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  • Radico Khaitan Profit Jumps 66.5% as Premium Liquor Sales Surge

    Radico Khaitan Profit Jumps 66.5% as Premium Liquor Sales Surge

    Indian distillers and brewers posted diverging September quarter earnings as affluent drinkers bought top-shelf liquor while inflation-squeezed consumers slashed purchases of entry-level brands.

    The divide cut across both spirits and beer, driving profit jumps at premium-focused producers while dragging on volume for mass-market operators.

    Spirits Split by Income

    United Spirits reported a consolidated revenue drop of 2.5 per cent to ₹7,014 crore for the September quarter, down from ₹7,199 crore a year earlier. Net profit fell 7.7 per cent to ₹428 crore. The slump was concentrated at the bottom of its portfolio: popular brands like Director’s Special and DSP Black saw sales value drop 22.7 per cent year-on-year to ₹181 crore, with volumes shrinking 29.7 per cent to 1.58 million cases.

    Its prestige and above category, which includes Johnnie Walker and Smirnoff, expanded 6.3 per cent. To maintain clean comparisons, the company shifted McDowell’s No.1 brandy from popular into prestige and above.

    Radico Khaitan experienced an even sharper contrast. Its prestige and above volumes jumped 36 per cent year-on-year to 5.28 million cases, while regular and lower-tier lines, including 8PM whisky and Contessa rum, fell 9.7 per cent. Total Indian Made Foreign Liquor volumes rose 7 per cent. Consolidated revenue climbed 10 per cent to ₹5,582 crore, and net profit surged 66.5 per cent to ₹232 crore.

    “We are seeing a lot of shift, especially with the Gen Z and the younger generation and the women coming in, their liking is towards the white spirits because it is more easily mixable,”

    Radico Khaitan managing director Abhishek Khaitan said during the earnings call.

    Beer Demand Shifts Upward

    United Breweries turned in a 16 per cent increase in overall beer volumes, propelled by high-margin lines. Premium beer volumes climbed 38 per cent year-on-year. Heineken Silver surged 67 per cent, while Kingfisher Ultra rose 44 per cent.

    Revenue rose 23.7 per cent to ₹4,623 crore. Net profit reached ₹134.8 crore, compared to ₹46.3 crore in the year-ago period, though that total was helped by ₹36 crore in interest income on an income tax refund.

    Allied Blenders, the maker of Officer’s Choice and Sterling Reserve, posted consolidated revenue of about ₹2,085 crore, up 6.8 per cent, with net profit rising 9.6 per cent to ₹69 crore. Overall volumes reached 10 million cases, an 11.1 per cent gain, lifted by its mass-premium brands Officer’s Choice Blue and ICONiQ White, which grew 15.5 per cent by volume.

    Margin Squeeze and Debt Pressures

    For retailers, pub chains and brand owners across Asia, India’s alcohol split shows that consumer spending is polarizing rather than rising evenly across society. Wealthy urban households are absorbing price hikes and trading up to imported labels or craft spirits, while lower-income blue-collar workers are cutting back or exiting the legal liquor market entirely. Companies with deep balance sheets can withstand the mass volume loss by chasing margin, but retailers relying on high-volume, low-margin shop turnover face leaner cash flows.

    Distillers that depend on commodity inputs cannot rely solely on price hikes to protect earnings. Higher grain, sugar, and glass packaging costs are hitting Indian producers at the same time state governments are slow-walking excise approvals. When lower-tier volumes vanish, factory fixed overheads get spread across fewer bottles, creating an unyielding drag on manufacturing margins.

    Acquisitions and Packaging Costs

    Raw material inflation already left a mark during the September quarter. Radico Khaitan chief financial officer Dilip Banthia noted that packaging and raw material inflation took a ₹27 crore bite out of quarterly earnings, even though gross margin expanded 440 basis points to 48 per cent on favorable product mix.

    Tilaknagar Industries recorded revenue of ₹2,437 crore, rising 171.8 per cent from ₹896.9 crore a year earlier, while volumes reached 8.9 million cases. Those figures reflect its buyout of Imperial Blue, masking the baseline organic trend. Brokerage Nuvama Institutional Equities estimated raw material costs shaved about ₹25 crore off Tilaknagar’s operating profits in each of the first two quarters of fiscal 2027.

    Brewers face similar cost burdens heading into the second half of the fiscal year. United Breweries projected input cost inflation will reach between ₹350 crore and ₹400 crore for fiscal 2027, leaving the group dependent on pending state-level pricing approvals to keep profit margins intact.

  • United Spirits Popular Liquor Sales Fall 22.7% to Rs 181 Crore

    United Spirits Popular Liquor Sales Fall 22.7% to Rs 181 Crore

    United Spirits posted a 22.7 per cent drop in net sales value for its popular liquor segment to Rs 181 crore during the second quarter of FY2027.

    The Diageo-owned alco-bev giant reported the decline on Wednesday, attributing the drop to increased taxes on non-local brands in Maharashtra and excise duty changes in Karnataka.

    Overall net sales value across the company nonetheless climbed 2.8 per cent to Rs 3,258 crore for the quarter, bolstered by growth in its premium and luxury liquor portfolios.

    State Levies Hit Entry Shelves

    Maharashtra created a regulatory split by establishing a preferential framework for Maharashtra Made Liquor. The state instituted a separate category for locally produced spirits with lower duty rates, while hiking excise duties on standard Indian-made foreign liquor. The tax gap handed domestic distillers an immediate retail edge across neighborhood bottle shops.

    Karnataka simultaneously overhauled its excise slabs. The southern state began shifting its tax collections from product retail value toward alcohol content, compressing the total number of pricing bands. The revision squeezed manufacturer realizations and stalled distribution volumes across lower-priced labels.

    Premium Labels Cover the Margin Gap

    Higher-margin spirits filled the gap created by the mass-market pullback. The Prestige and Above portfolio advanced 6.3 per cent in net sales value in the second quarter, aided by flavoured Smirnoff line extensions, the market relaunch of J&B Scotch, and broader gains in its luxury portfolio.

    The shift insulates Diageo from local excise volatility in low-margin categories. Premium spirits buyers absorb periodic tax increases far better than daily-wage or price-conscious consumers, allowing the company to defend total top-line numbers even when provincial tax boards target cheaper bottles.

    Distillers Diverge on Mass Brands

    State-level alcohol policy in India forces beverage manufacturers to pick a lane. Distillers with heavy mass-market footprints must either accept lower factory-gate realisations when local governments protect domestic producers or abandon low-margin distribution entirely. Several domestic rivals continue to chase mass volume through localized bottling units, but the economics look increasingly precarious under content-based excise systems.

    United Spirits has steadily reallocated capital toward upper-tier bottles, leaving low-margin labels exposed to state tax shifts. Distributors and liquor store operators now face a clear split: thin margins on commoditised local booze or higher ring sizes on imported and premium Indian-made bottles.

    Exports and Local Regulations Cool First-Half Momentum

    Prestige and Above net sales value grew 7.8 per cent over the full first half of financial year 2027. That performance lifted company-wide half-year net sales value by 4.2 per cent to Rs 5,961 crore.

    Management reported that stronger demand for local innovations was partially curbed by regulatory barriers in Maharashtra and logistics friction within export operations. Total volumes would have tracked higher without the supply interruptions overseas.