category following a recent brand launch and positive initial consumer traction. * **Stable Positioning:** Focus remains on maintaining a dominant quarter-share in UP country liquor markets through "normal" market growth rather than aggressive expansion. ## D. Geographic & International Strategy * **Regional Resilience:** While the broader IMFL industry in Maharashtra declined by **20% to 25%** due to tax/policy changes, Radico’s Premium and Vodka portfolios remained stable. * **Global Retail Expansion:** Strategic priority to double airport presence from **50 to over 100 locations**; domestic hyper-growth is currently offsetting the relative top-line contribution of exports. * **Export Outlook:** Management anticipates a recovery in the currently soft US market, maintaining a positive long-term outlook for luxury exports. --- # 4. Manufacturing & Supply Chain ## A. Key Figures * **Energy Mix:** **90%** Biofuel-driven power/fuel at Sitapur and Rampur plants * **Bottling Mix:** **30%–35%** In-house production · **60%–65%** Outsourced/Lease arrangements * **Planned CAPEX:** **₹150 Cr – ₹175 Cr** Focused on capacity and efficiency ## B. Operational Strategy & Supply Chain * **Energy Independence:** High biofuel utilization has achieved captive self-sufficiency, insulating operations from LPG supply volatility. * **Supply Chain Control:** Management maintains rigorous oversight of third-party units by procuring all raw materials internally to de-risk the **20% growth outlook**. * **Prudent Capital Allocation:** Investment strategy prioritizes maintenance and efficiency to ensure capacity remains ahead of demand without over-leveraging. --- # 5. Strategic Initiatives & Distribution ## A. Key Figures * **Marketing Spend:** **6% to 8%** of revenue * **Dividend Payout:** **20%** of PAT (Minimum) * **Target ROCE:** **20% to 25%** for new capital allocation ## B. Brand Advocacy & Distribution * **On-Trade Scaling:** Strategic focus on FY27 expansion through airport presence and key account partnerships to bolster luxury portfolio visibility. * **Advocacy-Led Growth:** Plans to execute approximately **1,000 advocacy sessions** to deepen brand penetration within the on-trade segment. * **Marketing Investment:** Absolute marketing spend to rise in tandem with robust top-line growth to support business scaling and new launches. * **Competitive Positioning:** Leveraging distribution scale to capture market share from smaller players in the MML segment. ## C. Premiumization & Consumer Engagement * **Portfolio Discipline:** Management explicitly ruled out entry into **RTD or low-alcohol categories**, prioritizing the existing premium-led innovation roadmap. * **Demographic Targeting:** Utilizing experiential digital campaigns and on-trade activations to enhance connectivity with younger consumer cohorts. ## D. Capital Allocation Policy * **Shareholder Returns:** Implementation of a formal dividend policy signals high confidence in long-term cash flow generation. * **Investment Hurdle:** Strict prioritization of organic growth; acquisitions are secondary and subject to a high **20-25% ROCE** threshold. --- # 6. Risks & Regulatory Factors ## A. Key Figures * **Glass Price Inflation:** **15%** increase over the last month * **US Export Tariffs:** **10%** on luxury portfolio * **Tariff Impact on Retail:** **$5 to $6** per bottle price increase ## B. State Excise Policy Changes * **Strategic Market Monitoring:** Management is tracking potential regulatory shifts in Bihar and West Bengal; a reversal of prohibition in Bihar would allow the company to reclaim a historically large consumer base. * **Premiumization Tailwinds:** Expected price rationalization in Karnataka is projected to further increase saliency for the **Premium & Above** portfolio, including Rampur and Jaisalmer. * **Inflation Mitigation:** Price increases have been secured in **seven to eight states** to offset rising industry costs, with further revisions currently under negotiation. ## C. Input Costs & Supply Chain * **Margin Resilience:** Despite double-digit spikes in glass costs, management maintains a positive outlook on margin expansion by factoring inflation into current costing models. * **Operational Continuity:** Supply chain stability and margin targets remain contingent on the absence of geopolitical disruptions to **LPG supplies** or bottle production. ## D. Global Trade Dynamics * **Minimal Tariff Sensitivity:** Proposed US import levies are deemed non-substantial for the luxury segment, as the resulting retail price hike is not expected to deter high-end consumers. * **Export Evaluation:** The company is currently assessing the six-month impact of global tariffs to refine the growth trajectory for the **FY2026** export segment. --- # 7. Guidance & Outlook ## A. Key Figures * **P&A Volume Growth:** **20%** FY27 Target · **20% to 25%** 2-3 Year Outlook * **EBITDA Margin Expansion:** **125 bps** FY27 Target · **100 to 125 bps** Range * **Shareholder Returns:** **20%** Minimum Dividend Payout Policy ## B. Volume & Value Targets * **P&A Portfolio Momentum:** Management maintains high confidence in robust premium volume targets, supported by new flavor launches and the untapped potential of nascent brands. * **Sustainable Growth Profile:** Long-term guidance suggests a steady double-digit trajectory for both top-line revenue and total volumes over the coming years. ## C. Margin Expansion Guidance * **Profitability Outlook:** Following a massive **565 bps** quarterly improvement, the company targets steady annualized margin expansion, supported by operating leverage. * **Macroeconomic Variables:** Margin guidance is framed as conservative, factoring in potential tailwinds from the **India-UK Free Trade Agreement (FTA)** against global geopolitical and cost pressures. * **Cost Efficiency:** Employee cost growth is projected at a **15% CAGR**, a level expected to be offset by significant operating leverage to protect margins. ## D. Debt & Capital Allocation * **Deleveraging Roadmap:** The company is on a clear path to becoming debt-free by **FY2027**, signaling a transition toward a stronger balance sheet. * **Capital Discipline:** Future dividend increases beyond the established floor are contingent on free cash flow generation and a commitment to improving return ratios.