Indian liquor maker Radico Khaitan reported a 19.4 per cent rise in second-quarter profit on Monday, driven by strong demand for its premium brands.
Consolidated net profit rose to Rs 61.87 crore in the three months to 30 September, from Rs 51.82 crore a year ago.
Since last year, the company has increasingly focused on expanding its premium segment, called ‘Prestige and Above’, catering to a consumer group largely unaffected by inflationary pressures.
Sales in the premium segment, which includes Magic Moments vodka and Jaisalmer gin, rose nearly 22 per cent to 2.8 million cases in the July to September period. The segment comprises nearly 41 per cent of total sales and over half of the total revenue.
Its low-priced segment sales, however, fell 16.5 per cent to 3.2 million cases.
Revenue rose 23.1 per cent to Rs 3,715 crore for the quarter.
“We expect demand momentum to improve with the upcoming festive season,” Chairman and Managing Director Dr Lalit Khaitan said in a statement.
Meanwhile, prices of Extra Neutral Alcohol, a key liquor-making ingredient, have risen due to high grain prices while other input costs, such as for glass, paper, and packaging, have fallen, analysts said.
This led to the company’s raw material costs spiking 15.4 per cent, resulting in total expenses increasing 23 per cent to Rs 3,632 crore.
Radico Khaitan is the first among major listed Indian liquor companies to report its results. Rivals United Spirits and United Breweries will report their results later this week.
Shares of Radico Khaitan closed 1.3 per cent lower ahead of its results. They have risen 28.7 per cent so far this year, compared to a 22 per cent climb in United Spirits and 6.5 per cent decline in United Breweries.
