Liquor maker Radico resumes shipments to West Asia as tensions ease

Indian liquor maker Radico Khaitan's exports to the Gulf market are recovering after shipments stalled amid ​regional conflict, with dispatches gradually resuming since late ​April, a top executive said.

The disruption hit consumer spending and ‌duty-free channels across the Gulf, an important market for premium spirits, thanks to a large and wealthy expatriate community.

The maker of Rampur whisky and Jaisalmer gin derives 5 per cent to 6 per cent of sales volumes and 9 per cent to 10 per cent of revenue from exports, of which it does not provide a regional split.

"We could not ship out anything in March and (most of) April. But the good thing is, now slowly and steadily, the shipments are starting back into ‌the area," Sanjeev Banga, president of Radico's international business, said in an interview on Wednesday, referring to exports to the Gulf region in the West Asia.

 

Growth in Africa, Asia-Pacific and airport retail made up for the West Asia slowdown, lifting export sales to a record in the year ended March 31, he said.

Net revenue for ​the year expanded by a quarter to 60.5 billion rupees ($637.58 million), while EBITDA margin ‌expanded to 16.8 per cent from 13.8 per cent, driven by demand for "prestige and above" brands including Royal Ranthambore and Sangam.

Managing Director Abhishek Khaitan expects ​margins ‌to expand by 120 to 125 basis points and revenue to grow ‌over 15 per cent in the fiscal year that started in April, even as higher glass and freight costs persist.

He said premiumisation continues as ‌consumers ​shift to higher-end ​products.

"The regular range is not growing that much... People are drinking less, but they are drinking expensive and refined products," ‌Khaitan said.