Mumbai: India’s second largest liquor manufacturer Radico Khaitan Ltd on Tuesday posted a healthy quarterly performance aided by a rise in sales of high margin premium brands, a top official said.
The firm on Tuesday posted a June quarter net profit of Rs160.5 million, up from Rs107 million. Its net sales grew by 19% to Rs3.26 billion.
“Premiumisation is the main reason behind our results. Our premium brands which are high value products have done very well,” said Abhishek Khaitan, managing director told Reuters.
Indian made foreign liquor (IFML), which consists of semi-premium, premium and super premium brands and consists of 80% of total sales of the company, grew by 17% this quarter from a year ago.
The firm, which did not see much relief from soft raw material prices in this quarter, expects falling prices to benefit margins in the upcoming quarters.
“Key raw material prices such as molasses have seen a good downtrend from April onwards but we haven’t see that affect in the current quarter on our numbers as we have been carrying a high inventory of molasses and alcohol,” Khaitan said.
“From the second and the third quarter the benefit should come in our books as prices will either stay in the same range or go down further,” he said.
Radico, which has brands such as 8 p.m. Whiskey, Magic Moments vodka, Contessa Rum and Old Admiral Brandy in its portfolio has introduced one more premium brand to its product portfolio this quarter.
“We have launched After Dark in the premium whiskey category this quarter and plan to launch another brand in the super premium range next fiscal,” he said. The liquor maker has revised its topline growth target to 20-25% from the earlier 20-22% and said it’s bottomline is seen growing 50% this fiscal.
The firm has also set a capital expenditure of Rs300-400 million for the current fiscal, Khaitan said.
Shares of the firm ended 3.8% down at Rs130.25 in a firm Mumbai market.