Company Update : Radico Khaitan by Motilal Oswal Financial Services Ltd
All-round beat with strong volume growth
* Standalone net sales grew 34% YoY to INR15b (est. INR14b) in 2QFY26.
* Total volume increased 38%, with P&A volume rising 22% YoY (41% in 1QFY26) to 3.9m cases (in line).
* Regular volume was up 79% YoY to 5m cases. The growth was aided by a low base, resolution of state-specific issues, and route-to-market changes in Andhra Pradesh.
* Royalty cases were down by 46% YoY to 0.4m cases.
* Non-IMFL revenue grew 27%, led by higher bulk alcohol sales YoY.
* Gross margin remained flat YoY at 43% due to a relatively stable raw material scenario and a higher proportion of regular category volumes.
* Radico remains optimistic on the stability of ENA and grain prices in FY26.
* Employee costs rose 14%, S&D grew 46%, and other expenses rose 21% YoY.
* The company’s EBITDA margin improved 130bp YoY to 15.9%.
* Radico’s EBITDA/PBT/APAT grew 46%/67%/69% YoY in 2QFY26.
* Its revenue/EBITDA/APAT grew 33%/50%/76% YoY in 1HFY26.
* The Board has approved the amalgamation of its wholly owned subsidiary and step-down subsidiaries. These subsidiaries were formed to acquire the land for the Sitapur greenfield project. As the project is now complete, the amalgamation will streamline the corporate structure and bring the land holdings directly into the company.
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