Radico Khaitan Limited analyst Q&A

The first question is from the line of Harit Kapoor from Investec. Please proceed.

Just a couple of questions from my end. So, on the P&A side, again, last couple of quarters, the trajectory has actually accelerated. So if you can just talk about in the first half this year, which are the brands have kind of driven this 1H growth, because if you look at in absolute volumes also, you've seen a dramatic jump up, 40% and 22%. And Andhra is not a very large P&A market. So it's really happening from core markets, core brands. If you could just talk a little bit about which are the key brands that are driving this upward? That's my first question.

First of all, what is most important is that the P&A segment is largely being driven by brands like Magic Moments, which is seeing a huge growth. It's growing at about 20% and the best part about the Magic Moments family is that, in FY24, we did 6 million cases. FY25, we did 7 million. And this year, the rate at which it is growing, we feel that we will be adding another 1 million. So, our vision is over the next 3 years to see Magic [Moments] come up to 10 million cases, one. Two, Royal Ranthambore brand has grown by 67% plus in Q2, which is a huge growth. This brand, despite its premium positioning over the largest selling scotch whisk y, has gained traction and acceptance by the consumers in India and quite a few markets overseas as well. So Royal Ranthambore, Magic Moments and then, After Dark. 5 | P a g e Q2 FY2026 Earnings Call Transcript After Dark is a brand which like Abhishek mentioned, in FY 25, we did 1.9 million cases. And this year, we have already , in the first half done 1.5 million cases. This is a huge segment of 75 million cases, and our ambition to take this forward, get dominant market share continues. So, these are 3 most important brands that are driving the growth. Over and above all this, this is all going to be fueled by the fact that we've launched 6 new brands in Q2, which is Morpheus Whisky, the Spirit of Kashmyr 2 variants, Natural and Saffron and then flavors of India in the Magic Moments category, which is Mango, Thand ai and Jamun SpicyMint. And coupled with all this, we have also launched 8 new SKUs in the Prestige upwards, semi-luxury and luxury, which are the small SKUs of Rampur Double Cask, Sangam World Malt, 1999 Spirit of Victory, Magic Moments Pink Vodka and After Dark Blue celebration pack and pocket pack. These are all small packs that are going to fuel the consumer drive of our Prestige & Above brands. And this is going to, therefore, reflect in the times ahead in terms of growth.

Great. Fantastic. And the second question was on the luxury and semi- luxury portfolio. I think last year, you mentioned Rs. 340 crores number for the full year. And this year, you have had a target of Rs. 500 crores. So, I just wanted to know, obviously, H2 is typically higher for the business , overall, but you think you're on track to hit this Rs. 500 crores kind of target?

As Amar said, our Royal Ranthambore, Rampur, Jaisalmer, Sangam, all brands are growing. We are well in target to achieve the Rs. 500 crores.

Fantastic. Those were my two questions. I'll come back in a queue. Thank you.

The next question is from the line of Anuj from Antique Stock Broking. Please proceed.

Hi team, good afternoon. Congratulations on the great set of numbers. Just one question from my side. During 1Q, the management highlighted that there's been an improvement in working capital on account of UP's reforms. So, when I was looking at the 1H balance sheet that translates to roughly a 15 to 20 days improvement. So, we see further improvement of the working capital through 2H? 6 | P a g e Q2 FY2026 Earnings Call Transcript

Working capital has improved, as in UP, we have unlocked value because of the duty being now funded by the wholesaler . But it's a cyclical thing, sometimes the stocking of raw material happens to take advantage of the cycle. The debt reduction has been lower than it was in Q1 of this year, mainly on account of 2 large payments, one is investment in D’YAVOL Spirits and another is Dividend. We are very conscious about working capital management and we allocate resources as per the requirement of the business. We will continue to reduce our debt. In H2 , you will see further deceleration of our loans. So, we are confident about it.

I was more specifically on the working capital, could you quantify the benefit that is coming from the UP's reform?

Benefit out of working capital is reflected in the interest cost. We can't talk quarter-on-quarter basis, but by next quarter and next year with this company will be debt-free with the free cash flow.

Okay, thank you.

The next question is from the line of Abneesh Roy from Nuvama. Please proceed.

Congratulations on very good numbers. My first question is on Andhra. So firstly, ex of Andhra, how has been the growth? Second, other players are also talking very positively on the Andhra market and first year has been great. If you could talk about ind ustry growth rate in second year, do you expect again strong growth even in second year, given first year generally, it's opening up. So obviously, you are starting from almost negligible base. And a related question is, you said you have claimed leadership position in Andhra. So specific things, what has helped in that market?

First of all, we have earlier also mentioned. A lot of states in India are contemplating following the UP-excise model. And what does it mean? It means retail should be free and left to the consumer to choose what he wants to buy. The great thing that has been done by t he Andhra government is that they've opened up the retail to private. They've made brands available at the shelf and the consumer is free to choose products at different price points. Radico has obviously gained from this policy, like we are strong in UP, we have also become strong in Andhra Pradesh, primarily because of 7 | P a g e Q2 FY2026 Earnings Call Transcript availability, and as a national company, a lot of marketing activities. This growth that has happened in Andhra is likely to sustain in the year ahead as well because we are aware that the government is progressively looking at how to improve upon the existing policy. We feel that this growth will continue and our brands will continue to flourish, more so in the premium segments.

Sure. Second is your growth has been extremely commendable. You have been extremely successful in new launches, new brands. Specific question is in terms of overall market, white spirits seems to be growing faster. So is there any formal study that the yo uth and the women, they are taking more towards the white spirits. And within white spirits, I'm sure you must have gained share given such a strong performance. And in the overall spirits also, if you could discuss white spirits, how much is the gain in market share in the last 2 years?

Okay. This is a question that I would have loved somebody to ask. First of all, it's very important for us to mention that white spirits is the fastest growing segment and stil l is less only 4% of the IMFL industry. Whereas globally it is in excess of 25% of the spirits industry. Two, Magic Moments has achieved an incredible market share of 85% [in the relevant price p oint segments] in the white spirits market. We have continued to grow this market, continue d our marketing initiatives. And the Gen Z, especially have now taken to Magic Moments as an all-time drink and that means even the female clientele is also joining this drink. Magic Moments is the brand of the future in white spirits, and we continue to dominate it with a formidable market share of 85%. We will continue to upgrade the offerings in the Magic Moments series like we have done with the flavors of India.

Sure. Last quick question. Now coming to a difficult state for the industry. So Maharashtra, what we have picked up and the beer company confirmed this, that there is a double-digit volume de-growth for the beer and similar mid -teens kind of a decline for the spirits industry. So if you could talk about Maharashtra for the industry and for you, how things have been? And any update on the Maharashtra liquor, any policy development for that? 8 | P a g e Q2 FY2026 Earnings Call Transcript

Maharashtra, you're right that the spirits industry has actually taken a beating in the last 3, 4 months, primarily because the consumer price of the brands have shifted upwards by Rs. 80 to Rs. 100 a bottle, the small-size bottles. Now having said that, whenever there is such a change in the consumer price, the consumer takes its own time to settle with the price and the choice of brands. It is too early for us to comment on the fate of the Maharashtra alcohol space. I think we need at least 2 -3 months more for the policy to settle down and then the brand will find its space.

See, the industry in Maharashtra has declined by 25% and we've also degrown in Maharashtra by about 20%.

Understood. I had earlier asked except Andhra, what would be your growth? Did you give that number?

It is double digit growth except Andhra.

Okay, thanks. That's all from my side.

The next question is from the line of Yash Sonthaliya from Edelweiss Public Alt. Please proceed.

First question is related to the glass bottling expense. So basically, like we all know, it has grown a lot in 2025 because of the industry reasons. But based on our understanding some of the capacities are coming back in the industries and things are expected to normalize. So I wanted your sense on the same?

See, the glass capacity in India is actually more than the demand as of now but there are some of the larger players whose capacities were not being used fully. Right now, the glass bottle prices have also remained stable. And with more capacities coming into play, I think the industry is going to see favorable position as far as price and demand is concerned.

So, are we expecting our cost to decline or remain maintained from here on?

So, we are at this point of time, not taking this into consideration [in our guidance]. However, as Amar said, it is a commodity. So, it is a demand and supply game. So once the supply increases with the large 9 | P a g e Q2 FY2026 Earnings Call Transcript players increasing their capacity utilization should have an impact on softer side.

Understood. And just wanted clarity, like you were mentioning in AP, we used to have 10% market share. What is it right now? Sorry, I was not able to hear it clearly?

It's approximately 30%.

Thank you, sir. And best of luck for upcoming quarters.

The next question is from the line of from Rehan Syed from Trinetra Asset Managers. Please proceed.

So, like my majority of questions have been answered so I'm left with only one question regarding your Sitapur distillery utilization. So, what I mean, the Sitapur distillery now fully operational . So, what is the current utilization level and how has this facility contributing to our gross margin? Improvement or cost efficiency in the premium segment, we are expecting some margin improvement in coming quarters or coming year?

At the time of taking this decision of putting a greenfield project at Sitapur, we said that it is our strategic investment. Since we are growing 20% plus in our P&A portfolio, the alcohol being used is mostly the grain-based. And in most of our products in top end, we use our own grain -based ENA. So, this grain ENA requirement for branded business was the compelling reason for putting at Sitapur distillery. And secondly, malt maturation is also part of it, which is our main focus area for future. Sitapur distillery is completely stabilized. We are operating the distillery at 95% of the capacity and it's running well. Since, it is a backward integrated for our branded business, hence it is helping us to grow our branded business. As you've seen in first half, our branded business has grown by 38%. We continue to see an upward mo vement in our branded business. So, in 3-4 years' time, we will be fully utilizing the Sitapur capacity for our own branded business. So, I think it is a very valuable and strategic investment by us.

Okay. Any margin guidance you have to given? 10 | P a g e Q2 FY2026 Earnings Call Transcript

We've already guided that in the current fiscal, we should see 150 basis point increase in the [EBITDA] margin. And in the next 2 years, we expect the margin to increase by 125 basis points year -on-year, thereby, we reach late teens after 2 years.

Okay. Fair enough.

The next question is from the line of Sanjay Manyal from DAM Capital. Please proceed.

Just a few questions, specifically on the ENA part. Given the fact such a high growth has been taking place in the volumes now, you think that we would require one more round of capex if we continue to maintain the entire ENA requirement captive? And if y es, then which major states you would see the ENA requirement will be higher, so you might set up capacity over there?

We did Sitapur greenfield capex on our distillation cap acity after over a decade. We don't require any more capex for our distillation for the next 5 to 7 years. It is not on drawing board.

Right, sir. And what kind of benefit we get from this capex versus a player who does not have the captive requirement. I believe now the availability of grains, whether it is broken rice or for that matter, maize and all that for ethanol specifically requirement is high. So, I'm sure the cost for broken rice and the other major raw material is quite low. So, what's your outlook on both these things?

See, as far as the advantage of capacity like the Sitapur , the most important objective of setting Sitapur is for our premium brands because we source all the spirit of our premium brands from Rampur, Sitapur. So, that is why you see Radico's P&A growth is very high. So , I think, one of the most strategic advantage s for us. And definitely, like I think build versus own, it would be a margin of RS. 6 to Rs. 7 a liter.

And if grain prices soften further, it can optimally be at Rs. 8 to Rs. 9.

Right, sir. And lastly, sir, on our luxury and semi luxury portfolio, you have guided earlier that we would be able to do Rs. 500 crore kind of revenue this year. The kind of growth we are witnessing, would you like to give some number for next year? Or for that matter, if you also can elaborate a bit, which are the major states where we are witnessing the very high growth in the luxury portfolio? 11 | P a g e Q2 FY2026 Earnings Call Transcript

First of all, we are quite confident that we should achieve the Rs. 500 crores figure in this year. So, once we achieve the Rs. 500 crores, then we'll think about our next target. So, our first aim was to touch Rs. 500 and actually the luxury portfolio is growing all over , starting Jaisalmer Indian Craft Gin is growing in every state. It's having a good growth. And even our Sangam World Malt has started growing from a small base and now we spread it across many geographies. Plus what we've done is we have taken out the smaller SKUs for Rampur, Sangam, and Jaisalmer, which is fueling their growth. Royal Ranthambore, I think is showing an exceptional growth trajectory and it is the only Indian whisky, which is priced even Rs. 100 higher than the bottled in India scotch, and that has seen a growth of 67% and that growth is coming from every states, so it is Pan-India.

Perfect. Thank you very much and all the best.

The next question is from the line of Aditya Soman from CLSA. Please proceed.

Sir, 2 questions. Firstly, on the P&A brands, you indicated, obviously, Magic Moments, After Dark and Royal Ranthambore and Morpheus doing very well. Can you give us a sense of what the price index for each of these would be? So let's say, I'm assuming Ma gic Moments to be Rs. 100, how does that price index play out at a broad level or at a company realization level? I understand it will be different state by state. And secondly, in terms of the revenue contribution of each of these brands or volume of each of these brands, if you can give sense last quarter, if I remember, you mentioned 250,000 cases for Royal Ranthambore doubling. So, can we again get a sense of the scale?

So as far as the price index is concerned, it starts with the After Dark, which is the deluxe category. If it's 100, then you see the luxuries are 50x to 100x. And Royal Ranthambore will be 25x, 30x of the contribution level. So basically, the price index may vary because state to state have different excise structures and systems. And what is the second question?

And the second question was just the revenue or volume salience, of these brands. 12 | P a g e Q2 FY2026 Earnings Call Transcript

We have a bouquet of brands, where we disclose that the P&A category, which is the Deluxe & Above constitute around 44% of our volume and 68% of our value in the branded business. That has a composite of all Magic Moment, Morpheus, luxury, semi-luxury and all these portfolio.

Understand. And can you give us any sense of what the scale of, let's say, something like Royal Ranthambore would be given that, I mean, that while the absolute volume is obviously much smaller, it is a big contributor to revenue already?

Luxury and Semi Luxury is close to 9% to 10% of our total [IMFL] revenue and Royal Ranthambore is a reasonable part of that and continues to grow at a very, very fast pace.

All right. Very clear. Thank you. That's it for me.

The next question is from the line of Kaustubh Pawaskar from ICICI Direct. Please proceed.

Sir, most of my questions have been answered. I have one question on your regular category. So for last 3 quarters, we have been saying this category has been delivering around 5 million to 5.4 million cases kind of a volume and which has improved from around 2 million to 3 million cases, which were in the earlier quarters. So should we expect this particular segment volumes to stabilize at around 5 million cases. So quarter 3, most of the stabilization would happen. And from there, you should expect a regular kind of a growth in this segment of around 7% to 8%.

So yes, the impact of the Andhra Pradesh, which has come in the first half, but the momentum is continuing. As we guided that this year, we will be growing 20% plus in the H2 also on the P&A category and we are confident to deliver double-digit growth in the regular category as well. Overall growth has already been guided by us this year, we are going to grow 20% plus on the overall volume, including P&A and regular. So, I think the growth momentum continues.

Yes. From the Andhra Pradesh point of view, just wanted to understand that whatever benefit because of the change in route -to- market strategy would be there in FY 26, from FY 27, it will be a normalized growth in category. Is it fair to assume? 13 | P a g e Q2 FY2026 Earnings Call Transcript

Yes, you're right. Since the policy change happened in the second half of last year when we had 10% market share. Today, we have 30% market share. So, while in the second half, the base normalizes, we will still have the gain of the market share. And next year onwards, it will be a normal growth that we had earlier guided.

Sure, sir. And sir, my second question is on the market share itself. So in Andhra Pradesh, this is exceptional mainly because of the fact that there was a change in the policy. But in some of the other states where you have a strong, you know, base how t he market share is shaping up in the states? Because since you have launched a lot of products in most of the categories or under the various segments, are this helping you to gain market share in the states where you already have a strong foots?

So let me tell you, overall market share of Radico in the alcobev space is on the increase. We've grown by almost 200 basis points primarily because of our premiumization drive. And this growth is broad -based across states, geographies. So, I think as the premium brands and the luxury brands continue to strengthen, the market share will also see an improvement.

Thank you, sir. Thanks for that.

The next question is from the line of Pankaj Kumar from Kotak Securities. Please proceed.

Sir, just one question on this non-IMFL revenue we have seen traction in the last 2 quarters. And of course, there is a bulk alcohol sale. So, do we see this kind of trend continuing in the coming quarters?

Non-IMFL constitutes 2 major part s, one is the country liquor/UPML and another is bulk spirit sales. So sometimes because of the cyclicality and stocking of inventory, the sales of the bulk spirit during the quarter may change. However, we have guided that our non -IMFL sales is going to be in a range of Rs. 400 crores to Rs. 425 crores per quarter. At the same time, in Country liquor also, our brands are having a good franchise, and industry is growing 5-6%, whereas we are growing 12% to 13%. So, if the industry grows to 8% to 9%, we will continue to have double-digit growth.

Sir, my second last question is that we have seen the RTM benefit from UP. So , going ahead do we see similar opportunity from any other 14 | P a g e Q2 FY2026 Earnings Call Transcript states where probably any change in RTM will have this kind of growth and normal growth? Any comments on that?

See, I think UP has shown the way to most of the states that how to increase revenues to make the policy very easy and accessible. So , I think the 2 major states which can see these changes would be Delhi for sure and Bihar, we are all hoping that it should open up after the election. So, I think these 2 would be game changing states for us and for the industries.

Okay. Thank you.

The next question is from the line of Kunal Shah from Jefferies. Please proceed.

My first question is just wanted to get an industry context on Bihar, right? While there are expectations of things opening up possibly, can you give us a sense of how big the market used to be, let's say, 7, 8 years back from an IMFL standpoint? And what would have been your market share at that point in time? So just for us to size up the opportunity if that happens?

See, I think 10 years back, I think Bihar would be about 6 million to 7 million cases market. It's a large market. And, also right now, like if you see Bihar emulates what is being done in Uttar Pradesh. So, I think it can be a very big opportunity once Bihar opens-up. Bihar traditionally has been a large consumer of vodka. So, I think once it opens up, it will be a very interesting market.

Understood. And any sense which you can give of how big your business would have been back in the day, if possible?

So, we were relatively large in Bihar. And that time, we did not have like all our premium portfolio, but Magic Moments and 8PM used to sell a lot.

Understood. That's very clear. The second question is, so one price point or let's say, segment within whisky, where I think there's a large opportunity is this entire Royal Stag, Royal Challenge, where you have 8PM Premium Black. That brand hasn't done much in the last few years in our understanding. So any thoughts on what you can do here or how do you plan to play this price point specifically? 15 | P a g e Q2 FY2026 Earnings Call Transcript

So, the Royal Stag segment is pretty large. It's about 55 million, 60 million cases segment. In fact, 8PM Black was affected because of route to market and excise policy changes in a few states like Jharkhand, Assam and AP earlier. But now we see the brand growing once again. And we are very hopeful that this brand with the new packaging and new variants that are going to be launched in the same category will fuel the growth in the years ahead. We are very hopeful of this segment.

Understood. And the last question was on the luxury portfolio. So given that you had added quite a bit of capacity on the malt side 5 years ago, you'll have quite a bit of mature liquid, which will flow in the coming years. So any plans on, let's say, do you think Rampur would be enough to absorb all of it or how do you think of using that supply to ramp-up?

So, we have a plan to address the malt, and Rampur definitely is growing, but there will be more offerings which will be coming very soon in the single malt category.

Understood. Yeah, I think that's all from my side. Thank you.

The next question is from the line of Abhishek Gulati from HG Wealth. Please proceed.

So, my first question is, how is the ready -to-drink segment doing for us? And how much it accounts for our revenue? And overall, how this trend is shaping up in India?

So we test marketed the ready-to-drink segment with Magic Moments Vodka Cocktail in about 2 to 3 states. We got a good response. But then what we observed was that the traction for Magic Moments vodka among the Gen Zs was so high that we felt there could have been a slip in the volumes with vodka cocktail and the vodka brand. So, we prefer to taper it off and lie dormant right now.

Okay. And overall, the demand of those are like a bit growing in India. So far, I have read the growth of that category. What's your view on it?

See, as of now, what our views are very clear, hands are absolutely full with all our premium portfolio. And in the RT D, your margins are not high because you do not have that price elasticity. So, I think what we are addressing now the luxury segment, etc., our focus of Radico is there on those segments. 16 | P a g e Q2 FY2026 Earnings Call Transcript

Understood. Are we revising our 20% volume guidance for the full year as we have seen superb growth in this quarter. So, are we considering to revise it?

See, as we say, we don't want to revise the guidance, but we are very, very sure of surpassing 20%.

Okay. Just last question, if I can ask. Like in the PPT that you have mentioned the upcoming premium brands. So what are in the pipeline for like that would be margin accretive as well?

See, we have plans of like, as I said, the single malt is there. Then also we'll be entering into the tequila in our joint venture. So, these are the things which are in the pipeline, plus also spreading the geographical thing of our luxury brands.

Understood. That's it from my end. Thank you.

The next question is from the line of Anjali Bajaj from Naredi Investment. Please proceed.

Congratulations for good set of numbers. My first question is given the extraordinary surge in regular and other volume primarily attributed to shift in group to market in Andhra, how does management assess the sustainability of this high volume growth rate in the regular assessment segment for the second half of the financial year '26?

So, we have just answered to one of the earlier participants that we had a 10% market share in Andhra last year and today, we have a 30%. So even though the base normalizes, we will continue to see the benefits of higher market share. So, the growth in regular will continue to be strong in second half, maybe not as much as we saw in first half, but it will be still very strong.

Okay. Thank you.

Thank you. Due to time constraints, that was the last question. I now hand the conference over to the management for the closing comments. Over to you, sir. 17 | P a g e Q2 FY2026 Earnings Call Transcript

As we move forward, our focus remains on accelerating the premium and luxury growth while driving greater efficiency across operations with disciplined capital allocation and prudent financial management. We are well positioned to strengthen our profitabili ty, generate free cash flow and create enduring value for our shareholders. Thanks for joining us on call today, and we look forward to connecting with you again next quarter. Thank you.

Thank you. On behalf of DAM Capital Advisors Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

This transcript has been edited to improve readability. For more information, please contact: Saket Somani

Senior Vice President – Finance & Strategy

somanis@radico.co.in | +91 11 4097 5403