Radico margin reaches 18.92% after fourth straight quarterly rise
Profit growth was aided by slower expense growth, lower interest costs and a lower tax rate, while the stock's initial gain was modest against its results-day history.
Filed 06 May 2026, 14:30 IST · Radico Khaitan Ltd (RADICO)
Key takeaways
- Consolidated operating margin expanded 5.31 percentage points year on year as revenue grew +15.31% while expenses rose +8.23%.
- Consolidated net profit rose +94.92% year on year, helped by a 0.78 percentage-point lower tax rate and other income equal to 4.27% of pre-tax profit.
- Operating margin reached 18.92%, its fourth consecutive quarterly increase and 2.17 percentage points above the 16.75% median for 26 reported sector peers.
Price around the results
Expense control drove the year-on-year margin gain
These consolidated results show operating profit rising +60.25% year on year, well ahead of the +15.31% revenue increase, because expenses grew only +8.23%. The resulting 5.31 percentage-point margin expansion was reinforced by interest costs falling -28.37%. Other income contributed 4.27% of pre-tax profit, while the 0.78 percentage-point reduction in the tax rate also lifted net profit, so the earnings increase was not purely operational.
Premium volumes supported Q4 revenue quality
Management said total IMFL volume rose +4.00% in Q4FY26 and Prestige & Above volume grew +27.90%, giving the quarter a premiumisation component despite revenue falling -2.78% sequentially. It attributed regular-volume decline to a higher Andhra Pradesh base after a route-to-market change and policy changes in Maharashtra and Karnataka. Management also said non-IMFL revenue growth reflected a lower base of bulk alcohol sales in Q4FY25.
Margin has climbed from 15.42% in Q1FY26 to 18.92%
Operating margin increased from 15.42% in Q1FY26 to 15.91% in Q2FY26, 17.27% in Q3FY26 and 18.92% in Q4FY26, making this the fourth consecutive quarterly rise. Sequentially, revenue declined -2.78% but expenses fell faster at -4.72%, widening margin by 1.65 percentage points. Radico's margin was 2.17 percentage points above the 16.75% median among 26 Fast Moving Consumer Goods peers that had reported the quarter.
Management outlined FY27 margin and balance-sheet markers
Management said it is confident that the margin expansion trajectory will continue in FY27 and expects A&SP spending to remain around 6% to 8% of IMFL revenue. It also said the company expects to become net-debt-free by H1 FY2027. On the portfolio, management said it will continue widening Royal Ranthambore's distribution and described new launches in flavored vodka and super-premium whisky as part of its premium-brand expansion.
The initial stock reaction was below its usual results-day move
The stock rose +0.55% on the results date, with a +0.63% opening gap, and was up +3.34% after five sessions. The initial move was modest compared with the 2.02% median absolute move after the company's eight recent results, when five reactions were positive and three were negative.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,504 cr | ₹1,547 cr | -2.78% | +15.31% |
| Other income | ₹10 cr | ₹-7 cr | — | +258.87% |
| Expenses | ₹1,219 cr | ₹1,280 cr | -4.72% | +8.23% |
| Operating profit | ₹285 cr | ₹267 cr | +6.48% | +60.25% |
| Operating margin (%) | 18.92% | 17.27% | — | — |
| Interest | ₹15 cr | ₹16 cr | -6.21% | -28.37% |
| Depreciation | ₹42 cr | ₹37 cr | +13.44% | +17.26% |
| Profit before tax | ₹237 cr | ₹206 cr | +14.80% | +92.90% |
| Tax | ₹58 cr | ₹52 cr | +11.70% | +86.94% |
| Net profit | ₹179 cr | ₹155 cr | +15.83% | +94.92% |
| EPS (₹) | ₹13.41 | ₹11.57 | +15.90% | +94.91% |
Operating margin of 18.92% compares with a Fast Moving Consumer Goods sector median of 16.75% across 26 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.55% | -0.69% |
| Next session | +2.04% | — |
| 5 sessions | +3.34% | +5.92% |
| 15 sessions | +3.01% | — |
| 30 sessions | +10.52% | — |
Volume on the results session was 1.37× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Q4 FY2026 total IMFL volume rose 4.0%, while Prestige & Above volume grew 27.9%.
- Non-IMFL revenue growth was driven by a lower base of bulk alcohol sales in Q4 FY2025.
Guidance & outlook
- The company is confident that its margin expansion trajectory will continue in FY27.
- The company expects A&SP spending to remain around 6% to 8% of IMFL revenues.
- The company expects to become net-debt-free by H1 FY2027.
- The Board has adopted a minimum 20% dividend payout policy.
Expansion
- The Sitapur greenfield distillery project received a capital subsidy from the Uttar Pradesh government.
- The company plans to continue expanding Royal Ranthambore's distribution width.
New products
- Magic Moments launched Flavors of India flavored vodkas in Jamun SpicyMint, Alphonso Mango and Thandaai.
- Morpheus Rare Luxury Whisky was launched as an extension into the super-premium whisky segment.
New initiatives
- The company plans prudent marketing investments in existing core brands and new launches to sustain growth and market share.
- The company signed an endorsement deal with Bollywood actor Saif Ali Khan for Royal Ranthambore.
Competition
- Magic Moments accounts for 60% of the overall vodka market share.
- Royal Ranthambore held an 11% market share in CSD during March 2026.
Problems & risks
- Regular volume declined because of a higher Andhra Pradesh base after a route-to-market change and policy changes in Maharashtra and Karnataka.
- The company continues to monitor the West Asia crisis.
What to watch
- Whether consolidated operating margin holds above 18.92%.
- Whether A&SP spending remains around 6% to 8% of IMFL revenue, as management said.
- Progress toward management's stated net-debt-free milestone by H1 FY2027.