Radico Khaitan Limited , one of India's largest alcobev companies, has announced a strategic partnership and investment in D'Yavol Spirits, a move that promises to reshape the premium spirits landscape in India and globally. The company will acquire a 47.5% equity stake in both D'Yavol Spirits B.V. and D'Yavol Spirits Private Limited for a total investment of up to Rs. 40.00 crore (400.00 million rupees).

Strategic Partnership

This landmark collaboration brings together Radico Khaitan's industry expertise with the star power of Shah Rukh Khan, the entrepreneurial vision of his son Aryan Khan, and the business acumen of Nikhil Kamath, co-founder of Zerodha. The partnership aims to create a new-age alcobev company focused on liquid excellence, disruptive design, and cultural resonance.

Investment Details

Radico Khaitan will become the largest shareholder in both D'Yavol Spirits B.V. (a Dutch company) and D'Yavol Spirits Private Limited (an Indian entity). The investment gives Radico Khaitan significant ownership while maintaining D'Yavol Spirits as a non-wholly owned subsidiary.

Board Composition and Governance

The board of the new venture will consist of four members, with Radico Khaitan nominating two directors. A Radico Khaitan nominee will serve as the Chairperson of the Board(s)/Company(ies). Strategic, financial, and structural decisions will require the consent of all shareholders, ensuring a balanced approach to governance.

Product Focus and Market Strategy

D'Yavol Spirits is set to launch its first product, a luxury tequila, in the coming months. The venture will focus on creating internationally relevant, bottled-in-origin luxury brands for both Indian and global consumers. This aligns with Radico Khaitan's strategy of 'Taking India to the World' through its luxury portfolio.

Leadership Perspectives

Abhishek Khaitan, Managing Director of Radico Khaitan, expressed enthusiasm about the partnership, stating, "This is a long-term investment into a vision that complements Radico Khaitan's ongoing growth trajectory while opening new doors in the world of luxury spirits."

Shah Rukh Khan added, "With Abhishek's experience, Nikhil's passion, and our creative instinct at D'YAVOL, we are building something bold, relevant, and future-facing."

Aryan Khan, Co-Founder of D'Yavol, emphasized the brand's cultural ambitions: "Our ambition is to shape a brand that doesn't just sit on a shelf but lives in culture."

Market Opportunity

The partnership addresses the fast-growing tequila industry and other niche categories, leveraging D'Yavol team's creative streak and Radico's global distribution and marketing strength. With the premiumization of India's alcobev landscape, D'Yavol Spirits is well-positioned to cater to a rising generation of discerning consumers who value substance over noise.

This strategic move by Radico Khaitan not only extends its influence into the next generation of premium spirits but also reiterates its position as an industry pioneer, charting paths of growth and innovation in the global spirits market.

Radico Khaitan , a leading Indian spirits manufacturer, has reported exceptional performance for the first quarter, setting new records in volumes, net sales, and profitability.

Strong Volume Growth and Premiumization

The company witnessed a remarkable 37.5% year-on-year growth in Indian Made Foreign Liquor (IMFL) volumes, reaching 9.72 million cases. This growth was primarily driven by robust demand for premium brands. The prestige and above category volumes surged by 41%, while value terms grew by an impressive 43%.

Margin Expansion and Financial Performance

Despite higher marketing expenditure, Radico Khaitan's EBITDA margin expanded from 13.0% to 15.3%. The company attributes this improvement to economies of scale and a favorable product mix. Management has raised its margin expansion guidance to 125-150 basis points annually for the next three years, aiming to reach the late teens.

New Product Launches

Radico Khaitan has strengthened its premium portfolio with two significant launches:

1. Morpheus Super Premium Whisky: This marks the company's entry into the fast-growing super premium whisky segment, addressing a gap in their portfolio.

2. The Spirit of Kashmyr: A luxury vodka aimed at competing with imported brands in the premium segment.

Performance of Existing Brands

• Royal Ranthambore: The brand, operating in the Bottled in India Scotch category, delivered exceptional 90% growth this quarter.
• Magic Moments: The flagship vodka brand posted a solid 20% volume growth.
• After Dark Whisky: The brand is on track to double its volume in the current fiscal year, having sold 1.9 million cases last year.

Market Share Gains

Radico Khaitan has significantly increased its market share in Andhra Pradesh, growing from 10% in the first half to over 28%, which is the highest in the industry.

Financial Outlook

The company is poised to deliver over 20% overall volume growth, with robust contribution from the prestige and above category. Management expects to generate Rs. 500.00 crores in revenue from luxury and semi-luxury brands.

Debt Reduction

Net debt reduced by Rs. 164.00 crores, primarily due to improved profitability and working capital reduction. The company aims to be almost debt-free by FY27.

Industry Trends and Future Outlook

Radico Khaitan's management sees a structural shift in the Indian alcoholic beverage industry towards more lifestyle-driven consumption. The company is well-positioned to capitalize on the increasing demand for premium and luxury segments, driven by rising affluence and evolving consumer preferences.

With a strong innovation pipeline and strategic focus on premiumization, Radico Khaitan remains optimistic about its growth trajectory in the coming years. The company continues to invest in brand building and expanding its presence across various price segments in the Indian spirits market.