Two shot glasses of vodka sit on a table. (Photographer: Qilai Shen/Bloomberg)

Q2 Results: Prices Hikes, Lower Raw Material Costs Aided Radico Khaitan’s Margin

Radico Khaitan Ltd. said price hikes and lower prices of molasses helped the maker of 8 PM whisky improve its operating margin in the quarter-ended September.

The margin expansion is a reflection of the full-year impact of price hikes taken last year in the southern states, said Dilip Banthiya, chief financial officer of Radico Khaitan, told BloombergQuint in an interaction. “Softer molasses (a sugar byproduct) prices are also an advantage; expectation of higher sugarcane production till FY20 is also a favourable situation.”

The new excise policy in Uttar Pradesh aimed at curbing cartelisation in India’s most populous state and digitalisation of the tender process increased the sales volume by nearly 40 percent in the last six months, he said.

Key Earnings Highlights

  • Net profit rose 70.7 percent year-on-year to Rs 49.5 crore.
  • Revenue rose 15.6 percent to Rs 518 crore.
  • Ebitda up 39.4 percent at Rs 92 crore.
  • Margins at 17.8 percent versus 14.7 percent.

Watch the full interaction here: