Are Radico Khaitan latest results good or bad?

Radico Khaitan's latest financial results for Q2 FY26 reflect a combination of strong operational performance and some seasonal challenges. The company reported net sales of ₹1,493.93 crores, which represents a year-on-year growth of 33.83%, although there was a marginal sequential decline of 0.80% compared to the previous quarter. This decline is typical for the beverage industry during the monsoon months.
Net profit for the quarter reached ₹139.56 crores, marking a significant year-on-year increase of 73.02% and a sequential growth of 6.93%. The operating profit margin improved to 15.91%, the highest in eight quarters, indicating effective operational efficiencies and a favorable shift towards higher-margin premium products. This margin expansion occurred despite inflationary pressures on raw materials, showcasing the company's successful premiumisation strategy.

The company's return on equity for FY25 was reported at 12.48%, reflecting efficient capital utilization, although it remains below some industry peers. The balance sheet appears healthy, with a net debt to equity ratio of 0.25 times and an interest coverage ratio of 14.60 times, indicating strong debt servicing capability.

Overall, Radico Khaitan's performance underscores its strategic focus on premiumisation and market share gains in high-margin segments, contributing to robust revenue growth and improved margins. However, the company has experienced an adjustment in its evaluation, reflecting the ongoing discussions among investors regarding its premium valuation relative to growth expectations.