Liquor maker Radico Khaitan’s premiumisation strategy continues to gain traction, with strong momentum across its key high-end brands helping the company improve market share, according to domestic brokerage Antique Stock Broking.
The brokerage has maintained its ‘Buy’ rating on the stock while raising its target price to ₹3,800 from ₹3,750 on the back of better visibility on volumes and margins.
Premium brands drive volume momentum
The brokerage noted that Radico’s portfolio strength in the vodka segment continues to support growth. Magic Moments, one of the largest vodka brands in the country, is benefiting from the category’s faster-than-industry growth. Increased experimentation driven by new launches such as Russian Standard, Kashymr and Cashmir is further aiding category expansion, Antique said.
Policy headwinds offset by state-level opportunities
Despite near-term challenges in certain markets, analysts expect Radico to continue gaining market share. The Indian-made foreign liquor (IMFL) industry saw volumes decline 25-30 per cent in Maharashtra during October and November 2025 following changes in the state’s liquor policy. Entry-level prestige brands are likely to face moderation as consumers resist moving up from the earlier ₹120-140 price band to the new ₹180-190 levels.
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Margin outlook improves on stable input costs
On the cost side, the outlook for margins appears constructive, analysts noted. Antique expects raw material prices to remain stable, supported by improving utilisation at glass manufacturing facilities, including the HNG plant that was earlier operating at only 25-30 per cent capacity. This is likely to cap glass price inflation over the medium term.
Moreover, Radico’s backward integration is also expected to provide a competitive advantage. With the commissioning of its Sitapur grain-based plant in FY25, the company’s raw material costs are now more closely linked to grain prices rather than extra neutral alcohol (ENA). Grain prices have corrected more sharply than ENA, which could allow Radico to report better margin expansion compared with peers. The brokerage added that ENA inflation linked to ethanol blending in petroleum is likely to moderate, given ample grain availability.
Antique has marginally raised its earnings estimates and now values Radico Khaitan at 55 times price-to-earnings on H1FY28 estimates, a 27 per cent premium to its five-year average, reflecting confidence in the sustainability of premium-led growth.
The brokerage forecasts a revenue, Ebitda and earnings CAGR of 18 per cent, 32 per cent and 44 per cent, respectively, over FY25-28. Growth is expected to be driven by premiumisation, new product launches, declining debt levels and continued resilience in the regular segment. With operating margins set to expand, Antique believes Radico Khaitan remains well placed to deliver superior earnings growth over the medium term.
Disclaimer: The stock target/outlook has been suggested by Antique Stock Broking. Views expressed are their own.