RADICO Q2 FY27 Earnings Call: P&A Guidance Upgraded to 30%, 20% EBITDA Margin Reaffirmed

RADICO held its Q2 FY27 earnings call on October 27, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strongest Quarter in Company History, Records Across the Board

• Record quarter — Q2 FY 2026-2027 was Radico Khaitan's strongest quarter in history with record volumes, revenue and profitability: IMFL volumes over 10 million cases (+7% YoY), revenue Rs.1,746 crore, EBITDA Rs.356 crore and EBITDA margin 20.4% (+462 bps YoY).
• Prestige & above volumes hit 5.28 million cases — highest-ever, up 36% YoY in Q2 FY 2026-2027, driven by brand momentum and premiumization-led mix improvement.
• Gross margin at 48% — up 440 bps YoY (premiumization +510 bps, price increases +85 bps) but down 109 bps QoQ on cyclical brand mix changes and grain price inflation; ~Rs.27 crore packaging/raw material impact partially offset gains.
• Regular category degrew YoY — Q2 FY 2026-2027 decline reflects a high Q2 FY 2025-2026 base (Andhra Pradesh route-to-market change) plus policy changes in Maharashtra and Karnataka; H1 FY 2026-2027 regular volumes down ~12.5%.
• Return ratios improved — ROE and ROCE rose in Q2 FY 2026-2027 on higher operating profit and better asset utilization; working capital was deliberately increased to support premium growth and procurement, with normalization expected during H2 FY 2026-2027.
• Leadership changes effective 27 Oct 2026 — Dilip Banthiya joins the board as Executive Director & CFO; Saket Somani elevated to Deputy CFO with an expanded mandate across strategy, financial planning, investor relations and digital transformation.

Vodka and Luxury Lead; Regular Segment to Plateau

• Vodka is now 30% of volume mix — per CSO Sudhir Upadhyay (FY 2026-2027 mix), whiskey is 40-45%, remainder brandy and rum; gin remains very small as it plays only at the extreme top end.
• Vodka's IMFL share reached 6.3% — in Q2 FY 2026-2027 versus 28% globally; management expects vodka, especially flavored vodka, to outpace all other spirit categories over the next 3-5 years, and notes a 1% share shift adds ~4-4.5 million vodka cases (period unspecified).
• Flavored variants are ~75% of the company's vodka portfolio — per MD Abhishek Khaitan (Q2 FY 2026-2027), via the "Flavors of India" range (mango, jamun, aam panna); internationally flavored vodka is only ~25% of mix, and management will push the range overseas wherever opportunity exists (aspirational, no numeric target).
• Luxury turnover of Rs.475 crore — done in FY 2026-2027 per management, tracking well toward the ~25% value growth guidance for FY 2026-2027; Abhishek Khaitan confirmed no change to that guidance. Spirit of Kashmir remains an open overhang: CFO Dilip Banthiya said the matter is sub judice and declined to comment.
• After Dark grew ~60% in FY 2026-2027 — per Sanjeev Banga; the relaunched brand (post PAT change) is live in 10 states as of Q2 FY 2026-2027 with positive traction, and the new look is not yet live in many states.
• Virasat Indian Single Malt (Rs.3,500-4,000 per bottle) — positioned in affordable luxury, a portfolio gap; management sees "tremendous response from every state" and is steadily taking it to new states.
• 8PM Premium Black back in growth — per CFO Dilip Banthiya, following the change in packaging, look and communication; Royal Rantem More performing well across civil and CSD channels.

20% EBITDA Margin Reaffirmed Despite Cost Volatility

• Rs.27 crore input cost hit in Q2 FY 2026-2027 — from higher grain and packaging material costs, approximately 156-160 bps on a gross margin basis (~1.6% of net sales); the packaging headwind moderated from ~Rs.30 crore in Q1 FY 2026-2027.
• 20% EBITDA margin guidance maintained for FY 2026-2027 — supported by continued premiumization and product mix improvement; management stated margins will not plateau at that level and expansion will continue, driven by faster-growing, higher-margin vodka and luxury categories.
• No numeric margin guidance for FY 2027-2028 — management cited current volatility in global macro-led raw material and packaging costs and said FY 2027-2028 guidance may be addressed one quarter down the line or towards the end of the year.
• Grain relief expected from November (Q3 FY 2026-2027) — with the new crop season, grain prices are expected to stabilize; SCI allocation to the FY 2026-2027 ethanol policy is very elevated at 72 lakh metric tons, which management expects will further aid price stabilization.
• West Asia war impacting packaging costs — bottle, PAT and some laminate prices affected; management termed the scenario very unpredictable but expressed confidence in delivering the 20% FY 2026-2027 EBITDA margin guidance.
• Pricing added 85 bps in Q2 FY 2026-2027 — via price hikes across 7-8 states (after 75 bps in Q1 FY 2026-2027); P&A realization rose 2.2% QoQ and ~12% YoY. Management expects, in a normal state of affairs, a 5-6% product-mix differential plus 100-125 bps annual price increase as net realization impact (period unspecified).
• Value engineering ongoing — hipster packs, glass lightweighting and PET form an R&D-led exercise; hipster volume share vs a year ago was not quantified.

P&A Guidance Upgraded to 30%; Regular to Stabilize

• P&A volume growth guidance upgraded to 30% for FY 2026-2027 — after 36% H1 FY 2026-2027 growth; Jefferies' Dhiraj Mistry flagged the implied ~24-25% ask rate as conservative, but CFO Dilip Banthiya said guidance reflects only what the company is "sure of" and momentum, aided by the festive season, remains as strong as H1 FY 2026-2027.
• Whiskey and brandy expected to grow upward of 20% in FY 2026-2027 — whiskey led by 8PM Premium Black, After Dark and Royal Ranthambore; brandy led primarily by Morpheus.
• Regular category expected to plateau — benign growth of 1-2% from H2 FY 2026-2027 onward; Maharashtra base impact to be almost nullified from H2 FY 2026-2027 (Q3 FY 2025-2026 carried an Andhra base effect). Management continues to evaluate its regular-category stance based on raw material prices.
• No FY 2027-2028 / FY 2028-2029 P&A number ascribed — Banthiya noted guidance has already been revised twice in FY 2026-2027 and the company wants to consolidate; it sees no reason for momentum to come down but will not ascribe a number at the moment.
• UP elections "not a case of worry" — per MD Abhishek Khaitan, UP liquor revenue is very large at ~Rs.60,000-65,000 crore (current market size, FY 2026-2027), the state's system is well set, and business does not slow down during elections.
• Tailwinds for H2 FY 2026-2027 into FY 2027-2028 — progressive state policies, any opening up in states like Tamil Nadu, consumer shift toward premium with alcohol treated as a lifestyle category, and vodka's growth trajectory. Headwind: the macro environment is making the cost scenario volatile; with premium products growing at 30-35% (FY 2026-2027), the margin impact becomes "relatively less meaningful," though costs remain a key item to watch.

DRI Scrutiny and Scotch Duty Cut: Unresolved but Contained

• DRI scrutiny framed as industry-wide, no Radico-specific impact expected — CFO Dilip Banthiya stated scotches imported over the last 10-20 years fall under the same HSN code 2208, and VMS imports after 15 July continue under the same code with no change in code, connotation or narratives; management is confident its practices comply with current laws and confirmed the DRI issue is unlikely to impact Radico.
• Scotch duty cut (150% to 75%) under regulatory review — Abhishek Khaitan said the Ministry of Commerce executed the FTA and the DRI is studying the matter, taking inputs from all stakeholders, including companies importing bulk Scotch and inputs from Scotland; clarification will come at the appropriate time and management cannot speculate on the outcome. Analyst-cited reports implying the reduction may apply only to bottled-in-origin imports, not bulk, remain an unresolved regulatory risk for the bulk import savings thesis.
• Industry price-hike representation to start from November (Q3 FY 2026-2027) — per the CFO, the industry body considers all raw material and packaging material inflation and puts the case to the government excise department; most state excise policies come in February. Deputy CFO Saket Somani confirmed inflation has so far been absorbed by the industry and some relief is expected whenever the next revision happens by most states (period unspecified).
• South India IMFL skew clarified — responding to a social media data point, management said South India accounts for about 60% of the IMFL industry because country liquor/local spirits categories are largely absent there; the skew is less pronounced than the headline claim.
• Indian spirits industry sized at roughly equal thirds — ~400 million cases of IMFL, ~350-400 million cases of country liquor/local regional spirits, and a similar size again in beer.

Rebound After West Asia Disruption; UK Travel Retail Push

• Exports bounced back in Q2 FY 2026-2027 — after the West Asia geopolitical disruption that began Feb-March 2026 initially hit shipments; regular shipments to West Asia have resumed with growth across all export markets, and management sees "no letdown" in the export business.
• Freight is now a margin issue, not a growth issue — rates have risen "tremendously"; the company is absorbing part of the higher freight, export customers are absorbing part, and some consumer price increases have been taken in certain markets.
• First Indian spirits company across four major UK airports — management is progressing toward its target of 100 travel retail outlets (period unspecified).
• Flavors of India range seeing early traction overseas — per Sanjeev Banga; the luxury portfolio (Rampur Indian Single Malt, Jaisalmer Indian Craft Gin, Virasat) continues to receive exceptional response in India and abroad.
• New launches gaining traction domestically — Magic Moments Am Panna launched August (Q2 FY 2026-2027) with a digital-first campaign and high tertiary offtake; Jamun "has become a craze"; one-two more flavors to be added (period unspecified).