Radico Khaitan (NSE:RADICO) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Radico Khaitan Limited Q1 FY 'twenty seven Earnings Call. As a reminder, all participant lines will be in a listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to mister Manoj Menon. Over to you, sir. Hi, everyone. It's a wonderful, you know, good evening to all of you. Today, we have with us Mr. Abhishek Khaitan, Managing Director Mr. Dilip Bantia, Chief Financial Officer Mr. Sanjeev Bhanga, President of International Business and Mr. Sury Rupadhyay, Chief Sales Officer, all representing Radico.

0:52 Now I would like to hand over the call to Mr. Abhishek Khaitan for his opening remarks. Thank you and over to you sir. Good afternoon ladies and gentlemen and thank you for joining us on Radico Khaitan's Q1 FY twenty twenty seven Earnings Conference Call. We are pleased to report another strong quarter carrying forward the momentum from FY twenty twenty six. During Q1 FY twenty twenty seven, we reported highest ever quarterly volume of 10,000,000 cases, revenue of INR1684 crores and EBITDA of INR348 crores. Our performance was driven by the continued success of our premiumization strategy with our P and A portfolio delivering 36% volume growth during the quarter and significantly outpacing the industry.

1:50 Despite a dynamic global environment marked by geopolitical uncertainties and supply chain challenges, we expanded our operating margins through a richer product mix, disciplined cost management and continued operational excellence. The quarter was also a strong demonstration of our ability to translate strategy into execution. Alongside robust business performance, we expanded the distribution of our luxury portfolio, strengthened brand advocacy through consumer experiences, significantly enhanced our on trade presence and forged strategic partnerships that will support long term brand equity.

2:37 These initiatives reinforce our confidence that the investments we continue to make behind our brands are creating a stronger and more sustainable platform for future growth. Turning to our brand portfolio. We believe India's vodka category has entered a multiyear structural growth phase, driven by changing consumer preferences, favorable demographics, premiumization and evolving consumption occasions. India's vodka category has grown at over 20% CAGR between FY 'twenty two and FY 'twenty six, significantly ahead of broader growth.

3:28 While vodka accounts for nearly 28% of the global spirits market, its share in the Indian industry has increased from 4.6% in Q1 FY 'twenty six to 6% in Q1 FY 'twenty seven. This highlights the accelerating pace of category development and the significant headroom that remains. Market movement continues to lead the category with over 60% market share and even stronger position in its core price segment. The brand delivered a landmark performance during the quarter with 3,250,000 cases at a growth rate of 43% year on year.

4:19 In value terms, the growth was 51%, indicating a strong premiumization trend. The performance was driven by strong consumer acceptance and our flavor led innovation strategy. Flavored vodka industry today account for 75% of our volumes, up from 65% last year. Vodka also offers attractive unit economics supported by lower production costs and significant premiumization potential, making it one of the most attractive long term growth strategies within the Indian alphabet industry. Going forward, we will continue to focus on new flavor innovations to drive the industry and sustain strong growth in our portfolio.

5:14 Across our broader premium portfolio, Royal Anthem Board, eight pm Premium Black and After Dark Blue continued to build strong consumer traction, each supported by differentiated brand building initiatives. The limited edition Royal Anthem Board has been well received with its storytelling around India's six legendary tigers, strengthening the brand's senior positioning while supporting wildlife conservation. Eight pm Premium Black gained further momentum during the quarter supported by its partnership with Sunrise and Hyderabad in the recent IPM season. Improved brand visibility and strong consumer acceptance contributed to a healthy increase in market share in key markets.

6:07 The recently introduced contemporary packaging for After Dark Whiskey is expected to further enhance the brand's premium appeal and support market share gains in the largest whiskey segment of the industry. Looking ahead, we expect our P and A portfolio to deliver over 25% volume growth during FY 'twenty seven, supported by a robust innovation pipeline, expanding distribution and favorable industry trends. With premium brands accounting for an increasing share of our business, we remain confident of sustaining EBITDA margin of around 20% for FY 2027, while continuing to invest behind our brands and strengthen our long term competitive position.

6:59 With that, I would now like to hand over the call to our CFO, Dilip Pantia, for a detailed review of our financial and operational performance. Thank you everyone and over to you Dilip. Thank you, Abhishek. Thank you everyone for joining us on this call today. FY twenty twenty seven has started with a strong financial momentum as we continue to deliver higher profitability, margin expansion, improved returns and strong cash generation. Our performance is testament to the strength of our business model driven by premiumization, operating leverage, input cost stability and persistent focus on disciplined execution and capital allocation.

7:48 During quarter one of FY twenty twenty seven, we delivered a strong all round performance with total IMFL volume of 10,000,000 cases, reflecting 3% year on year growth. The prestige and above category continued its strong upward trajectory, recording 36% volume growth. This performance was supported by a strong brand momentum and premiumization led mix improvement. Regular volume degrowth was due to higher base of quarter one of FY twenty twenty six after the change of route to the market in the state of Andhra Pradesh and impact of policy changes in Maharashtra and Karnataka. On profitability front, gross margin during the quarter was 49.1%, representing six ten basis point expansion on year on year basis and 110 basis point expansion on quarter on quarter basis.

8:48 Gross margin improved on year on year basis due to relatively benign raw material scenario coupled with ongoing premiumization. Raw material accounted for 75 basis points of gross margin expansion during the quarter. This is despite the recent volatility in the packing material prices, which resulted in approximately INR30 crores of financial impact. While company continues to monitor the West Asia crisis, we are confident of our margin expansion trajectory in FY twenty twenty seven. Furthermore, the impact of price increase in quarter one of FY twenty twenty seven is about 75 basis points. EBITDA margin for the quarter stood at 20.7%, expanding by five thirty six basis points on a year on year basis, highest ever level.

9:43 This strong improvement reflects the success of our premiumization strategy, better operating efficiencies and continued cost discipline. It also highlights the benefit of consistent investment in building a strong premium luxury portfolio over the years. Building on our strong financial performance, both ROE and ROCE improved during the quarter supported by higher operating profit and better asset utilization. As the premium and luxury portfolio continue to expand, we expect our capital efficiency and return ratios to further improve. Further extending our financial position, we have reduced our net debt by INR138 crores since March 26, supported by a healthy profitability and robust cash generation.

10:40 Our balance sheet remains strong. We are on track to become net debt free by quarter two of FY twenty twenty seven. We remain disciplined in our approach to capital allocation with CapEx directed towards maintenance, operational efficiency and essential capacity optimization. Looking ahead, our priority remains clear, driving profitable growth, maintaining a strong balance sheet, improved capital efficiency and creating long term shareholder value. With that, we now open the lines for questions. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touch tone phone.

11:31 If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aditya Suman from CLSA India Private Limited. Hi. Good evening, and thanks for the opportunity.

12:18 So so two questions from me. One, can you give us a sense of growth for key luxury brands like Rampur, maybe RADICO and any others you want to call out? And then the total sort of luxury brand sales or and if you can give us some sense of the growth on these brands? And the second question is on the margins. Obviously, very strong performance in this quarter. What... How do you see these margins sort of sustain and evolve from here? Any sense on that, particularly if, let's say, E and A costs were to rise again down the line? Corollary to that is how much of a connection is there to E and A costs anymore, given that you are selling a lot more P and L products? Thanks.

13:10 To answer your first question on the luxury portfolio, last year we had a total turnover of about INR475 crores which came from our luxury portfolio. And we gave a guidance of 25% increase in the fair value of our luxury portfolio. And I think we are on absolute target to achieve the 25% growth in our luxury portfolio. And second, about your margin question, we've already given a guidance that we are confident of achieving 20% EBITDA margin in the current year, where there will be pluses, there can be minuses, but overall we feel because of our strong momentum growth in the P and S segment, we should be able to sustain these margins.

14:05 Very clear, Ashish. I think on the second question, just a quick follow-up. Again, I saw the guidance on the 25% growth. My question was, do you think this is the right level of 20% margin? Do you think this is the right level of margin on a steady state basis? Or do you think there's still room for further expansion? What we are guided, we have achieved in one year. So I think first, we are looking at 20%. And when we come closer to the year, more clarity will come. So I think as of now, we stick to the 20% EBITDA margin for the current year. Very clear. Thank you very much.

14:52 Thank you. The next question is from the line of Thiraj Mistry from Jefferies. Please go ahead. Hi. Thank you for the opportunity, and congrats on good set of numbers. My first question is on Morpheus whiskey that we launched in above prestige segment, where are we in our journey and how has that brand been scaling up now? Hi, this is Sudhir Upadhyay. See, Morpheus whiskey is launched in quite a competitive segment, which is large enough. So the brand is right now we have launched in around 10 to 12 states. We have initial amount of traction, but I think it's a journey which will go on because it's a competitive segment. So we'll still wait and watch for the results to come from office. Yes.

15:43 Got it. And how's the initial response? Let's say, whatever you have gathered from this 10 states, are you gaining or let's say, how's the consumer traction from this brand? See, the way we work on, we completely believe in the distribution part. We believe in the full strategy. So distribution has done. There is a positive side of traction, which is there from consumer in some of the markets. And we know that it will take some amount of time in seeding and all. So as of now, it is positive and we will keep on pushing the brand. Got it. And in line with that question, in this current financial year, which would be the wide gaps you would like to fill in your portfolio?

16:30 In the current fiscal, there'll be more innovation which will be coming in the vodka side of new flavors being added. Plus by the in the current year itself, we will be getting our tequila also. So these will be the few items and rest, we have enough plans on our platter and enough growth which now has started taking shape like the Royal Anthem Board, Sinhal, which has got a huge response from the market. So I think we are going to concentrate in the current year on all these brands. Got it. And second question is on margin front. So 20.7% margin is quite excellent. But can you divide this margin between your non IMFL business and IMFL business for the quarter?

17:26 Non IMFL business generated margin around 11%, 11.5% and the rest margins like the overall margin is 20.7%. So you can work out, I think it is 23% plus on the IMFL business. Got it. But is this 11%, 11.5% for non IMSL businesses sustainable? Because historically, there has been quite volatile performance, let's say, from mid single digit to high single digit, we usually report and compared to that 11% looks high? Generally, the margin used to be in the range of 8% to 11% in the past, but because of some inflationary pressure two years back, the margin came down to mid single digit and 67%.

18:16 But we feel that these are sustainable margins on ISLDs. Got it. Got it. And last question from my end is on capital allocation. Given that we have only INR 100 crore of debt and we would be virtually become debt free next quarter onwards. And I know that you have already announced 20% dividend payout policy, but after incurring INR 150 to INR 200 crore of CapEx also there would be substantial money would be left on the table. What's your future plan for that? Let's say you would be increasing your dividend payout ratio or would do some CapEx or acquisition on that front? See right now we have made a target of becoming a debt free company which we are going to become a debt free company.

19:05 Last quarter we also announced a minimum dividend distribution policy of 20%. So I think once we're becoming a debt free and the cash coming, its acquisition we will go for any acquisition only if it makes sense to the shareholders, because if you see the history of Radico, we have always grown organically. So as of now, there is our maintenance CapEx would be in the range of INR150 crores to INR170 crores and rest of the money as both the sides will be in that. Got it. Thank you and all the best. Thank you. The next question is from the line of Harit Kapoor from Investec.

19:52 Please go ahead. Yes. Hi. Good evening, and congrats again on an exceptional set of numbers. Just had two questions. We know one was an after dark. You know, the the brand has done exceptionally well, you know, since you relaunched it a few years back. I was just trying to understand that given that the trajectory has been very strong even last two years, what prompted a kind of repackaging, relaunch kind of a strategy because it was anyways doing very well? Is it centered around certain markets that you think that refresh was needed? A little bit more color on that would be helpful. Actually, this after dark segment is one of the largest segments. Last year, we reported a growth of 50% in volumes. We did about 3,000,000 cases.

20:42 And we have done a total internal study with the research and then we have come out with this beautiful after dark blue, which resonates with the consumer and the market is very big. And in fact, we have launched it in Uttar Pradesh where we are getting very positive signals. So I think we are very confident that after dark blue in the coming years will become a very good brand, very that should be should see good momentum in the brand. And is there a blend change also here, Ashish? Is there a blend change also? No. Got it. Got it. And the second question was really on the India, UK, FDA changes.

21:33 Just wanted to get your sense on, you know, pricing, your promotion, laddering, you know, any changes that you expect from a portfolio perspective given that, you know, Google competitors will make some pricing changes just by the matter of fact that they are mortared in origin. Just wanted your thought process on what tweaks you may need to make over the next few months? Is there something in the pipeline already, etcetera? Right now it's too early to comment, but with our estimate even if they pass on the retail price will go down by only 7% to 8%. Secondly, if you see our single vaults are already priced higher than the competition, like a Rampur double cast would be the average rate would be about to INR8500 crores. Verasat what we have done will be in the range of INR4000 crores. So as it is we are priced higher than them.

22:26 And today's consumer is looking at quality brands. So I think as of now our strategy remains the same. We will continue to focus on our single malts and continue to spend behind that. Thank you. The next question is from the line of Sanjay Manial from DAM Capital Advisors. Please go ahead. Hi, sir. A few questions, specifically, first on the UK FDA. What kind of a competition you think is spanning out in the luxury segment specifically?

23:14 Any early signs of this extensive competition? Any major brands where you think that now would be imported by the competitor? Right now, it is too soon to comment, but as I said in my earlier answer also is our luxury portfolio is very different and we are into the single malt category where the price elasticity is a lot and it all depends on the consumer preference and also if you've seen the Indian single malt is outpacing the global malt in India. So I think it's a long way to go and more than price it is the taste, where there our luxury portfolio differentiates from the competition. And also in the global market we are competing with all the global giants. So I think this is not such a it won't be such a mover or shaker at all.

24:08 Right, sir. Sir, just one more thing on the luxury part itself. What I understand, it must be closer to 3% of total India IMFL volumes. Is there any sense we can get what would be the value contribution from the luxury part industry wise? This is an industry wide question. So value, you mean sales wise? Yes, sir. They're very different. I give you what just a guesstimate, it should be double that is INR 300 basis. Okay. Okay. Right. And maybe if you can give some sense about the about any sort of changes we have seen in the Karnataka, actually on both Poplar and the P and A segment, what kind of impact we have seen on both Poplar and P and A?

25:07 See, Karnataka, it has been a very, very progressive side of government the way they are going on. They have rationalized the premium brand pricing one point five years back also. And at that time, there was a P and growth of around 28% and our P and A category has doubled the volume at that time. Now again, taking the learnings from there, they are again rationalizing pricing for the premium brands. And this time, the P and A category has grown for the quarter one, I'm talking, the P and L category has grown by 9%, whereas our portfolio of P and A has grown by 83%. So it is very positive side of it. The government is thinking on the right line.

25:53 And since we have a strong portfolio there of all the brands, so when you talk of Ramco Single Malt or Jasamir Indian Glass Gin or Sangam, Virasat, Royal Dandhambor and then Moffett Brandy, Magic Moments, After that, So that's a strong portfolio which we have. So we are pretty positive on that side. And considering the Cosmoculture in Karnataka, we think that it has a long way to go. Right, right. And lastly, the E and A part, just want to understand, given the fact that the kind of growth you have seen in the last few years, I believe your requirement for the E and A would have gone up substantially versus I believe your capacity is close to INR 30 crores, if I'm not wrong. Any plans to sort of increase the capacity for the capital requirement?

26:44 I think they outsource the E and A for the Mahat brand is empty available and with the capacity expansion done in last two, three years. Most of the states are becoming A and S as well. So I don't think that there is any compelling reason to go for CapEx and do another capacity expansion. But in future as we are completely becoming debt free, if it arises and the need arises that we can generate that kind of ROI, then we will think about it, but as of not now. And what is your requirement, total requirement now, E and A requirement captive? So our total requirement is in the range of around INR28 crores to INR30 crores between our INFL and non INFL both put together.

27:38 And between our Rampur, Sika Food plant and our joint venture, we made INR 33 crore litre. So some we sell because of the logistic reason is the from UP, but that quantity we buy in certain states and some Eastern states. Right, sir. Thank you and all the best, sir. Thank you. The next question is from the line of Agnish Roy from Nuwama Wealth. Please go ahead. Sure. Thanks. Congrats on great set of numbers again. My first question is on South India, specifically Tamil Nadu and Karnataka. Tamil Nadu, of course, the buzz is there that governments will government there will reform the sector.

28:26 And today, that news has come that trash bags shops will be privatized. I wanted to understand historically how big you have been in Tamil Nadu market. And given there are other examples of privatization in other states, do you see a big potential for your company and industry in Tamil Nadu based on whatever assumptions are available? I know we don't have the details, but fair to take the example from others. And in Karnataka, post tax reform, the number of slabs have become half and clearly there is much higher growth at mid and premium end of P and A. If you could comment on how things are all for you and for the industry because everyone is seeing very strong growth there in the last one or two months in the mid and top end of the P and A? That is my first question.

29:14 So to answer your first question about Tamil Nadu, Tamil Nadu is the largest market of the country. And all the signs are positive. Initially they have also started ordering on the tertiary phase and there are lot of industry meetings also going with the excise. So I wish and a place that it becomes an open market. And like Andhra, when it opened up, we didn't know that we'll become the largest test with 25%, 26% market share. Tamil Nadu is basically a brandy market and our Morpheus brandy is doing exceedingly well in the premium space. So it's a wait and watch, but it can be a very big market for the entire liquor industry.

30:04 And to your second question about Karnataka, I think Karnataka has done the most it's the most progressive policy what they have come out with. And the P and A growth in the first quarter has been 9% of the industry, whereas our P and A growth has been 83%. So I think and right now the MRPs are just getting settled, so the exact effect will start coming from July onwards. So I think Karnataka will be a very interesting industry for the P and A category, for the industry and especially Radico. Sure. My second question is slightly structural. When we hear the con call of any liquor company, we hear very similar thing that everyone is launching flavored vodka, flavored spirits, flavored this, flavored that.

30:56 So you have been one of the early movers here, and you have done exceedingly well. My question is, will this become a challenge going ahead at some stage that differentiation then will become a problem because in this kind of a me too strategy, which other companies are also doing, then what will happen in such a scenario? Everyone will have the same flavored guava flavored this, flavored that. So I wanted to understand that from an innovation perspective. Yes, 100 right. When I launched Magic Moments Vodka in 2006, that time the vodka saliency was 1% and there were hundreds of vodka launch, but Magic continued to become the market leader with 60% market share in two decades.

31:47 And what I see globally 28% of the global industry is vodka. In India, last five years, 20% growth. And now what we are seeing is a meteoric rise. So I think it's a multiyear story for vodka. And the more the brands come, the category gets wiped out. And eventually the consumer sticks to one or two brands. So I think the more competition which will come in this space would be very healthy for the industry and for the category to expand. So I think it's a very, very positive sign for the Vortka as a category. Sure. Last quick question. In Maharashtra, you are slightly differently placed versus some of the other listed companies because you do have some level of presence in the MML. So if you could update us on how the your MML has done through that joint venture?

32:46 And how has the industry shaped up in terms of MML? So after December when the lapping up of base happens, what will be your expectation on non MML, so essentially, I'm a feel growth for the industry and for you? Yes. So see, after this introduction of the MLL in last year, there has been a degrowth in the overall industry. Last year, we have seen a 35% degrowth. Right now, we are seeing a 20% degrowth in the quarter one. But for a change, I mean, if we talk about our P and A and the growth, which is coming in quarter one is around 10%.

33:34 So the industry has regrown in quarter one by 20%, and we had grown by 10% on P and A. So that's the positive side of it where the consumers are back to their favorite brands. Second part is that regarding MML, I think that is already settled at 100 to 700 cases only. We had a presence there, and we have around 7%, 8% of the market share there, and that is always continued. We think that the above will do much better in the times to come. Sure. Thank you. That's all for me. Thank you. Thank you. The next question is from the line of Shantanu Mantri from Think Investments. Please go ahead. Yes. Hi, team. Thanks for taking my question.

34:22 I had a couple of questions to start with. The industry leader typically spends 10% to 11% on A and P. And those guys have been guiding for 5%, 6% P and A growth, right? And while we look at RADICO, we typically spend 7%, 8%, and we are doing 30% plus and guiding for 25%. So wanted your insight on this, like is there a need for us to increase A and P and gain more market share? Or how does this dynamic work? So would want to hear your thoughts on this. Like Shantanu, if you would have seen is in the last we would be the only company to create organically all the brands.

35:15 And in the last 'ninety eight, we launched APM and we have maintained our ad spend in the range of 7% to 8% maximum. And I think that's a fair enough money to make the noise. It depends where you spend the money. So I think it is a good enough money to spend and create and grow the brands. So I think we spend a lot of money on direct marketing, on visibility, in shop, digital, so where the money really contributes for the brand and that is showing in the result in the last ten years we have always outpaced the industry in terms of P and A growth. Absolutely, that sounds pretty impressive.

36:02 My second question is on the regular portfolio now. Last year, obviously, on a corrected base, we grew 30%. We did close to 20,000,000 cases ex royalty. How do we see that segment growing now? Let's say, if I just want to stick to this year FY 'twenty seven, how do we see regular volumes growing? Chandragu, like what we have always maintained that our aim is to grow the P and A segment where we have upgraded our guidance from 20% to 25% for the current year. And regular brands we only sell on those states where we make money, we And continue to do depending on the industry there, we will get the similar kind of growth. But our focus is more on the P and A side.

36:51 Perfect. Sounds good. One last question, Abhishek ji, anything on Dharsh, like is there any development there if you could share would be helpful? R has been one of the largest markets when it was wet state in terms of white spirits and all our brands are very popular 8PM everything. So I will see we'll get a good news what the industry has been waiting for more than a decade now. So God knows. Right now, there is no exact such. Okay. Thank you. Thank you. The next question is from the line of Nitin from HDFC Securities. Please go ahead.

37:38 Yeah. Thanks for taking my question. I have three questions related to P and A volumes. So I just wanted to have some clarity on Q2 volumes. So like before FY 'twenty six, we generally saw Q o Q growth in Q2 versus Q1 of around 20% to 30%. So I guess this reflects basically a dip in volume in summer months in Q1. So do you see the trend resuming for this year, where the Q2 will see another quarter of healthy volume growth for us in P and A? We don't give quarter on quarter guidance like we give annual guidance, which we already have done where we have increased the yearly guidance from 20% to 25%. So I think what I can say is the brands are super buoyant, and we are seeing huge traction for the P and A category of Radico's portfolio.

38:30 Sure. And second question pertains to like we have grown 36% in P and A for first quarter. And for the full year, we are aiming for like 25 plus growth. If I consider 25%, then for the balance nine months, it will be 22% growth. So like just wanted to have some clarity around Q1, like the volume growth, what we have have seen in Magic Moments of around 43%. So is there any loading one off? Or do you consider Magic Moments volumes can sustain 1,000,000 ks monthly trend for the rest of the year? I'll say your first question first. Radico never believes in loading the trade. That's why if you see our outstanding etcetera is always because our credit control is very strong.

39:16 And Magic, it is absolutely the tertiary sales which are happening. As I said, it's a multiyear structural change shift, which we are seeing in the vodka category. And what I can say is that month on month we are seeing great traction in Magic Moments vodka. Sure. Thanks for the clarity. So that means like rest of the portfolio, if they sustain and Magic Moments sustain, then you can out deliver on your guidance for the full year. Thanks for that. And lastly, on this royalty volumes have seen a dip and with the Tamil Nadu sort of expected to see open up. So can you throw some light around like what exactly is happening with the royalty volumes?

40:04 The royalty volumes, which we had said that earlier we were not present on ourselves in Andhra. And when it opened up, we came and we said we convert everything into our own volume. That's why we become the largest there, 25% market share. And I think if Tamil Nadu opens, it will be anybody's guess. The moment, it's only Tamil Nadu where we are. Small number you see it's only Tamil Nadu. Okay. Okay. So I was of the view that we don't have royalty in model in the Andhra, but it was there. And now since we have shifted to our own, then royalty is coming down. Thank you. Thanks a lot and all the very best for the future. Thank you. Thank you. The next question is from the line of Karan Kamdar from Choice Institutional Equities.

40:53 Please go ahead. Hello, sir. Hope I'm audible. Congrats, sir, on, like, of cornering the market. I believe you made some great gains, and you already earlier said that you see the market has grown from 4% to 6%. Where do you see this market trending up in the next two to three years? And do you think we would be able to sustain our market share gains? Because I believe some other brands are also growing too fast at least in the near quarter. So that's my first question. Yes. As I said globally, what kind is 28. When I started Magic in 2006, it was less than one. I would have never given twenty years to become at six.

41:39 So I don't know what trend, but what we are seeing now in the last four, five years with 20% plus growth happening year on year and it's now become with the Gen Z coming, vodka is a more easy mixable drink. It promotes the cocktail culture, it promotes the nightlife going out, like if you see the number of restaurants which in India has started opening up. So I think it is all that culture and lifestyle which is supporting this sector to grow. So I think in the coming years, India is going to open up more, there'll be more number of e3s. So I think that culture has started. That's why in my things I said, I see it as a multiyear structural shift towards the white category happening.

42:32 Okay. Right, sir. And sir, on our defending our position, so how would we sort of defend our position against the more luxury vodka than the premium landed one? Or those are two completely different segments from Magic? Yes, they are completely different. Like a great good, they are very hard price compared to Magic. Okay. And any plans to launch mid premium in the near future, given that mid premium is a very lucrative category with high margins, something above Magic? Right now, we are concentrating more on the innovation on the flavors like the flavors of India what we have launched. So we want to get the ethnic flavors of India into this category.

43:21 And I think it's doing extremely well with the 43% growth. Got it. Thank you, sir, and all the best. Thank you. Thank you. The next question is from the line of Akshay Krishna. Please go ahead. Hi, team. So my question is on this premiumization. So this has been actually a consistent growth driver. Now beyond this p and a volume, what are the next levers that will improve the profitability? Is it going to be a premium extension with p and a or pricing or an innovation or is it going to be the change of consumption? I think the P and A is one part. The second is our luxury and semi luxury portfolio. I think those are also really gaining a lot of traction and the higher you go, higher your margins are and more profitable it is. So I think we are in the right direction.

44:21 We are concentrating a lot on the on trade channel. We are concentrating a lot on the advocacy to explain the differentiation between our vaults and the global vaults. So I think if I see India ten, fifteen years down the line, then luxury will be an important part of the portfolio, very important part. Got And just a follow-up question to the previous participant on the acquisition part. Will you what would you consider as an inorganic opportunity at which point in time? And what are the gaps in portfolio would you like to adjust through acquisition rather than internal development? As I told earlier, we have never acquired any brands, etcetera. And I think we have the capability of creating our own brands, and we have always believed in build versus buy.

45:20 So I think our pipeline is quite robust, and we don't see any opportunity on acquiring a brand. Okay. Okay. And last question is on the exports. Now the Indian whiskey is actually gaining global traction. Now how do you see exports evolving over the next three to five years time period? And is the objective is to build a brand or is it meaningful profit contribution at your end? See, in terms of our export, our brands are currently available in over 100 countries and we've always believed in building brands than just pure selling, Both in terms of our value for money or prestige and above category or the luxury category as well, we are not only catering to the Indian diaspora, but also to the mainstream consumers.

46:18 The fact is the global travel retail as well. We're currently in about 63 travel retail outlets and where we're catering a luxury portfolio to travelers across the globe, all the mainstream consumers as well. And that will continue to remain our focus. And as you may have read, heard or whatever, Rampur, Jaisalmer are one of the most loved brands globally coming from India. So that will continue to be our focus area. I completely agree with that, sir. Just a final question on the same. I just wanted to follow-up on this. So what will be the volumes through value contribution of exposed on our overall base?

47:05 Well, the volume is about 6%, 5% to 6% on that, and value is obviously higher. Okay. Okay. Okay. Thank you. Thanks. Good luck. Thank you. The next question is from the line of from I and I Capital Ventures. Please go ahead. So I have mainly two questions. I wanted to ask how is your on trade expansion going on? Like, we had plans of thousand events for the FY 2027. Are they going on track? And secondly, like we had plans to expand from 50 airports to 100 airports. And is that also going on track?

47:53 Let me address the airports thing first. As I said, we were in 50 and as I said in the last question, we are now at 63. So that's very much on track and we remain very confident of achieving that number of 100 in the coming years on that. In addition to that, we're also now with airlines as well, we are the only Indian single malt available on Air India. Our Jaisalmer Gin is now available on SpiceJet as well. So these are landmarks or milestones that we are achieving. And on the on trade, I think as I said earlier, on trade has been a major interest area for the last two to three years, but that is where the luxury drive.

48:49 So starting from manpower to the advocacy sessions, events, I think we are doing more than the numbers we are talking about. So I think we've gone quite aggressive on the all trade. And secondly, I would like to ask, like, being a generic myself, I don't see any influencers on our Instagram channel promoting our products. Like, I see many influencers from the other brands, like they educate about our products, like, what kind of cocktails we can make from that product. It will... Like, we see the vibe and go and try it, but I don't see anything about, like, like, that anything in our Instagram page. Are we having any plan to hire any influencers and do the same thing?

49:37 Yes, yes. There's very much influencers are big draw these days and we already have plans on that. You will very soon see that coming on all our digital channels. Okay. And lastly, I wanted to ask like, are we planning any flavored brandy to occupy the South Indian markets? And also, we planning any ready to drink as we are seeing the home consumption expansion in metropolitan cities? Not at the moment. Not though we have in the international market flavored branding, but not for the Indian domestic market. And RGD, we're not looking at that at the moment.

50:26 Okay. Thank you. Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks. Over to you. So to conclude, our performance this quarter reflects the continued success of our premiumization strategy, disciplined financial management and consistent execution, Strong profitability and expanding margin and improved return ratios and healthy cash flow generation reinforces the quality of our business and gives us confidence in sustaining the profitable growth. Backed by a strong balance sheet and a growing premiumization portfolio, we remain well positioned to capitalize on future opportunities and create long term value for our stakeholders.

51:20 Thank you for joining us on this call today and for your continued support. We look forward to speaking with you again next quarter. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.