FY2016 was a year of consolidation at Radico Khaitan. We focused on our core strengthsand delivered a sustained profitable financial performance in an economic environmentwhich was challenging and volatile. Our longstanding focus on premiumization coupled withcost optimization efforts resulted in improved profitability. We delivered strong EBITDAmargin improvement of 165 bps.
Premiumization and innovation are at the core of our growth strategy. Over the pastfive years we have launched new products or variants only in the premium category.Innovation for us applies to all aspects of our business: new products and enhancedcustomer experience manufacturing R&D supply chain marketing HR and otheroperations. It is our habit of innovation that has enabled us to create a strong brandidentity in the spirits industry in India.
At Radico Khaitan management has dedicated their efforts towards ongoing processimprovements. Our objective is to continue to improve our efficiency with respect to ourprocesses and cost management across all operations. This enables us to take swift actionand channelize resources in the right areas for growth.
Customer connect or knowledge about the consumers choices and preferences hasbeen our key strength. This has led to the success of our key brands. Capitalising on thesuccess of our Magic Moments premium vodka and to address the demand potential in theready-to-drink market segment we launched Magic Moment Electra during FY2016. From theproduct flavour to bottle design and packaging everything has been conceptualised andfinalised after extensive research. We expect Electra to contribute to our growth in ameaningful way in the years to come.
Over 20 million people enter the drinking age every year. This paves way forsignificant growth opportunities for our brands which are already well established. We aimto further leverage the growth potential of the Indian spirits industry through our strongsupply chain network and balanced geographic presence capturing all relevant channelsacross all markets to reach our consumers.
We have all the ingredients in place for a perfect cocktail of success!
Dr. Lalit Khaitan
Chairman & Managing Director