Radico Khaitan’s record carries an unbroken six-year run of unqualified audit opinions and a clean capital-market compliance sheet. Three things deserve attention: two immovable properties worth ₹59.40 crore remain unregistered for multiple years while the audit trail in the primary accounting software has been disabled or unconfirmed since FY2024, disputed tax demands exceed ₹224 crore with a key ₹73.46 crore GST matter advancing to an adverse appeal rejection, and a large non-cash vendor-financing arrangement obscures the true operating cash conversion.
Key findings
- Two properties worth ₹59.40 crore are unregistered but title was confirmed by lenders
Major- Two immovable properties at Rampur (₹42.49 crore) and Sitapur (₹16.91 crore) are not registered in the company’s name as of 31 March 2026, unchanged from FY2025. The auditor directly obtained title confirmations from the respective lenders for these properties, which are mortgaged as security for borrowings. The audit trail feature was not enabled at the database level for the full financial years FY2024, FY2025, and the period 1 April 2025 to 14 December 2025 in FY2026. From 15 December 2025 the company migrated to a cloud-based software, but the auditor could not confirm the audit trail operated thereafter because no Type 2 ISAE 3402 report was available. - Disputed tax demands exceed ₹224 crore, with a ₹73.46 crore GST demand advancing to an adverse appeal rejection
Major- The Joint Commissioner (State Tax), Moradabad issued a GST demand of ₹73.46 crore on ENA on 20 June 2023, and the Additional Commissioner Appeals rejected the company’s appeal on 22 September 2025. A separate DGGI demand of ₹117.95 crore for surplus income from contract bottling units is stayed by the Karnataka High Court. Other demands include ₹18.23 crore in excise duty on alcohol lost in the Rampur plant fire and approximately ₹14.65 crore in GST on job work. - Revenue recognition is a recurring Key Audit Matter with persistently high receivables
Minor- Revenue recognition and trade receivables have been a Key Audit Matter in every annual report from FY2020 through FY2026. The Holding Company sold certain trade receivables to banks on a non-recourse basis and de-recognised them in FY2025 and FY2026. - A large non-cash vendor-financing arrangement obscures true operating cash conversion
Minor- The company reported non-cash payments by a finance provider to vendors of ₹1,018.52 crore in FY26 and ₹1,330.39 crore in FY25, with corresponding settlements treated as operating cash outflows. Cumulative CFO of ₹3,036 crore covered 66% of cumulative EBITDA of ₹4,575 crore over the ten years to FY26. Free cash flow turned positive to ₹189 crore in FY25 and ₹504 crore in FY26 after a debt-funded capex cycle pushed it to negative ₹466 crore in FY23. - A two-tier subsidiary structure acquired in FY2022 is being collapsed while three new entities were added in FY2026
Minor- The company acquired 100% of Radico Spiritzs India Private Limited in FY2022, which held seven step-down subsidiaries with total assets ranging from ₹188.48 lakh to ₹1,017.07 lakh each and nil revenue in FY2025. On 29 October 2025 the Board approved a Scheme of Amalgamation to merge all eight entities into Radico Khaitan Ltd, pending NCLT sanction. During FY2026 the Board approved a 47.5% stake each in two overseas joint ventures for ₹38.86 crore and incorporated a new wholly-owned subsidiary in Scotland on 16 March 2026. - Promoter-family directors drew steady multi-crore remuneration with moderate shareholder dissent
Minor- Dr. Lalit Khaitan and Mr. Abhishek Khaitan each received ₹12.00 crore in remuneration in FY2025 and FY2024, unchanged from FY2023 and FY2022. At the September 2022 AGM, their re-appointments drew 8.57% and 8.37% votes against, with 12.55% and 12.10% of public-institution votes cast against. At the August 2025 AGM, the resolution to approve Mr. Shivraj Khaitan holding an office of profit drew 20.33% votes against, with 44.27% of public-institution votes cast against.
What to watch
- ENA GST appeal. Filing and outcome of the appeal before the GST Appellate Tribunal against the ₹73.46 crore demand, following the High Court’s disposal of the writ petition on 12 January 2026.
- Amalgamation sanction. NCLT Allahabad Bench sanction of the Scheme of Amalgamation of eight transferor companies, pending as of the FY2025-26 Annual Report.
- Property registration. The management is in the process of registering the two unregistered properties at Rampur and Sitapur; no timeline has been disclosed as of the FY2026 Annual Report.
- Audit trail confirmation. The audit trail remains unconfirmed for the cloud-based accounting software from 15 December 2025 onwards; the auditor will require a Type 2 ISAE 3402 report to verify this.
- Vendor-financing arrangement. Whether the finance-provider-to-vendor payment arrangement (₹1,018.52 crore non-cash in FY26) continues, to be assessed in the next annual report.
Bottom line: This is a disclosed and audited record with strengthening cash flows, zero promoter pledge, and a clean capital-market compliance sheet. The risk sits in two places: the unresolved property registrations and disabled audit trail, which together weaken assurance over asset ownership and transaction integrity, and the ₹224 crore disputed tax demands where one major matter has already advanced to an adverse appeal rejection. Watch the GST Tribunal appeal and the property registration timeline.