RADICO Q2 FY27 Results Analysis: PAT Jumps 66%, EBITDA Margin Expands 460 bps

RADICO's Q2 FY27 numbers came in strong, with revenue of Rs. 1,745.10 Cr (+16.81% YoY) and PAT growth of +66.49% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Radico Khaitan delivered a record quarter with net revenue of Rs.1,745.10 Cr (+16.81% YoY), EBITDA margin of 20.56% (+~460 bps YoY), and PAT of Rs.232.35 Cr (+66.49% YoY), holding above the ~20% FY27 margin guidance. The blemish is the missed net-debt-free-by-Q2 checkpoint (Rs.174.07 Cr outstanding) and a working-capital build that pulled CFO/PAT to 0.82x. Premiumization-driven margin expansion and deleveraging remain intact, making the H2 net-debt elimination target stretch-but-achievable.

Key Investment Insights

Key Positives

• Net revenue (net of excise) grew 16.81% YoY to Rs.1,745.10 Cr, a record quarter; QoQ net revenue rose 3.59% despite gross revenue falling 4.87%
• Consolidated EBITDA margin expanded ~460 bps YoY to 20.56% (standalone 20.47%), holding above the ~20% FY27 guidance
• PAT grew 66.49% YoY to Rs.232.35 Cr with no exceptional items; H1 PAT up 71.04% YoY to Rs.461.95 Cr
• Gross margin expanded 440 bps YoY to 48.04%, consistent with premiumization mix shift (excise duty fell to 68.74% of gross revenue from 70.46%)
• Finance costs fell 29.88% YoY to Rs.11.42 Cr; net debt reduced by Rs.58.17 Cr in H1 to Rs.174.07 Cr
• H1 free cash flow of Rs.214.38 Cr covered the Rs.120.58 Cr dividend and Rs.84.75 Cr of debt repayment
• Effective tax rate eased to 24.85% from 25.35% YoY

Risk Factors

• Net-debt-free by Q2 FY27 checkpoint was missed: net debt stood at Rs.174.07 Cr at September 30, 2026 (borrowings Rs.247.07 Cr vs cash/bank/loans Rs.73.00 Cr)
• Trade receivables rose 27.52% since March to Rs.1,516.88 Cr and inventories built Rs.95.00 Cr, pulling CFO/PAT to 0.82x and CFO/EBITDA to 0.53x
• Gross margin gave back 109 bps QoQ (49.13% to 48.04%) with inventory build tripling to Rs.31.89 Cr