Premium push: Radico Khaitan sees 6x rise in shareholder value in 5 yrs
Radico Khaitan, the makers of Rampur single malt, is witnessing significant growth, driven by a strategic shift towards premium and luxury segments. The focus on high-margin products has resulted in a nearly six-fold increase in shareholder value, from ₹4,500 crore to ₹24,000 crore, managing director, Abhishek Khaitan told Mint in an exclusive interaction.
To cater to this significant demand for Indian single malts, the company has tripled its plant capacity over the years, and has expanded its premium product portfolio. Earlier this month, it introduced a new single malt variant, ‘Spirit of Victory 1999 Pure Malt Whisky,’ priced at around ₹5,000. Initially available in Uttar Pradesh, it will soon be introduced in other states.
“Now, our entire focus is on the premium and above segment, and we are one of the few brands to have created so many brands organically. This range is growing very well despite the regular range witnessing a decline,” said Khaitan. The company is confident of catering to the premium segment, buoyed by its position as the largest exporter of single malts, he added.
In FY24, Radico Khaitan derived 57% of its value from ‘prestige and above’ segment. In the current fiscal, it is up by 10%, to 67%. ‘Prestige and above’ is a classification used by spirits manufacturers to categorize products based on the selling price. This segment typically includes products priced above ₹1,000.
In the nine months ended December 2023, the company reported a gross profit of ₹11,984 crore, up 28% from ₹9368 crore a year ago. During this period, it sold 8.34 million cases of its prestige segment, which accounted for 44% of overall volumes, growing
22% over a year earlier. Revenue from the prestige category stood at ₹2,134 crore, up nearly 16% from the corresponding period of FY23.
The company’s journey started in 1998 with 8PM whisky, which gained in popularity. Over time, it diversified its product range and distribution network. However, the wafer-thin margins for regular spirits, prompted the company to shift towards premium products in 2016, and subsequently, it launched the Rampur single malt, Khaitan said.
“Indians are now proud drinkers of Indian single malts, which was never the case earlier. Foreign companies are also launching single malts, which is a testament to this fact,” he said.
Today, the Rampur brand boasts seven ‘expressions’ or variants, following the expansion of both distillation and maturation capacity from the initial 2.6 lakh kiloliter per day (klpd) plant. It had set up another 5 klpd plant at the same location in 2018-19. Notably, its signature reserve variant commands an impressive ₹5 lakh in duty-free shops.
In FY25, the company aims to produce 2.5-3 times the cases produced in FY24 at its new facility in Sitapur. This facility has additional maturation capacities to support the anticipated volumes growth of Rampur in the coming years.