Why the Alcohol Segment is Poised for Growth and Why Radico Khaitan is Well-Positioned

India’s alcohol industry is undergoing a significant shift from volume-driven, mass-market sales to premiumisation, with consumers increasingly opting for higher-quality, pricier spirits like whisky. This trend has been driven by evolving consumer preferences, rising disposable incomes, and a focus on brand value, leading to stronger profitability for companies that cater to the premium and prestige (P&A) segments. The regular segment has shrunk at a 5% CAGR over five years, while mid and upper-tier categories have grown at 11% and 6%, respectively. The P&A segment alone grew 6% YoY in 2024, with its share in overall volumes of top players rising from 27% in 2019 to 39% in 2024. Brands like Iconiq White, After Dark, and Royal Stag are witnessing robust demand and strong volume growth. Radico Khaitan is well-positioned to benefit from this shift. It holds an 8% market share in the P&A segment and dominates the P&A Vodka category with over 80% share. The company has also expanded its luxury portfolio with brands like Ranthambore and Jaisalmer. With a growing distribution network, regulatory tailwinds in key states, and the India-UK FTA reducing import duties on premium spirits, Radico is set to see double-digit volume growth in the P&A segment. Brokerage Motilal Oswal sees a 15% upside for Radico, projecting a 21% CAGR in the P&A segment and a 16% revenue CAGR through FY28. Despite margin pressures from raw material costs, the company is improving operational efficiency and plans to boost in-house production, which will further strengthen its position. As the industry shifts toward premiumisation and high-margin products,

(Radico Khaitan) stands out as one of the most strategically aligned players to capitalise on this long-term growth opportunity.