Radico Khaitan, the producer behind the well-known Magic Moments vodka, has disclosed a noteworthy upswing in its profit growth, achieving its fastest pace in over two years. In the latest report released on Tuesday, February 8, the company unveiled a consolidated net profit surge of 23%, reaching ₹75.15 crore ($9 million) for the quarter concluding on December 31, 2023.
This marks the most substantial increase since June 2021.
The driving force propelling Radico Khaitan's impressive financial performance is the sustained demand for its premium brands, particularly within the affluent consumer demographic.
Over the past two years, the company has strategically concentrated on expanding its premium segment, featuring labels such as Rampur whisky and the popular Magic Moments vodka.
The sales volume within the premium segment experienced a remarkable 20% rise, reaching 3.1 million cases and contributing to a robust 29% rise in the segment's revenue.
This surge in premium segment revenue propelled an impressive 47% rise in net revenue, totalling ₹116.1 crore for the quarter. Net revenue is calculated as the overall revenue minus excise duty on sales.
However, in contrast, price hikes impacted demand in the regular segment, including 8PM whisky, leading to a 12% decline in sales volume to 3.1 million cases, with the segment's revenue falling by 11%.
Lalit Khaitan, Chairman, and Managing Director of Radico Khaitan, commented on the contrasting performance between the two segments, stating, "While the demand for the regular category brands was muted, premium brands' growth remained robust." He added, "With continued government spending and a favourable consumer sentiment, we believe that consumption should see an uptrend in the future."
Interestingly, last month, Radico Khaitan's larger rival, United Spirits, also reported a higher profit attributed to strong demand for its premium brands.
Radico Khaitan's shares closed 0.6% lower ahead of the announcement of the quarterly results.
