Radico Khaitan Limited — Investor Meet, 04-02-2025: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Radico Khaitan reported an impressive volume growth of 15.3% year-on-year in the third quarter of FY25, with total IMFL volume reaching 8.4 million cases. The Prestige & Above category enjoyed an 18% hike in volume, leading to a 24.7% growth in value terms. Gross margins improved to 43%, driven by premiumization efforts, though they faced a slight quarter-on-quarter contraction linked to food grain inflation.

**Future Outlook and Growth Drivers:** Management remains optimistic about sustaining growth in the Indian alcoholic beverage sector, particularly with the Luxury & Semi-Luxury portfolio. Strong demand signals from domestic and export markets are expected to push net sales in this segment to cross Rs. 500 crores by FY26.

**Order Book and Operational Updates:** Radico recently enhanced its distribution network for its luxury products, which have already crossed Rs. 100 crores in sales for the quarter. Significant growth was noted in Royal Ranthambore Whisky, which is set to expand its presence in the CSD channel in Q4 FY25.

**Analyst Q&A Insights (Detailed):**

- **Revenue and Profitability:** Analysts stressed on the ability to sustain mid-teen growth rates in the P&A segment, with management expressing confidence based on brand performance and market traction.

- **Market Position and Competitive Landscape:** Despite the competitive pressures noted in the market, management highlighted the advantage of established brand recognition over new entrants.

- **Operational Challenges or Risks:** Some concerns were raised about inflationary pressures affecting margin stability; however, management remains optimistic about raw materials stabilizing.

- **Capex and Capital Allocation:** Management plans to maintain an annual CAPEX of around Rs. 100-125 crores over the next few years while focusing on cash flow and reducing debt, aiming for a debt-free status by FY27.

- **Strategic Priorities and Long-Term Vision:** The company is keen on further enhancing its product mix, particularly in the Luxury segment, as a key driver of profitability.

**Market or Regulatory Updates:** No major regulatory challenges were noted, and management emphasized a positive industry backdrop supporting growth.

**Strategic Focus Areas:** The focus is on strengthening brand portfolios, exploring new geographies, and continuing product innovations to capture market trends, indicating robust sentiment from management.

**Investor Insight:** Radico Khaitan's solid performance metrics and growth strategies appear aligned with a **buy** position, especially as market dynamics favor established players over new entrants in the alcoholic beverage space, while risks are being actively managed.