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Liquor companies performed well supported by re-bound in Hyderabad sales

ICICIdirect Research 31 Oct 2025 DISCLAIMER

Radico Khaitan (RKL)
Revenues grew by 34% yoy to Rs1494 cr; driven by 37% volume jump in the IMFL segment.
Prestige and Above (P&A), contributes 38% of sales volume, grew by 24% (22% volume growth). Regulars segment grew by 83% due to change in the liquor policy in Andhra Pradesh.
EBIDTA margins improved by 129bps YoY to 15.9%; PAT grew by 69%yoy to Rs139cr.
View: Overall RKL’s performance was ahead of our expectation driven by sustenance of double digit volume growth in the IMFL segment. Management expects the growth momentum to sustain in the medium term. Backward integration and stable input prices to drive the margins ahead.
Reco:  We maintain our Buy rating with revised price target Rs3710.

United Spirits (USL)
Revenues grew by 11%yoy to Rs3,170cr; driven by 7.5% and 4% price/mix
Prestige & Above (P&A) volumes grew by 8% (saliency of ~90%), while popular segment volumes grew by 6%. 
Though Maharashtra (contributes ~25% to sales) witnessed double digit decline in volumes, it reaped the benefits of re-entry into the Andhra Pradesh and innovation in its premium portfolio.
Price mix and stable input prices led to 190bps yoy improvement in the gross margins to 47.1%. EBIDTA margins improved to 21.2% vs. 17.8% in Q2FY5. PAT grew by 41%yoy to Rs472cr.
View: We expect USL coming back to double digit volume growth once state of Maharashtra stabilises in base. Further street is keenly monitoring the steps take by new leadership to improve its market share in key markets.

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