Brokerages cheer Radico Khaitan's Q3 show; premium push, margins shine

Brokerages turned upbeat on Radico Khaitan after the liquor maker delivered a robust set of December quarter of financial year 2026 (Q3FY26) results, marked by strong premium-and-above (P&A) growth, record volumes, sharp margin expansion and steady progress on debt reduction. 

 

Analysts highlighted the company’s consistent execution, success in premiumisation and improving balance sheet as key drivers supporting optimism on the stock’s medium-term prospects.

 

Radico Khaitan reported a 19.5 per cent year-on-year (Y-o-Y) rise in revenue to ₹1,550 crore, aided by strong momentum across both its P&A and regular brand portfolios. Total IMFL volumes grew nearly 30 per cent Y-o-Y, making it the company’s highest-ever quarterly volume performance. Brokerages noted that the growth was broad-based, aided by favourable mix, benign raw material costs and operating leverage.

 

 

 

ICICI Securities said Radico Khaitan delivered its best-ever quarterly performance in terms of P&A volumes, sales and earnings before interest, tax, depreciation and amortisation (Ebitda), underlining its sector-leading execution. According to the brokerage, P&A volumes and value rose 25.9 per cent and 29.4 per cent Y-o-Y, respectively, while regular brands staged a sharp recovery, clocking 32.8 per cent volume growth. The turnaround in regular brands was largely attributed to the route-to-market (RTM) change in Andhra Pradesh, which improved availability and traction, particularly in the mass segment.

 

JM Financial shared similar views, describing the quarter as another instance of “stellar execution.” It pointed out that overall volume growth of about 16.6 per cent annually exceeded expectations, with IMFL sales up 27.6 per cent Y-o-Y. P&A volumes came in close to the 5 million cases mark, underscoring the long-term success of Radico’s premium strategy. JM Financial noted that P&A volumes have nearly tripled since Q3FY19, highlighting the structural shift in the company’s portfolio.

 

Margins were a key positive surprise, analysts said. Gross margin expanded sharply to 46.5 per cent, aided by stable ENA and grain prices and a richer product mix. ICICI Securities estimated that benign raw material prices alone contributed around 225 basis points of margin expansion during the quarter. Ebitda rose over 45 per cent Y-o-Y to ₹2.7 billion, with margins improving to 17.3 per cent, supported by operating leverage and controlled overheads, despite higher advertising and sales promotion (A&SP) spends.

 

Both brokerages flagged strong profitability growth, with PAT surging over 70 per cent Y-o-Y to about ₹160 crore. Lower interest costs, stemming from debt reduction, further supported earnings. Radico reduced net debt by ₹210 crore year-to-date (Y-T-D) in FY26, taking net debt down to about ₹365 crore. Analysts expect the company to turn net-debt-free by FY27, backed by healthy operating and free cash flows.

 

 

On the strategic front, brokerages welcomed Radico’s continued focus on expanding its premium and luxury portfolio. During the quarter, the company launched Rampur 1943 Virasat Indian Single Malt and the 1965 Spirit of Victory Espresso Coffee Rum, reinforcing its credentials in the high-end spirits space. JM Financial also highlighted the board’s approval to incorporate a wholly owned subsidiary in Scotland, aimed at distillation, maturation and trading of Scotch whisky. This move is seen as a long-term play to strengthen Radico’s international presence and premium whisky ambitions.

 

Moving forward, management commentary around stable to benign input costs and disciplined brand investments has added to confidence. ICICI Securities reiterated its constructive stance, maintaining an ‘Add’ rating and revising its target price to ₹3,400, citing strong execution and the company’s ability to identify and scale brands in white spaces. JM Financial maintained its ‘Buy’ rating, pointing to sustained premiumisation, improving margins and balance-sheet strength.

 

 

That said, brokerages flagged risks including any slowdown in P&A volume growth, volatility in raw material prices and regulatory changes. 

 

Overall, analysts believe Radico Khaitan’s Q3 performance reinforces its premium-led growth story, positioning it well for consistent earnings expansion over the coming years.