Radico Khaitan Surges 6% to Record High; Analysts See Further Upside

Shares of Radico Khaitan jumped 6% in Thursday’s intra-day trade, hitting a record high of ₹3,430 on the BSE. The sharp upmove came on the back of a strong business outlook, steady volume growth, and improved performance in key southern markets.

The stock surpassed its previous record of ₹3,421.70, touched on October 23, 2025. As of 1:04 pm, the stock was trading at ₹3,373.30, up 4.45%, with a day’s range between ₹3,261.70 and ₹3,591.90. Over the past six months, Radico Khaitan has gained 36%, significantly outperforming the 5% rise in the BSE Sensex.

Business Drivers Behind Radico’s Rally

Radico Khaitan, one of India’s largest and oldest manufacturers of Indian Made Foreign Liquor (IMFL), continues to strengthen its market position. The company also remains a major supplier of branded IMFL to the Canteen Stores Department (CSD), a channel with high entry barriers.

Strong Recovery in Southern Markets

A key trigger for Radico’s recent momentum is the improvement in business from Telangana and Andhra Pradesh (AP):

• Telangana market has reopened, benefiting sales volumes.

• Andhra Pradesh has adopted a free market approach, aiding Radico’s growth.

• In AP, the company’s market share rose sharply from 10% in FY25 to 30% in Q2 FY26.

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Robust Volume Growth Across Categories

For Q2 FY26, Radico Khaitan posted a strong performance across product segments:

• Total IMFL volume: 9.34 million cases (38% YoY growth)

• Prestige & Above (P&A) category:

  • 22% volume growth

  • 24% value growth

  • 2.1% YoY improvement in realisation

The P&A segment continues its upward trajectory, supported by strong consumer demand and expanding brand presence.

Management has reiterated confidence in delivering double-digit growth in the P&A category, alongside improved profitability and consistent cash flow generation.

Stable Margins and Cost Efficiency

On the profitability front, Radico reported:

• Gross margin: 43.6%

  • Flat YoY

  • Slightly higher than 43% in Q1 FY26

Margin stability reflects:

• A benign raw material environment

• Effective cost management

• Stable pricing trends

The company expects ENA (Extra Neutral Alcohol) and grain prices to remain stable to favourable for the rest of FY26, supporting margins going forward.

Analysts Maintain Bullish Outlook

ICICI Securities: Buy Rating

ICICI Securities has recommended a Buy on Radico Khaitan with a target price of ₹3,710, valuing the company at 61x average FY27–28 earnings.
Key expectations include:

• Luxury portfolio revenue of ₹500 crore in FY26

• P&A segment volume CAGR of 19% (FY25–28)

• Revenue CAGR of 19% (FY25–28)

• Regular segment volume up 67% YoY to 10.5 million cases, driven by AP route-to-market changes

• Strong Q3 sales for regular brands, with expected normalisation to 6–8% growth thereafter

Motilal Oswal: Positive View

Motilal Oswal expects Radico’s net debt to decline steadily, supported by healthy cash flow generation. The company has already reduced ₹140 crore of net debt since March 2025 and is on track to be debt-free by FY27.

The brokerage highlighted:

• Continued focus on premiumisation and luxury portfolio

• Improved operational efficiency

• Narrowing valuation gap with United Spirits

• Strong earnings visibility supported by ~35% EPS CAGR

Motilal Oswal values the company at 60x P/E on Sep’27E EPS, deriving a target price of ₹3,600.

Conclusion

Radico Khaitan’s record-high performance reflects strong operational momentum, improving market share in southern states, and sustained demand across premium categories. Analysts believe that consistent volume growth, disciplined cost management, and improving profitability provide solid support for further stock upside.

Disclaimer

This article is based solely on information provided in the source news report. It does not contain investment advice. Investors should consult certified financial experts before making any investment decisions.

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