Brokerage firm Motilal Oswal has predicted that Radico Khaitan, a leading Indian alcohol company, could see its stock price go up by 15% in the near future. The confidence comes from strong business growth, smart product expansion, and favourable government policies. However, there are also some risks to watch, like rising costs and tax changes.
Here’s a breakdown of the 5 key reasons behind this optimism:
1. Growing Focus on Premium and Luxury Products
Radico is putting more focus on its premium liquor range, with brands like Rampur, Ranthambore, and Jaisalmer. These products cater to a more upscale audience. The company already holds a strong position in vodka and is expected to grow further in high-end segments. Experts believe this will lead to double-digit sales growth in the coming years.
2. Wider Reach and New Market Launches
Radico has massively expanded its retail footprint – from 75,000 stores in FY19 to 1 lakh outlets now, and from 8,000 to 10,000 on-premise (like bars and restaurants) locations. It has also been launching new products in key states such as UP, Maharashtra, Andhra Pradesh, Telangana, and Tamil Nadu, boosting its premium market presence.
3. Strong Financial Performance
From FY19 to FY25, Radico’s total revenue grew at 15% CAGR, with its premium liquor segment growing even faster at 20% CAGR. It sold 31 million cases in FY25, up from 21 million in FY19. However, profit margins dropped slightly due to rising raw material costs (like alcohol and glass). The company is now focusing on making more products in-house, which should help improve profits going forward.
4. Favourable State Policies
States like Uttar Pradesh and Andhra Pradesh have recently introduced policies that benefit larger liquor companies like Radico. In Andhra Pradesh, for example, Radico’s market share jumped from 10% to 23% in just one quarter. These policy changes are helping Radico shift back to in-house manufacturing, allowing better control and cost savings.
5. India-UK Trade Deal Boost
Thanks to the new India-UK Free Trade Agreement, import duties on whisky and gin will be cut from 150% to 40% over the next 10 years. This is a big deal for Radico, which imports spirits for blending its premium products. This change could save the company around ₹750 million annually, starting FY26.
Conclusion
Radico Khaitan is well-positioned for continued growth with strong products, expanding reach, and supportive policies. While rising costs and taxes in some states (like Maharashtra and Karnataka) may pose short-term challenges, the company’s overall outlook remains very promising.
Motilal Oswal believes all these factors combined could push the stock up by 15% in the near future.
