Radico Khaitan Ltd. Reports Very Positive Quarterly Financial Performance Amid Strong Market Returns

Quarterly Financial Highlights Demonstrate Strong Growth Momentum

In the December 2025 quarter, Radico Khaitan achieved net sales of ₹1,546.75 crore, the highest quarterly figure recorded by the company to date. This represents a significant acceleration compared to previous quarters and underscores the company’s ability to expand its market share in the competitive beverages industry. Operating profit before depreciation and interest (PBDIT) also reached a record ₹267.19 crore, reflecting effective cost management and operational efficiencies.

The operating profit margin expanded to 17.27%, the highest quarterly margin in recent history, signalling improved pricing power and favourable product mix. Profit before tax (excluding other income) surged to ₹213.41 crore, while net profit after tax (PAT) rose to ₹162.10 crore, both marking all-time highs for the company. Earnings per share (EPS) correspondingly increased to ₹11.57, reinforcing the company’s enhanced profitability profile.

Financial Ratios Reflect Strength and Stability

Radico Khaitan’s return on capital employed (ROCE) for the half-year period stood at an impressive 19.28%, the highest recorded in recent years. This metric highlights the company’s efficient utilisation of capital to generate profits. The operating profit to interest coverage ratio also improved markedly to 16.27 times, indicating a comfortable buffer to service debt obligations.

Moreover, the company’s debt-equity ratio remains conservatively low at 0.21 times, underscoring a strong balance sheet and prudent financial management. However, cash and cash equivalents for the half-year period were at a low ₹53.91 crore, which may warrant monitoring to ensure liquidity adequacy amid expansion plans.

Financial Trend Upgrade and Market Reaction

The company’s financial trend score has improved significantly from 19 to 25 over the past three months, reflecting a shift from positive to very positive performance. This upgrade was officially recognised on 5 January 2026, coinciding with an upgrade in the Mojo Grade from Hold to Buy, supported by a Mojo Score of 70.0. The market responded favourably, with the stock price rising 5.69% on the day of the latest update, closing at ₹2,996.00.

Despite a year-to-date (YTD) return of -9.11%, Radico Khaitan’s longer-term performance remains exceptional. Over one year, the stock has delivered a 36.18% return, significantly outperforming the Sensex’s 7.73% gain. Over three and five years, the stock’s returns have been 184.59% and 481.86% respectively, dwarfing the Sensex’s 35.77% and 68.39% gains. The ten-year return is particularly striking at 2,580.98%, compared to the Sensex’s 236.83%, highlighting the company’s sustained value creation for shareholders.

Industry Context and Competitive Positioning

Operating within the beverages sector, Radico Khaitan competes in a dynamic market characterised by evolving consumer preferences and regulatory challenges. The company’s ability to deliver margin expansion and revenue growth in this environment is notable. Its low debt-equity ratio and strong interest coverage ratio provide financial flexibility to invest in brand building and product innovation, which are critical for sustaining growth in the sector.

While the company’s cash reserves are relatively low, this is balanced by its strong operating cash flows and disciplined capital expenditure. Investors should monitor liquidity trends closely, especially if the company pursues acquisitions or aggressive expansion strategies.

Valuation and Outlook

At the current price of ₹2,996.00, Radico Khaitan trades below its 52-week high of ₹3,695.00 but well above its 52-week low of ₹1,846.10, reflecting a recovery phase after recent market volatility. The company’s upgraded financial trend and improved profitability metrics support a positive outlook. The Buy rating and Mojo Grade upgrade suggest that the stock is favourably positioned for further appreciation, assuming continued execution of growth initiatives and stable macroeconomic conditions.

Investor Considerations

Investors should weigh Radico Khaitan’s strong recent financial performance and long-term track record against potential risks such as liquidity constraints and sector-specific challenges. The company’s very positive financial trend and upgraded Mojo Grade indicate improving fundamentals, but market volatility and competitive pressures remain factors to monitor.

Given the company’s demonstrated ability to generate high returns on capital and expand margins, it remains an attractive proposition for investors seeking exposure to the Indian beverages sector with a mid-cap growth orientation.

Conclusion

Radico Khaitan Ltd.’s December 2025 quarterly results mark a significant milestone in its financial trajectory, with record revenues, profits, and margin expansion driving an upgrade in its financial trend and investment rating. The company’s strong balance sheet metrics and impressive long-term stock returns relative to the Sensex further reinforce its appeal. While some liquidity caution is warranted, the overall outlook remains positive, positioning Radico Khaitan as a compelling stock within the beverages sector for investors focused on quality growth and value creation.

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