Radico Khaitan has had a quarter to remember. The maker of Magic Moments Vodka and Rampur Single Malt closed FY26 with its highest-ever EBITDA margin, outpacing every major peer in premium sales growth. It is now within touching distance of turning debt-free. Unsurprisingly, JM Financial isn’t backing down from its bullish call. 

The brokerage has maintained its Buy rating on the stock and raised its 12-month price target to Rs 3,945 from Rs 3,470, which is an upward revision of nearly 14%, as per JM Financial. This implies another 13% upside from current levels. 

But what exactly is driving that conviction? Three things stand out from the brokerage’s note.

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Premium brands are doing the heavy lifting

The headline number from Radico’s fourth quarter was revenue growth of 15.3% year-on-year to Rs 15 billion. According to the JMFL report, the real story was in the premium and above, or P&A, segment, which grew 29% year-on-year despite what JM Financial described as a high base. Volume growth in the P&A segment came in at around 28% for the quarter.

To put that in context, United Spirits, Radico’s much larger rival, posted P&A sales growth of just 5% in the same period. United Breweries actually saw revenues fall 3.2% year-on-year. 

Magic Moments Vodka, which accounts for half of the P&A portfolio, clocked volume growth of 21% for the full year and 28% in the fourth quarter alone. After Dark Whisky grew over 60% and crossed 3.1 million cases. The luxury portfolio, which includes Rampur Single Malt, Jaisalmer Gin and the Spirit of Kashmyr, grew around 40% in FY26 and touched Rs 475 crore in sales value.

According to the report, the company plans around 2,000 on-trade advocacy sessions next year and aims to grow its airport presence from 50-plus to 100 over time.

Margins hit a record 

As per the report, EBITDA margin came in at 18.9% against JM Financial’s estimate of 16.5%. JM Financial stated that raw material costs were benign, contributing around 225 basis points of gross margin gain on their own. The regular segment, by contrast, saw volumes and sales fall over 10% and 14% respectively, partly due to policy changes in Maharashtra and Karnataka, but that actually helped margins since it shifted the overall mix upward. Gross margin for the quarter came in at 48%, up 450 basis points year-on-year.

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Advertisement spend was kept calibrated at 6.7% of IMFL sales versus 7% in the base quarter, the report added.

Furthermore, the brokerage has revised its FY27 and FY28 earnings estimates upward by 8-9%.

Radico targets being debt-free by H1 of FY27

A year ago, Radico carried total debt of Rs 630 crore and net debt of Rs 330 crore. By the end of FY26, those numbers had dropped to Rs 330 crore and Rs 240 crore respectively, as per the JM Financial report. The company has now told investors it expects to be net debt-free by the first half of FY27.

That matters for two reasons. First, lower interest costs are already flowing through to the bottom line, which means net profit for the quarter nearly doubled, growing 93% year-on-year to Rs 180 crore, partly because interest expense fell 28%, the report noted. Second, a cleaner balance sheet combined with lower capital expenditure, FY27 capex is guided at Rs 160 to 175 crore, down from Rs 240 crore in FY26, the report added. 

JM Financial projects ROIC improving to 22.4% in FY27 and 24% in FY28, up from 20.3% in FY26. The board has also set a minimum dividend payout of 20% of profit after tax, giving shareholders a clearer return framework as the debt burden disappears.

As management itself pointed out, white spirits in India account for just 4.5% of the overall market, against 28-29% globally. 

Radico Khaitan share price performance

Radico Khaitan’s share price has been flat as of intraday on May 11, 2026. The stock has been up nearly 29% in the past month, and it has been further up nearly 43% in the past year.