Radico Khaitan, an Indian liquor manufacturer, announced a 19.4% increase in its second-quarter profit on Monday, attributed to robust demand for its high-end brands.
The consolidated net profit for the three months ending on September 30 increased to 618.7 million rupees ($7.4 million) from 518.2 million rupees compared to the same period last year.
Over the past year, the company has placed a growing emphasis on the expansion of its premium category, known as ‘Prestige and Above,’ targeting a consumer demographic that remains largely unaffected by inflationary pressures.
The premium segment’s sales, encompassing products like Magic Moments vodka and Jaisalmer gin, surged by almost 22% to reach 2.8 million cases during the period from July to September. This segment represents nearly 41% of the overall sales and contributes to over half of the total revenue.
In contrast, the sales of its lower-priced segment declined by 16.5% to reach 3.2 million cases.
The revenue increased by 23.1% to reach 37.15 billion rupees 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.
At the same time, analysts noted that prices for Extra Neutral Alcohol, a crucial ingredient in liquor production, have increased due to elevated grain prices, while other input costs like those for glass, paper, and packaging have decreased.
As a result, the company experienced a 15.4% surge in its raw material costs, leading to a 23% rise in total expenses, amounting to 36.32 billion rupees.
Radico Khaitan is the first major listed Indian liquor company to report its results. Rivals United Spirits and United Breweries will report their results later this week.
Radico Khaitan’s shares concluded 1.3% lower prior to its results. Year-to-date, they have surged by 28.7%, contrasting with a 22% increase in United Spirits and a 6.5% decrease in United Breweries.