Radico Khaitan Limited (RADICO) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Radical Khaitan Limited Q1 FY27 Earnings Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star and zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Menon. Over to you, sir.

Hi, everyone. It's a wonderful, you know, good evening to all of you. Today we have with us Mr. Abhishek Khetan, managing director, Mr. Dilip Bantia, chief financial officer, Mr. Sanjeev Banga, president of international business, and Mr. Sudhir Upadhyay, chief sales officer, all representing Radico. Now, I would like to hand over the call to Mr. Abhishek Khetan for his opening remarks. Thank you, and over to you, sir.

Good afternoon, ladies and gentlemen, and thank you for joining us on Radhiko Khaitan's Q1 FY27 earnings conference call. We are pleased to report another strong quarter carrying forward the momentum from FY2026. During Q1 FY27, we reported highest severed quarterly volume of 10 million cases. Revenue of 1684 crores and EBITDA of 348 crores. Our performance was driven by the continued success of our premiumization strategy with our ELA portfolio delivering 36% volume growth during the quarter and significantly outfacing the industry. Despite a dynamic global environment marked by geopolitical uncertainties and supply chain challenges, we expanded our operating margins through a richer product mix, disciplined cost management, and continued operational excellence. The quarter was also a strong demonstration of our ability to translate strategy into execution. Alongside robust business performance, We expanded the distribution of our luxury portfolio, strengthened brand advocacy through consumer experiences, significantly enhanced our on-trade presence, and forged strategic partnerships that will support long-term brand equity. These initiatives reinforce our confidence that the investments we continue to make behind our brand are creating a stronger and more sustainable platform for future growth. Turning to our brand portfolio, we believe India's vodka category has entered a multi-year structural growth phase. Driven by changing consumer preferences, Favourable demographics, premiumization, and evolving consumption occasions. India's vodka category has grown at over 20% CAGR between FY22 and FY26, significantly ahead of broader IMFL growth. While Vodka accounts for nearly 28% of the global spirits market, its share in the Indian MFL industry has increased from 4.6% in Q1-FY26 to 6% in Q1-FY27. This highlights the accelerating pace of category developments and the significant headroom test remains. MagicMoment continues to lead the category with over 60% market share and even stronger position in its core price segment. The brand delivered a landmark performance during the quarter with 3.25 million cases at a growth rate of 43% year-on-year. In value terms, the growth was 51%. Indicating a strong minimization trend. The performance was driven by strong consumer acceptance and our flavor-led innovation strategy. Labor Vodka industry today accounts for 75% of our volumes, up from 65% last year. Vodka also offers attractive unit economics, supported by lower production costs and significant premiumization potential, making it one of the most attractive long-term growth strategies within the Indian alcoberts industry. Going forward, we will continue to focus on new flavor innovations to drive the industry and sustain strong growth in our portfolio. The broader premium portfolio, Royal Anthem Board, 8PM Premium Black, and After Dark Blue continue to build strong consumer traction, each supported by differentiated brand building initiatives. The limited edition Royal Rantambur Pack has been well-received with its storytelling around India's six legendary tigers, strengthening the brand's premium positioning while supporting wildlife conservation. 8PM Premium Black gained further momentum during the quarter, supported by its partnership with Sunriser Hyderabad in the recent IPL season. Improved brand visibility and strong consumer acceptance contributed to a healthy increase in market share in key markets. The recently introduced contemporary packaging for after-dark whisky is expected to further enhance the brand's premium appeal and support market share gains in the largest whisky segment of the industry. Looking ahead. We expect our P&A portfolio to deliver over 25% volume growth during FY27, supported by a robust innovation pipeline, expanding distribution, and favorable industry trends. With premium brands accounting for an increasing share of our business, we remain confident of sustaining EBITDA margin of around 20% for FY27. While continuing to invest behind our brand and strengthen our long-term competitive position. With that, I would now like to hand over the call to our CFO Dilip Bantia for a detailed review of our financial and operational performance. Thank you, everyone, and over to you, Dilip.

Thank you, Abhishek. Thank you, everyone, for joining us on this call today. FY27 has started with a strong financial momentum as we continue to deliver higher profitability, margin expansion, improved returns, and strong cash generation. Our performance is testament to the strength of our business model driven by premiumization, operating leverage, input cost stability, and persistent focus on disciplined execution and capital allocation. During quarter 1 of FY27, we delivered a strong all-round performance with total IMFL volume of 10 million cases, reflecting 3% year-on-year growth. The prestige and above category continued its strong upward trajectory, recording 36% volume growth. This performance was supported by a strong brand momentum and premiumization led mix improvement. Regular volume degrowth was due to higher base of quarter one of FY26 after the change of route to the market in the state of Andhra Pradesh and impact of policy changes in Maharashtra and Karnataka. On profitability front, gross margin during the quarter was 49.1%, representing 610 basis point expansion on year-on-year basis, and 110 basis point expansion on quarter-on-quarter basis. Gross margin improved on year-on-year basis due to relatively benign raw material scenario coupled with ongoing premiumization. Raw material accounted for 75 basis point of gross margin expansion during the quarter. This is despite the recent volatility in the packing material prices, which resulted in approximately 30 crores of financial impact. While company continues to monitor the West Asia crisis, we are confident of our margin expansion trajectory in FY27. Furthermore, the impact of price increase in quarter 1 of FY27 is about 75 basis points. Debitda margin for the quarter stood at 20.7%, expanding by 536 basis points on year-on-year basis, highest ever level. This strong improvement reflects the success of our premiumization strategy, better operating efficiencies, and continued cost discipline. It also highlights the benefit of our consistent investment in building a strong premium luxury portfolio over the years. Building on our strong financial performance, both ROE and ROCE improved during the quarter supported by higher operating profit and better asset utilization. As the premium and luxury portfolio continue to expand, we expect our capital efficiency and return ratios to further improve. Further standing our financial position, we have reduced our net debt by 138 crores since March 26, supported by a healthy profitability and robust cash generation. Our balance sheet remains strong. We are on track to become net debt-free by quarter 2 of FY27. We remain disciplined in our approach to capital allocation, with CAPEX directed toward maintenance, operational efficiency, and essential capacity optimization. Looking ahead, our priorities remain clear, driving profitable growth, maintaining a strong balance sheet, improved capital efficiency, and creating long-term shareholder value. With that, we now open the lines for questions.

Thank you. Ladies and gentlemen. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone phone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Aditya Soman from CLSA, India Private Limited. Please go ahead.

Hi, good evening, and thanks for the opportunity. So two questions from me. One, can you give us a sense of growth for key luxury brands like Rampor, maybe Royal Rampor, and any others you want to call out, and then the total luxury brand sales, and if you can give us some sense of the growth on these brands? And the second question is on the margins. Obviously, very strong performance in this quarter. How do you see these margins sort of sustain and evolve from here? Any sense in that, particularly if, let's say, E&A costs were to rise again down the line? And corollary to that is how much of a connection is there to E&A costs anymore, given that you're selling a lot more P&A products? Thanks.

To answer your first question on the luxury portfolio, last year we had a total turnover of about 475 crores, which came from our luxury portfolio, and we gave a guidance of 25% increase in the sales value of our luxury portfolio, and I think we are on absolute target to achieve the 25% growth in our luxury portfolio. And second, about your margin question, we've already given a guidance that we are confident of achieving 20% EBITDA margin in the current year, where there will be pluses, there can be minuses, but overall we feel because of our strong momentum growth in the P&A segment, we should be able to sustain these margins.

No, very clear, Abhishek. I think on the second question, just a quick follow-up. Again, I saw the guidance on the 25% growth. My question was, do you think this is the right level of such a 25% margin? Do you think this is the right level of margin on a steady-state basis, or do you think there's still room for further expansion?

Thank you. What we had guided, we have achieved in one year. I think first we are looking at 20% and when we come closer to the year, more clarity will come. So I think as of now, we stick to the 20% EBITDA margin for the current year.

Very clear. Thank you very much.

Thank you. The next question is from the line of Thiraj Misri from Jefferies. Please go ahead.

Thank you for the opportunity and congrats on good sets of numbers. My first question is on Morpheus Whiskey that we launched in Upper Prestige segment. Where are we in our journey and how's that brand has been scaling up now?

Hi, this is Sudhir Upadhyay. See, Moffits Whiskey is launched in quite a competitive segment, which is large enough. So, the brand is right now, we have launched in around 10 to 12 estates. We have an initial amount of traction, but I think it's a journey which will go on because it's a competitive segment. So, we'll still wait and watch for the results to come for the Moffits.

And how's the initial response? Let's say whatever you have gathered from this 10 states, are you gaining or let's say how's the consumer traction from this brand?

See, the way we work on, we completely believe in the distribution part. We believe in the full strategy. So, a distribution has done. There is a positive side of traction which is there from consumer in some of the markets. And we know that it will take some amount of time in seeding and all. So, as of now, it is positive and we will keep on pushing the brand.

Gotcha. And in line with that question, in this current financial year, which would be the wide gaps you would like to fill in your portfolio?

In the current fiscal, there will be more innovations which will be coming in the vodka side of new flavors being added. Plus, in the current year itself, we will be getting our tequila also. So these will be the few items. And rest, we have enough plans on our platter and enough growth which now has started taking shape like the Royal Anthem War.

And second question is on margin front. So 20.7% margin is quite excellent. But can you divide this margin between your non-IMFL business and IMFL business for the quarter?

Non-IMSL businesses generate a margin around 11, 11.5% and the rest margin, like the overall margin is 20.7%, so you can work out, I think it is 23% plus on the IMSL business.

Got it. But is this 11, 11.5% for non-IMFL businesses sustainable? Because historically, there has been quite volatile performance. Let's say from mid-single digit to high single digit, usually we report. And compared to that, 11% looks high.

Generally, the margin used to be in the range of 8 to 11 percent in the past, but because of some inflationary pressure two years back, the margin came down to mid-single digit and 6-7 percent. But we feel that these are sustainable margin on ISLB.

Got it. Got it. Thank you. And last question from my end is on capital allocation. Given that we have only 100 crore of debt and we would be virtually become debt-free next quarter onwards, and I know that you have already announced 20% dividend payout policy, but after incurring 150 to 200 crore of CapEx, also there would be substantial money would be left on the table. What's your future plan for that? Let's say you would be increasing your dividend payout ratio or would do some capex or acquisition on that front.

See, right now, we have made a target of becoming a debt-free company, which we are going to become a debt-free company. Last quarter, we also announced a minimum dividend distribution policy of 20%. So, I think once we're becoming a debt-free and the cash coming, we will go for a reacquisition only if it makes sense to the shareholders. Because if you see the history of Radico, we have always grown organically. So, as of now, our maintenance tax would be in the range of 150 to 170 crores, and the rest of the money, as the board decides, will be in that.

Got it. Thank you, and all the best.

Thank you. The next question is from the line of Harit Kapoor from Investec. Please go ahead.

Yeah, good evening, and congrats again on exceptions out of numbers. Just had two questions. You know, one was an after dark, you know, the brand has done exceptionally well, you know, since you relaunched it a few years back. I was just trying to understand that given that the trajectory has been very strong, even last two years, what prompted a kind of repackaging, relaunch kind of strategy, because it was anyways doing very well? Is it centered around certain markets that you think that refresh was needed? A little bit more color on that would be helpful.

Actually, this after dark segment is one of the largest segments. Last year, we reported a growth of 50% in volumes. We did about 3 million cases, and we have done a total internal study with the research, and then we have come out with this beautiful after dark blue, which resonates with the consumer, and the market is very big, and in fact, we have launched it in Uttar Pradesh, where we are getting very positive signals. So, I think we are very confident that After Dark Blue, in the coming years, will become a very good brand. We should see good momentum in the brand.

And is there a blend change also here? Amish, is there a blend change also? No. Got it. Got it. And the second question was really on the India-UK FTA changes. You know, just wanted to get your sense on, you know, pricing, promotion, laddering, you know, any changes that you expect from a portfolio perspective, given that, you know, Google competitors will make some pricing changes, you know, just by the matter of fact that they are bottled in origin. I just wanted your thought process on, you know, what tweaks you may need to make over the next few months. Is there something in the pipeline already, et cetera?

See, right now it's true only to commend, but with our estimate, even if they pass on, the retail price will go down by only 7-8%. Secondly, if you see, our single malls are already priced higher than the competition. Like a Rampu double-cast would be, the average rate would be about 8,000 to 8,500 rupees. Virasat, what we have done, will be in the range of 4,000. So as it is, we are priced higher than them. And today's consumer is looking at quality brands. So I think as of now, our strategy remains the same. We will continue to focus on our single malts and continue to spend behind that.

Got it. Great. Thanks and all the best guys. Thank you.

Thank you. The next question is from the line of Sanjay Manial from Dam Capital Advisors. Please go ahead.

Hi, sir. A few questions, specifically, first on the UKFTA. What kind of a competition you think is panning out in the luxury segment, specifically, you know, any early signs of this extensive competition, any major brands where you think that, you know, now would be imported by the competitor?

Right now, right now it is too soon to commend, but as I said in my earlier answer also, is our luxury portfolio is very different, and we are into the single malt category where the price elasticity is a lot, and it all depends on the consumer preference, and also if you've seen the Indian single malt is outfishing the global malts in India. So I think it's a long way to go, and more than price, it is the taste. Where our luxury portfolio differentiates from the competition. And also in the global market, we are competing with all the global giants. So I think this is not such a, it won't be such a mover shaker at all.

Just one more thing on the luxury part itself. What I understand, it must be closer to 3% of the total India IMFL volumes. Is there any sense we can get what would be the value contribution from the luxury part industry-wise? This is an industry-wide question.

Do you mean sales rights?

Yes, sir.

It's very difficult, like if you want just to estimate it should be double, I think 3 then it will be 6.

Okay. And maybe if you can give some sense about any sort of changes we have seen in the Karnataka, actually in both popular and the P&A segment, what kind of impact we have seen on both popular and P&A.

I think Garnataka, it has been a very, very progressive side of the policy, and we have seen the, you know, government, the way they are going on. They have initialized the premium brand pricing one and a half years back also, and at that time, there was a P&A growth of around 28 percent, and… Our P&A category has doubled the volume at that time. Now, again, you know, taking the learnings from there, they had again rationalized the pricing for the premium brands. And this time, the P&A category has grown, for the quarter one I am talking, the P&A category has grown by 9%, whereas, you know, our portfolio of P&A has grown by 83%. So, it is a very positive side of it. The government is thinking on the right line. And since we have a strong portfolio there of all the brands, so when you talk of, you know, Rambo Single Malt or Jaisalmer Indiknaj Gin or Sangam, Virasat, Royal Dantambor, and then, you know, Morpheus Brandy, Magic Moments, After Dark. So that's a strong portfolio which we have. So we are pretty positive on that side. And considering the Cosmo culture in Karnataka, we think that it has a long way to go.

And lastly, on the ENA part, I just want to understand, given the fact the kind of growth you have seen in the last few years, I believe your requirement for the ENA would have gone up substantially, versus I believe your capacity is close to 30 growth, if I'm not wrong. So any plans to sort of increase the capacity for the captive requirement?

I think they outsource the E&A for the mass brand is heavily available and with the capacity expansion done in the last 2-3 years, most of the states are becoming E&A surplus. So, I don't think that there is any compelling

reason to go for a CapEx and do another capacity expansion, but in future, as we are

completely becoming debt-free, if it arises and the need arises that we can generate that kind of ROI, then we will think about it, but as of not now.

And what is your requirement, total requirement now, E&A requirement, Captiv?

So our total requirement is in the range of around 28 to 30 crores between our IMFL and non-IMFL both put together. And between our Rampur, Sikapur plant and our joint venture, we make 33 crore litre. Some we sell because of the logistic reason is from UP, but that quantity we buy in southern states and some eastern states.

Thank you and all the best, sir.

Thank you. The next question is from the line of Agnish Roy from Nuwama World. Please go ahead.

Sure, thanks. Congrats on a great set of numbers again. My first question is on South India, specifically Tamil Nadu and Karnataka. Tamil Nadu, of course, the buzz is there that government there will reform the sector, and today the news has come that TASMAC shops will be privatized. I wanted to understand historically how big you have been in Tamil Nadu market, and given there are other examples of privatization in other states. Do you see a big potential for your company and industry in Tamil Nadu based on whatever assumptions are available? I know we don't have the details, but fair to take the example from other states. And in Karnataka, post-tax reform, the number of slaps have become half and clearly there is much higher growth at mid and premium end of P&A. If you could comment on how things have evolved for you and for the industry, because everyone is seeing very strong growth there in the last one or two months in the mid and top end of the P&E. That is my first question.

So, to answer your first question about Tamil Nadu, Tamil Nadu is the largest market of the country. And all the signs are positive. Initially, they have also started ordering on the tertiary sale. And there are a lot of industry meetings also going with exile. So, I wish and pray that it becomes an open market. And like Andhra, when it opened up, we didn't know that we'd become the largest test, the 25-26% market share. Tamil Nadu is basically a brandy market, and our market's brandy is doing exceedingly well in the premium state. So, it's a wait and watch, but it can be a very big market for the entire liquor industry. And to your second question about Karnataka, I think Karnataka has done the most, it's the most progressive policy. What they have come out with, and the P&A growth in the first quarter has been 9% of the industry, whereas our P&A growth has been 83%. So I think, and right now, the MRPs are just getting settled. So the exact fact will start coming from July onwards. So I think Karnataka will be a very interesting industry for the P&A category, for the industry, and especially radical.

Sure. My second question is slightly structural. When we hear the phone call of any liquor company, we hear very similar thing that everyone is launching flavored vodka, flavored spirits, flavored this, flavored that. So, you have been one of the early movers here, and you have done exceedingly well. My question is, will this become a challenge going ahead at some stage that differentiation then will become a problem because in this kind of a me-too strategy, which other companies are also doing, then what will happen in such a scenario? Everyone will have the same flavored guava, flavored this, flavored that. So I wanted to understand that from an innovation perspective.

You are 100% right. When I launched Magic Moments Vodka in 2006, that time the vodka saliency was 1%, and there were hundreds of vodka launched, but Magic continued to become the market leader with 60% market share in two decades. And what I feel, globally, 28% of the global industry is vodka. In India, Last five years, 20% growth. And now what we are seeing is a meteoric rise. So I think it's a multi-year story for vodka. And the more the brands come, the category gets boiled. And eventually the consumer sticks to one or two brands. So I think the more competition which will come in this space would be very healthy for the industry and for the category to expand. So, I think it's a very, very positive sign for the vodka as a technique.

Sure. Last quick question. In Maharashtra, you are slightly differently placed versus some of the other listed companies, because you do have some level of presence in the MML. So, if you could update us on how your MML has done through that joint venture, and how has the industry shaped up in terms of MML? So after December, when the lapping up of base happens, what will be your expectation on non-MML, so essentially IMFL growth for the industry and for you?

Yeah, so, see, after this, you know, introduction of the, you know, MMLL last year, there has been a degrowth in the overall industry. You know, last year we have seen a 35% degrowth. You know, right now we are seeing a 20% degrowth in the quarter one. But for a change, I mean, if we talk about our P&A and growth, which is coming in quarter one is around 10%. So the industry has grown in quarter one by 20% and we had grown by 10% on PMA. So that's the positive side of it where the consumers are coming back to their favorite brand. Second part is that regarding MML, I think that is already settled at 6 to 7 lakh cases only. We had a presence there and we have around 7-8% of the market share there and that is all. It's continued. We think that President Abob will do much better in the times to come.

Thank you. That's all for me. Thank you.

Thank you. The next question is from the line of Shantanu Mantri from Think Investments. Please go ahead.

Hi, team. Thanks for taking my question. I had a couple of questions to start with. The industry leader typically spends, you know, 10 to 11% on A&P. And those guys have been guiding for 5-6% P&A growth, right? And while we look at RADIC, we typically spend 7-8% and, you know, we are doing 30% plus and guiding for 25%. I wanted, you know, your insight on this, like, is there a need for us to increase ANP, gain more market share, or how does this dynamic work? So, would, you know, want to hear your thoughts on this.

Like Shantanoit would have seen is in the last, we will be the only company to create organically all the brands. And in the last 98, we launched Atrium. And we have maintained our ad spend in the range of 7 to 8% maximum. And I think that's a fair enough money to make the noise. It depends where you spend the money. So I think it is a good enough money to spend and create and grow the brands. So I think, um... We spend a lot of money on direct marketing, on visibility, in-shop, digital. So where the money really contributes for the brand? And that is showing in the result in the last 10 years. We have always outpaced the industry in terms of P&A growth.

Absolutely. That sounds pretty impressive. My second question is on the regular portfolio now. You know, last year, obviously, on a corrected base, we grew 30%. We did close to 20 million cases X royalty. How do we see that segment growing now? Let's say, if I just want to stick to this year, FY27, how do we see regular volumes growing?

I have to do like what we have always maintained that our aim is to grow the P&A segment, where we have upgraded our guidance from 20 to 25% for the current year. And regular brands, we only sell on those states where we make money, which we continue to do it. And depending on the industry there, we will get a similar kind of growth. But our focus is more on the P&A side.

Perfect. Sounds good. One last question, Abhishek ji, anything on dhar? Like, is there any development there? If you could share, would be helpful.

Bihar has been one of the largest markets when it was a wet state in terms of white spirits, and all our brands were very popular, 8pm, everything. So, obviously, we get good news what the industry has been waiting for more than a decade now. So, God knows. Right now, there is no noise as such.

Thank you. The next question is from the line of Nitin from HTC Securities. Please go ahead.

Yeah, thanks for taking my question. I have three questions related to P&A volumes. So, just wanted to have some clarity on Q2 volumes. So, like before FY26, we generally saw QOQ growth in Q2 versus Q1 of around 20 to 30%. So, I guess this reflects basically a dip in volume in summer months in Q1. So, do you see the trend resuming for this year where the Q2 will see another quarter of healthy volume growth for us in P&A?

We don't give quarter-on-quarter guidance, like we give an annual guidance, which we already have done, where we have increased the yearly guidance from 20 to 25%. I think what I can say, the brands are super buoyant, and we are seeing huge traction for the P&A category of radical sportswear.

Sure. Thank you. And second question pertains to like, we have grown 36% in P&A for first quarter. And for the full year, we are aiming for like 25% plus growth. If I consider 25%, then for the balanced nine months, it will be 22% growth. So, like, just wanted to have some clarity around Q1, like the volume growth, what we have seen in magic moments of around 43%. So, is there any loading one-off, or do you consider magic moment volumes can sustain million-phase monthly trends for the rest of the year?

Well, I'll say your first question first. Radigo never believes in loading the trade. That's why you see our outstanding, etc., is always because our credit control is very strong. And Magic, it is absolutely the tertiary sales which are happening. As I said, it's a multi-year structural change shift, which we are seeing in the vodka category. And what I can say is that month on month, we are seeing great traction in Magic Women's Vodka.

Sure. Thanks for the clarity. So that means like rest of the portfolio, if they sustain and magic moment sustains, then you can out deliver on your guidance for the full year. Thanks for that. And lastly, on this royalty volumes have seen a dip and with the Tamil Nadu sort of expected to see open up. So can you throw some light around like what exactly is happening with the royalty volumes?

The royalty volume which we had said that earlier we were not present on ourselves in Andhra, and when it opened up, we came and we said we convert everything into our own volume. That's why we become the largest there, 25% market share. And I think if Tamil Nadu opens, it will be anybody's there. At the moment, it's only Tamil Nadu where we are. Whatever small number you see, it's only Tamil Nadu.

Okay, okay. So, I was of the view that we don't have royalty in model in Andhra, but it was there, and now since we have shifted to our own, then royalty is coming down. Thank you. Thanks a lot, and all the very best for the future.

Thank you. The next question is from the line of Karan Kamdar from Choice Institutional Equities. Please go ahead.

Understood. Hope I'm honored. Congrats, sir, on like sort of cornering the vodka market. I believe we've made some great gains. And you already earlier said that you see the market has grown from 4% to 6%. Where do you see this vodka market ending up in the next two to three years? And do you think we would be able to sustain our market share gains? Because I believe some other brands are also growing too fast, at least in the near quarter. So that's my first question.

As I said, globally, vodka is 28. When I started magic in 2006, it was less than one. I would have never given 20 years to become at six. So I don't know what trend, but what we are seeing now in the last four, five years with 20% plus. Growth happening year on year, and it's now become with the Gen Z coming. Vodka is a more easy, mixable drink. It promotes the cocktail culture. It promotes the nightlife going out, like if you see the number of restaurants, which in India has started opening up. So I think it is all that culture and lifestyle which is supporting this sector to grow. So I think in the coming years... India is going to open up more. There will be more number of eateries. So I think that culture has started. That's why in my thing, I said, I see it as a multi-year structural shift towards a wide category happening.

Okay, well, sir. Answer on our defending our position. So, how would we sort of defend our position against the more luxury vodkas and the premiums and advance? Or those are two completely different techniques from Magic?

They are completely different. Like a Grey Goon, Calvita, they are very, very high price compared to Magic.

Okay. And any plans to launch mid-premium in the near future, given that mid-premium is a very lucrative category with high margins?

Something about magic?

Right now, we are concentrating more on the innovation, on the flavors, like the flavors of India, what we have launched. So, we want to get the ethnic flavors of India into this category. And I think it's doing extremely well with the 43% growth.

Thank you, sir, and all the rest.

Thank you.

Thank you. The next question is from the line of Akshay Krishna. Please go ahead. Hi, team.

So, my question is on this premiumization. So, this has been actually a consistent growth driver. Now, beyond this P&A volume, what are the next levers that will include the profitability? Is it going to be a premium mix within the P&A or pricing or an innovation or is it going to be the chain location of consumption?

I think the P&A is one part. The second is our luxury and semi-luxury portfolio. I think those are also really gaining a lot of traction. And the higher you go, higher your margins are and more profitable it is. So I think we are in the right direction. We are concentrating a lot on the on-trade channel. We are concentrating a lot on the advocacy to explain the differentiation between our malts and the global malts, so I think if I see India 10-15 years down the line, the luxury will be an important part of the portfolio, a very important part.

Got it. And this is a follow-up question to the previous participant on the acquisition part. Really, what would you consider as an inorganic opportunity at which point in time? And what are the gaps in portfolio would you like to address through appreciation rather than internal development?

As I told earlier, we have never acquired any brand, etc. And I think we have the capability of creating our own brand. And we have always believed in build versus buy. So I think our pipeline is quite robust. And we don't see any opportunity on acquiring a brand.

And last question is on the exports. Now, the Indian history is actually gaining global traction. Now, how do you see exports evolving over the next three to five years time period? And is the objective is to build a brand or is it meaningful profit contribution at your end?

See, in terms of our export, our brands are currently available in over 100 countries, and we've always believed in building brands. Than just pure selling, both in terms of our value for money or prestige and above category or the luxury category as well. We are not only catering to the Indian diaspora, but also to the mainstream consumers. The fact is the global travel retail as well. We currently in about 63. Travel retail outlets, and where we catering a luxury portfolio to travelers across the globe, all the mainstream consumers as well. And that will continue to remain our focus. And as you may have read, heard, or whatever, Rampur, Jaisarmer are one of the most loved brands globally coming from India. So that will continue to be our focus area.

I completely agree with that, sir. Just a final question on the same. I just wanted to follow up on this. What will be the volume stroke value contribution of Expose on our overall base?

Well, the volume is about 6%, 5% to 6% on that, and value is obviously higher.

Okay. Okay. Okay. Thank you, sir. Good luck.

Thank you. The next question is from the line of Atharba Jaya Prakash Bhandi from INI Capital Ventures. Please go ahead.

So, I had mainly two questions. I wanted to ask, how is our on-tread expansion going on? Like, we had plans for 1,000 events for FI 527. Are they going on track? And secondly, like, we had plans to expand from 50 airports to 100 airports, and is that also going on track?

Let me address the airports thing first. As I said, we were in 50, and as I said in the last question, we are now at 63. So that's very much on track, and we remain very confident of achieving that number of 100 in the coming years on that. In addition to that, we are also now with airlines as well. We are the only Indian single mall available on Air India. Our Jaisalmer gin is now available on SpiceJet as well. These are landmarks or milestones that we are achieving. And on the on-trade, I

think, as I said earlier, on-trade has been a major trust area for the last two to three years, because that is where the luxury drive. So, starting from manpower to the advocacy session to events, I think we are doing more than the numbers we are talking about. So, I think we've gone quite aggressive on the on-trade.

And secondly, I would like to ask, like, being a Gen Z myself, I don't see any influences on our... On our Instagram channel, promoting our products, like, I see many influencers from the other brands, like, they educate about our products, like, what kind of cocktails we can make from that product. So, it will, like, we see the vibe and go and try it. But I don't see about, like, that anything in our Instagram page. Are we having any plan to hire any influencers and do the same thing?

Yes, yes, there's very much, influences are a big draw these days, and we already have plans on that, and you will very soon see that coming on all our digital channels.

Okay, and lastly, I wanted to ask, like, are we planning any flavored brandy to occupy the South Indian markets? And also, are we planning any ready-to-drinks as we are seeing the home consumption expanse in metropolitan cities?

Not at the moment. Though we have in the international market flavored brandy, but not for the Indian domestic market. And RGD, we're not looking at that at the moment.

Okay, thank you.

Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks. Over to you.

To conclude, our performance this quarter reflects the continued success of our premiumization strategy, disciplined financial management, and consistent execution. Strong profitability and expanding margin and improved return ratios and healthy cash flow generation reinforces the quality of our business and gives us confidence in sustaining the profitable growth. Backed by a strong balance sheet and a growing premiumization portfolio, we remain well positioned to capitalize on future opportunities and create long-term value for our stakeholders. Thank you for joining us on this call today and for your continued support. We look forward of speaking with you again next quarter.

On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.