Radico Khaitan, India’s luxury spirits maker with marquee brands like Rampur Single Malt, Royal Ranthambore Whisky, Morpheus Brandy, and Jaisalmer Indian Craft Gin, is once again the toast of Dalal Street. In its latest coverage, Ventura Securities has raised its target price on the stock to INR 4,133, implying a 44.91% upside from the current market price of INR 2,852.
This marks a notable upward revision from Ventura’s earlier initiation target of INR 3,632, reflecting its growing conviction that Radico’s premiumization journey, coupled with operational excellence, positions it as one of India’s most promising consumer discretionary plays.
From Mass IMFL to Premium Brand Story: A 15-Year Journey
Radico Khaitan’s evolution has been anything but linear.
- 2008 Global Meltdown: The company struggled with muted growth, shrinking margins, and mounting debt.
- 2010–2015: Management pivoted to premiumization, betting on craft spirits and higher-end whisky.
- Pandemic Shock: While the broader alco-bev industry suffered, Radico doubled down on brand launches and digital-led marketing.
- 2021–2025: The payoff arrived. Products like Royal Ranthambore, Rampur Indian Single Malt, Jaisalmer Gin, and Magic Moments Verve Vodka not only won international awards but also built strong consumer recall.
What stands out: Radico never resorted to equity dilution to fund this transformation. Instead, it deleveraged steadily, reinvested profits, and created shareholder value.
Ventura’s Bullish Thesis Explained
Ventura’s research is anchored on the phrase: “Innovation and premiumization demand a premium.”
The brokerage expects revenues to grow at 20% CAGR, EBITDA at 31% CAGR, and PAT at 42% CAGR through FY28, with profits tripling and margins expanding meaningfully.
1. Premiumization as the Core Engine
- The Prestige & Above (P&A) portfolio is expected to grow at a 29% CAGR to INR 5,027 crore by FY28.
- Flagship premium brands are commanding higher per-case realisations, with award-winning spirits finding demand in metros and abroad.
- Ventura sees premiumization as not just a trend, but a secular industry shift.
2. Route-to-Market (RTM) Overhaul
- The Andhra Pradesh RTM transition (Oct 2024) was a breakthrough: Radico’s market share jumped from 10% to 15%+ within two quarters.
- Ventura believes this playbook can be replicated in other states, unlocking sustained volume growth.
3. Capacity Expansion & Backward Integration
- Commissioning of a 350 KLPD Sitapur grain distillery secures ENA supply.
- Malt capacity tripled to 3 million litres annually, with 10,000 barrels of maturation capability.
- Plans include a new western India distillery and 10 new bottling units.
- Result: reduced dependency on external suppliers and higher margins.
4. Exports & Global Aspirations
- Exports contribute ~5.5% of volumes and 9% of IMFL revenue.
- Rampur and Jaisalmer have gained shelf space in Europe, the U.S., and travel retail.
- Ventura projects exports to scale meaningfully as Indian single malts carve out a niche globally.
5. Margin Expansion & Cost Discipline
- EBITDA margins to rise by 430 bps to 18.1% by FY28, driven by mix shift and easing raw material inflation.
- Radico has adopted analytics-led procurement to manage global commodity cycles.
- Supplier partnerships and early-payment mechanisms boost supply chain efficiency.
6. Balance Sheet Strength
- Debt-free by FY28 with cumulative capex of INR 480 crore fully funded via internal accruals.
- Operating cash flows are projected to grow at a 32% CAGR, enabling higher dividend payouts.
Peer Comparison: Why Re-Rating Is Possible
Ventura highlights a compelling peer story.
- By FY28, Radico’s RoIC is expected to touch 29.5% and RoE 21.3%, among the best in the alco-bev industry.
- Yet, its current valuations still trail global leaders like Pernod Ricard and AB InBev.
- Even in India, United Spirits (Diageo’s subsidiary) commands a premium multiple despite lower margins.
This gap suggests Radico is still in the mid-stage of a consumer-brand re-rating cycle, similar to how Titan, Page Industries, or Nestlé were valued once they transitioned from products to lifestyle brands.
Industry Tailwinds Powering the Story
Radico Khaitan’s trajectory is supported by broader alco-bev tailwinds:
- Demographics: India’s median age of 28 offers a massive young consumer base.
- Premiumization: Luxury spirits >INR 2,000 segment is the fastest growing; women now form 40% of malt buyers, up from 25% two years ago.
- Exports: India’s alco-bev exports valued at INR 3,107 crore (FY24), targeting USD 1 billion by 2030.
- Policy Tailwinds: Ethanol blending mandate ensures demand for industrial alcohol.
- Retail Evolution: Boutique liquor stores, premium packaging, and travel retail are reshaping consumption patterns.
SWOT Snapshot
- Strengths: 60% vodka market share (Magic Moments), award-winning premium brands, strong distribution.
- Weaknesses: Still catching up in luxury whisky vs global peers.
- Opportunities: Tequila JV (D’Yavol), women-driven premium consumption, global single malt exports.
- Threats: 50% U.S. tariffs on Indian spirits, Maharashtra’s excise hike (+50% duty), Gen-Z’s tilt toward teetotalism and low/no-alcohol trends.
The Mukul Agrawal Signal
Adding to the confidence, ace investor Mukul Agrawal holds 14,00,083 shares of Radico Khaitan. Institutional investors already own ~44%, but Agrawal’s presence is seen as a marquee vote of confidence.
Risks That Investors Must Watch
- Policy Risk: Liquor being a state subject → frequent changes in excise duties.
- Input Costs: Glass, grains, and ENA volatility.
- Global Competition: Scotch majors may cut prices under FTAs.
- Rich Valuations: Radico trades at >50x forward P/E; execution slip could cause de-rating.
Future Catalysts
Ventura lists several near-term triggers:
- Launch of D’Yavol tequila collaboration.
- Expansion in duty-free & travel retail.
- Western India distillery & bottling units are adding scale.
- Debt-free balance sheet by FY28 → room for higher dividends/buybacks.
Conclusion
Radico Khaitan is no longer just an alco-bev stock. It has transformed into a consumer brand play, comparable to FMCG and discretionary lifestyle companies. With revenues expected to double, profits to triple, and debt to vanish by FY28, Ventura’s raised target from INR 3,632 to 4,133 is not just a valuation tweak, but a recognition of structural strength.
As India’s premium spirits consumption soars, and Radico gains a global foothold, the Street’s message is clear: Radico Khaitan is a toast worth raising.
Disclaimer: This report is only for informational purposes, not investment advice. Stock markets involve risk; consult your financial advisor before investing.
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