Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Radico Khaitan Limited (NSE: RADICO) Q4 2026 Earnings Call dated May. 07, 2026
Corporate Participants:
Abhishek Khaitan — Managing Director
Dilip Banthiya — Chief Financial Officer
Analysts:
Sanjay Manyal — Analyst
Aditya Soman — Analyst
Karan Kamdar — Analyst
Unidentified Participant
Unidentified Participant
Abhijeet Kundu — Analyst
Unidentified Participant
Unidentified Participant
Nitin Awasthi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Radico Gate Unlimited Q4FY26 earnings conference conference call hosted by TAM Capital Advisor. 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. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr.
Abhishek Mehra. Thank you. And over to you sir.
Sanjay Manyal — Analyst
Thank you. Good evening everyone. We would like to thank Radhiko Khetan’s management for providing DAM Capital with the opportunity to host Q4FY26 earnings call. Today we have with us Mr. Abhishek Khetan, Managing Director, Mr. Dilip Banthia, CFO, Mr. Sanjeev Vanga, President International Business and Mr. Sudhir Upadhya, Chief Sales Officer. Now I would like to hand over the call to Mr. Abhishek Khaytan for his opening remarks. Thank you. And over to you sir.
Abhishek Khaitan — Managing Director
Good afternoon ladies and gentlemen and thank you for joining us on Radico Catan Q4FY26 earnings conference call. FY26 has been an important year for Radico Khetan and in many ways an inflection point in our journey. The business delivered a strong performance supported by disciplined execution, a richer portfolio mix and a continued focus on value led growth. During the year we crossed two key milestones with net revenue exceeding 6000 crores and EBITDA crossing 1000 crores. These achievements reflect the sustainability of our business model, the strength of our brands, the investments we have made over the years and the growing scale of our premium and luxury portfolio.
Our prestige and above segment continued to lead growth while our luxury portfolio delivered sales value of 475 crores. In line with our guidance, we expect to sustain this growth momentum and deliver 25% growth in FY27 in this portfolio. Our recently launched luxury brand Grampur 1943 Virasas Indian single Malt and the spirit of Cashmere luxury Vodka are gaining strong traction with consumers and the trade. In February this year, globally renowned whiskey expert and author of the Whiskey Bible, Jim Moray was in India for an exclusive tasting event of Viratra.
He also visited Rampur for the opening of our latest stilt house. His earlier visit to Rampur was nearly three decades ago when our first mall plant was just a couple of years old. Our current single mall portfolio not only showcases the craftsmanship behind various expressions, but also reflects the growing international interest in Indian single malls. Alongside this, our broader premium portfolio continues to scale steadily across key markets, supported by sharper execution and increasing consumer pull.
Royal Bathambor Whiskey delivered an outstanding performance growing over 50% during the year. Driven by strong demand across both civil and CSD channels. Magic Moment Vodka continued its strong trajectory with 21% volume growth during the year to reach 8.6 million cases and around 1500 crores in sales value, further strengthening its leadership in the vodka category. During Q4, Magic Moment registered 28% year on year growth. New flavor innovations including Flavors of India categories are contributing to this robust momentum.
Going forward, we’ll continue to add more flavors as we lead disruptive growth in the category after dark Whiskey continued to deliver strong performance, recording over 60% growth and crossing 3.1 million cases during the year. We also continue to deepen consumer engagement through focused marketing on trade activations and brand advocacy initiatives. The Royal Anthem Board Limited Edition Pack celebrating India’s six legendary tigers brought together premium storytelling with a strong message around wildlife conservation.
Our experiential campaign and focused digital engagement further held us connect with younger consumers in a more authentic manner. As we have discussed earlier, the On Trade channel continues to be a strategic priority for us. Over the last two years we have made significant progress in building a stronger foundation and the results have been in line with our expectations. In FY27 we will further scale our On Trade agenda across advocacy, distribution, expansion, key account, partnership and airports.
These initiatives will enhance visibility, trials, consumer experience and premium brand activations, strengthening the reach and salience of our luxury and premium portfolios. From a financial performance perspective, the year has been encouraging a better portfolio mix. Relatively benign input costs and the benefit of scale have helped us to improve margins and returns. We will however continue to monitor the global environment closely, especially developments in West Asia given the possible implications for supply chains and input costs.
Looking ahead, the consumer environment remains supportive and we remain confident about Radico Caetan’s long term growth opportunity. Our focus will remain on building our premium and luxury portfolio investing behind the innovation and brand equity. During FY27 we expect to grow our prestige and above portfolio volume by 20% and expect our EBITDA margin to expand by 125 basis points for the full year. With that, I would now like to hand over the call to our CFO Dilip Bancia for a detailed review of our financial and operational performance.
Thank you. Over to you, Dilip.
Dilip Banthiya — Chief Financial Officer
Thank you Abhishek. Thank you everyone for joining us on this call today. Financial year 26 was milestone year for Radico Khitan with robust operating performance translating into higher profitability, improved return ratio and enhanced cash flow free cash flow generation. The result demonstrate the power of our premiumization strategy, growing scale advantage, input cost stability and disciplined financial management. During quarter four of financial year 26 we delivered a strong all round performance with total IMFL volume of 9.52 million cases reflecting a 4% increase.
Increased year on year basis prestige and above category continued strong upward trajectory recording 28% volume growth. The performance was supported by strong brand momentum and premiumization led product mix. Regular volume degrowth was due to a higher base in quarter four of FY25 after the change in the route to the market in the state of Andhra Pradesh and the impact of policy changes in Maharashtra and Karnataka on the profitability front, Gross margin during the quarter was 48% representing an expansion of 450 basis points on year on year basis and 150 basis points sequentially.
The improvement was led by better product mix, softer raw material prices and ongoing premiumization. We continue to monitor evolving situation investation confident of our margin expansion trajectory over the mid to long term. EBITDA margin during the quarter stood at 19% expanding 565 basis points year on year. Highest ever EBITDA margin reflecting the strength of our PMO margin studies, operating leverage and continued cost discipline. This margin performance is an important outcome of investment we have made over the years in building our premium and luxury portfolio.
The improvement in profitability has also translated into stronger return ratios. Higher operating profit and better asset utilization have contributed to improved return on equity and return on capital employed. As the prestige and above luxury portfolio continue to scale, we expect further improvement in the overall capital efficiency of the business. Turning to the balance sheet, net Debt reduced by 329 crores during the year driven by improved profitability and cash flow generation. Our balance sheet remains strong and we are well on track to become debt free in financial year 27.
Capital allocation continues to be prudent and selective with ongoing capex largely directed toward maintenance efficiency improvement and essential capacity optimization. In line with our commitment to the shareholder value, the Board has articulated a strong dividend policy with a minimum payout of 20% of profit after tax. This reflects our confidence in the cash flow generation of the business and maintaining adequate flexibility to invest behind future growth opportunities. Looking ahead while we remain Mindful of our external volatility, the cost environment, operating leverage, benefit and financial discipline to provide comfort on margin sustainability and cash flow generation, our focus will remain on driving profitable growth, strengthening the balance sheet, improving return ratio and enhancing shareholder value.
With that, we now open the line for question answers.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask question may press Star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Aditya Soman from clsa. Please go ahead.
Aditya Soman
Hi, good evening and thanks for the opportunity. So two questions. Firstly, can you throw some light on sort of new product launch plans for fiscal 27 particularly in the prestige and above and luxury space. And second sort of your 125 basis point EBITDA margin expansion is fairly robust given the commodity environment. So one, how do you plan to mitigate the higher commodity cost and is this margin expansion over full year 26 or 4? Q26. That’s it.
Abhishek Khaitan
To answer your first question about the new launches, if you see in the last year itself we’ve launched three, four brands in the luxury as well as the P and A category. So we want to consolidate that. That will be our first objective and take it nationally like our Viratit Indian Single Mall Spirit of Kashmir. Right now it is in 10 states. We want to take it to 20 states so that will be our prime focus. Thus we’ve launched new flavors of magic like Jamun, Mango, Pandai which we are going to again take it nationally.
And in the coming year what we feel we are going to launch is some more flavors in the Magic family and those will be also in the flavors of India category. Plus at the end of the year we will be coming out with the tequila in diabolic spirits. So these are our launch plans and as
Dilip Banthiya
Far as the margin goes. So on the margin front, Aditya actually as you noticed that in last quarter we have improved our gross margin by 450 basis points and EBITDA margin by 565 basis point. And we are quite confident to add 120 basis point to 125 basis point margin in the coming year 27. So this is an annualized, on annualized basis we have got the price increases in some of the states which amount to be around 60 basis points. The same time product premiumization will yield us more than 200 basis points.
So we will be more than mitigating the impact of the cost push and thereafter also we are confident to deliver 120 to 125 basis point margin expansion.
Aditya Soman
That is very clear. Thanks very much. And just one follow up on the margins. So will there also be some unlock given that you had a large number of new launches last year and so I’m assuming there was a huge marketing spend behind that. So could there be some unlock in marketing spend as well given that the number of new launches is lower?
Dilip Banthiya
We have been actually consistent in our policy on spend in the marketing and as we have always been guided that with 6% to 8% is the bracket where we spend the marketing expenses depending on the new launch in our existing flagship brand. So we’ll balance out in that. So and as we are top line has grown by 25% this year also. So the increase in top line will further increase the quantum of the marketing expense.
Aditya Soman
Perfect. That’s very clear. Thanks so much.
Operator
Thank you. The next question is from the line of Vishal Gutka from Esk Investment Managers. Please go ahead.
Dilip Banthiya
Yeah, I mean congrats on excluding three questions from one to my side. First is on Karnataka State. Now within your new policy announced by the state, the pricing differences between the regular and clean has come down. So how do you plan to capture that given that the gap has come down a bit, driving the premium and upgradation agenda that we have? Second questions around West Bengal now there is a change in government that has happened. You think there could be a meaningful change in the way the market operates and if we can create a, if we can provide a framework as of now how the market is operating as on this.
The third question is on VR State hearing murmurs that prohibition could be uplifted. If we can provide an update that you are aware about. Thank you.
Karan Kamdar
Hi, this is Sudhir Baja. So first of all regarding Karnataka which you had asked. Yes, we have seen last time when Karnataka has rationalized the pricing for the premium brand. There was a significant increase which has come on the premium brands. And since we have the portfolio of the premium brands which is like Kampur, Jaisalmer, Royal, Lintamore, etc. It is very well established there. We had also gained the advantage on account of this price rationalization which has been done almost a year and a half back now.
This time also we are anticipating the government is working on the similar line, although the official announcement is not there. In that case, if it is going to be there, we will certainly be benefited with that. Your second point is regarding the West Bengal. West Bengal, you know, it’s too early to preempt anything because there is a change which is recently done. So we will wait and watch on what is happening on the West Bengal and on basis of that we will put the strategy there. We had a strong vodka base there so we will get the benefit of that.
Unidentified Participant
So it’s an open market or the regulatory state as of now West Bengal?
Karan Kamdar
No, it’s an open market right now. So they have a private retail etc there. But if there are any changes which is going to happen then we will see accordingly. And yes, we will wait and watch. Before the prohibition we used to have a large consumer base in Bihar and it is a significantly populated estate. So we will wait and watch. In the case if anything happens in Bihar, we will get the benefit of it.
Aditya Soman
Wishing you all the best for future quarters. Thank you.
Operator
Thank you. The next question is from the line of Hartit Kapoor from Investec. Please go ahead.
Dilip Banthiya
Yeah. Hi, good evening. So I just had three questions. One was, you know, on the initial comments, Abhishekji, on, on the unlock, you know, because of the distribution expansion on the luxury portfolio. My understanding was that a lot of this work you’re already done. Just wanted to get your sense on, you know, how much more can this benefit whether in terms of, you know, more outlets that you can still reach on the on trade or maybe more product in those same outlets. So what’s the potential still of that?
The second question was on exports, I’m sure you know, you would have taken some impact in the last six months because of tariffs, etc. I just wanted to kind of get your thought on how fast that segment can grow, you know, going forward and how much impact it would have had in 26. And the third question is on the, on the margin bit, you know, the 100 to 125 basis points, does it also take into account the fact that. Are you already including the fact that there will be an India UK FDA benefit for you possibly in the second half of this fiscal year?
Those are my three questions. Thank you.
Abhishek Khaitan
To answer your first question regarding the expansion to the various states and on trade, I think we see that especially with Virasat Cashmere, all this has a huge scope of expanding it. And on trade also, what we had told about two years back with our luxury portfolio has become a key focus area for Radico. So we are adding outlets by the day and this year brand advocacy is one of our most important initiatives. We Are planning to have about close to 1,000 advocacy sessions in the on trade. So I think all these put together, that is why we are confident that our luxury portfolio should grow by 25% in terms of value from 475 crores.
And as far as sport goes, I think Sanjeev will answer that.
Unidentified Participant
Yeah. Arif? In terms of the US tariffs at 10% it’s not make or break especially for the luxury portfolio where the difference on the retail end would be about 5 to 6% a bottle and all. So that’s not substantial. However, the US market as it is, as you would have seen from all the other players as well, whether in the Alcobev space or anything else, is on a slightly softer note. But we are all hopeful it will bounce back pretty soon and should not have any major impact on our luxury portfolio.
Dilip Banthiya
Regarding the margin expansion, as you said that UK by India FTA benefit so 125 basis point expansion is inclusive of all at the same time there can be some pluses and some minuses. So we are conservative on our listing that some something goes on cost push side and all that. So 125 basis points should be delivered given the current scenario.
Unidentified Participant
Great, that’s it for me. I’ll come back for more. Thank you very much.
Operator
Thank you. The next question is from the line of Abhijit Kundu from Antishockbroking. Please go ahead.
Abhijeet Kundu
Yeah, thanks for the opportunity and congratulations on a great set of numbers. Just a follow up on the, you know the previous question that to just clarify if I mean excluding UK FTA and given the current environment radical is looking at 100225 basis points improvement in margins. Is that, is that right?
Dilip Banthiya
Actually as we said with the current scenario I can’t predict if it goes much earlier than what it is today with the LPG and other things goes out of stock and some of the units of glass bottle disrupt with the production and all that. Otherwise we are pretty confident because we see this should not happen and the geopolitical situation also should be taken care of next 15, 30 days and all that. And we have a long standing relationship with our supply chain so we’re pretty confident about continuity of the business and given these circumstances and all we confident to deliver that until there is something very very drastically negative.
Abhijeet Kundu
Okay. And so what I understand is Sitapur and Rampur Distillery, 50% of it is you know, bio biomass dependent and less dependent on lpg. So on an overall basis, I mean assuming, I mean things are getting better but Assuming that there are issues with LPG and LPG supplies and then there are also. That is one question. Second. So what happens in that scenario? And second question is that you know glass prices, are you seeing any inflation right now? I mean after your negotiations what is the. And what is your dependence on glass?
Because the major part of it would be glass. And then there is, you know a lot of this company, a lot of alcoholic spirit companies have switched to hipsters and hence a dependence on pet. I mean bottles. So what could be the overall impact in the current scenario and if it increases from the current level? Just. Just a slightly of you on that.
Dilip Banthiya
Actually your first point regarding the my power and fuel balancing and all that. So it is largely 90% of our power and fuel between in both the plants Sitapur and Rampur is biofuel driven. So I am not at all depending dependent on the lpg. So it takes care of itself and the biofuel is locally available and there are boilers, etc. And turbines which generate the power. So in both the plants we are self sufficient on our captive basis. Your second question regarding the glass, as I said earlier also that we have a long standing relationship with the glass manufacturer.
We don’t foresee any impact on our glass supply. At the same time there has been some inflation in the glass prices. In the last month around 15% of the glass price have got increased. We have factored factored into our cost, this thing costing that and after that also we’re talking about the margin expansion. On your third point as the trend is going around and Abhishek can speak much more on that on the extra socket pack. It is a trendier pack and is gaining momentum. So that is also reducing dependency on glass.
So that is another feature which is coming in the demand point of view and consumer preference point of view. And we are promoting that also.
Abhijeet Kundu
Understood sir. And on a top line front when I look at your growth and the sustainability of that, if we have to look at a 15 to 16% at least revenue growth for the next few years and you know about 11 to 12% volume growth then a significant part of that would come from Magic Moments. Vodka after dark 8pm black. I don’t know how that is moving on. And there is a part of it which old admiral, where you were, where you got benefited in Andhra. So if you have to look for this next two years, how would the scenario be in terms of your brand growth?
I don’t want any figures but which would be the brand that would drive the larger group one is your 475 crore of luxury portfolio which will grow at about 2025%. That we understand very well and that is doing very well. And. And what about the other portfolio? And then yeah, in addition to that, sorry, how have you seen the mml, you know, panning out? So has it settled down? Because that has impacted a part of Radical’s volumes as well. So how do you see that panning out going ahead? Yeah, that’s fine.
Abhishek Khaitan
If you see last year our growth of PNA has been 28% and vodka, definitely what we are seeing is a shift towards the white spirits. Like if you see total market share of the white spirit in India is about 4.5% whereas globally it is 28 to 29%. So we have still a long way to get that conversion. And I think what we are seeing with the innovations of the flavor, et cetera, a lot of consumers are now shifting to the white spirit. So I think in the time to come or in the current year, which we are already seeing, magic will be a big driver of our growth.
Number one. Number two, After Dark also has grown very well. It has grown by 62% and we feel that it is gaining traction. So growth will come from there also. And we had done a repackaging or a retransformation of 8pm Black in the second half of last year and this quarter we grew by about close to 60%. So I think growth is coming from all these three angles. So we are very confident that our PNA category volume growth for the next year will be very pertinent.
Abhijeet Kundu
Understood. Thanks. Thanks. That’s it for myself. Thank you.
Operator
Thank you. The next question is from the line of me who? Desai from GM Financial. Please go ahead.
Unidentified Participant
Yeah. Hi sir. Congrats on great set of numbers. Firstly, just wanted to while you did allude to vodka segment and PNA segment being seeing a strong growth, how should one look at the realization growths here? Because obviously the luxury portfolio is also growing pretty fast. Do you see this realization growth of you know, low single digits that we saw in FY26 for P and A, can that be, can that go to, can that also increase? And secondly, how do you look at the regular segment growth on a steady state basis?
Dilip Banthiya
So on the realization front as our P and A and especially luxury is growing faster than the even P and A, so we expect that realization at volume and value delta will be in the range of 300 to 400 basis points as an aggregate basis. And as far as your second question on the regular segment. Regular segment in my opening remark I said is because of some policy and high base this time it has begun in Q4. However in the full year we grown by 30% on the regular side also. But this year we expect in the range of 3 to 5% growth in regular category.
Unidentified Participant
That’s a volume growth.
Dilip Banthiya
Yeah, volume. Yes.
Unidentified Participant
Got. Thank you. That. That’s all from my
Dilip Banthiya
End.
Operator
Thank you. The next question is from the line of Rahul Agarwal from Incanite Asset. Please go ahead.
Dilip Banthiya
Yeah. Hi sir, good evening. This is Rahul Agarwal from Ecguy Asset. Sir, the question is related to you know earlier questions asked on growth. 20% TNA volume growth implies about 3 and a half million cases roughly. Additional similar question what the earlier analyst asked on which categories and brands will contribute. You mentioned Magic moments after dark 8pm black repackaging. Are these three category or brand going to be similar to contribute this three and a half million cases? Is there enough market for that?
That’s first question. Secondly in terms of capacity related question to the growth outlook, support this 20% growth. You know you said your capex is largely maintenance and optimization. So how are we placed in terms of in house capacity across you know material packaging, bottling, printing, stuff like that. You just highlight. Do
Aditya Soman
We have enough to support this, you know give more color on this 20% growth. That’s the first question.
Dilip Banthiya
Yeah. So the first question is regarding the 20% category at 20% growth on the P and A side. Yes, you are right that these are the brands which will take it like Magic Family is going more than 22% in as a whole and last quarter 28% new flavors are adding a lot of strength to the magic growth. Then after dark which is a large segment in large segment it is an industry of 75 million cases plus. So that is also adding Royal Ranthambore the another brand which is also growing by more than 50% and as a bouquet as some of the brands are still in a very very nascent stage and all that.
We are confident to deliver 20% growth on our as a category, full category as a P and a category. Second question is regarding the capacity. So actually around 60, 65% of our capacity is outsourced by lease arrangements et cetera across India and 30 to 35% is being handled by us in our own plants. So we believe in outsourcing that with the quality arrangements etc. So we are confident and the capex as I said will be in the range of 150 to 175 crores which will be largely on my internal capacity expansion and optimization etc.
So we will be doing that mix of that. But the capacity is not a constraint for the growth.
Aditya Soman
Got it sir. And this entire 60,
Dilip Banthiya
65% outsourced arrangements, you know from a supply chain perspective, you know they could face, you know some hiccups in terms of whatever they are sourcing components and material from. Of course cash is an issue and you know it could have some supply hiccups. You know in terms of our discussions with them that this, this outlook in terms of 20% growth also accounts for, you know, all the supplies on time to the vendors as well. Right.
Abhishek Khaitan
As far as the tie up unit goes, all the material is procured by radical. We are only converting it. So all the raw material is our, our this thing. So we don’t foresee any problem in that.
Dilip Banthiya
Got it Laviji. And just lastly on employee cost, just as a direction, when I look at over the last four, five years, this number actually has grown much lower than what top line growth Radico has seen overall from a system level. Of course we have been investing into people and we’ve been training people inside the company itself. But going forward, do you still think this 15% cost CAGRADE for staff cost is enough to sustain this 20, 25% kind of P&A outlook over the next two years?
Abhishek Khaitan
Our internal team is very strong. And second is the operating leverage is coming into play as you as. Because as the turnover is increasing you do not require the same number of manpower. So the operating leverage is kicking in which is helping our margins also.
Dilip Banthiya
So it should continue the similar way as what we have seen so far over the last four or five years. Right?
Abhijeet Kundu
Yes.
Dilip Banthiya
Okay, perfect. Thank you so much and best wishes for the next year.
Operator
Thank you. The next question is from the line of Naveen Naridi from Naridi Investment Private Limited. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Operator
Yes ma’. Am.
Unidentified Participant
Congratulations and thanks for the opportunity. So my first question is giving rising health awareness. How are you adopting your portfolio? Like premium ready to drink low alcohol to capture Gen Z consumers and also diversifying the portfolio which will reduce the dependence on Indian excise policy. That is my first question.
Abhishek Khaitan
As far as the Gen Z goes, you know, the white spirit is what the Gen Z and that is where our innovation of the different flavors of vodka is coming into play. And that is helping us to get the Gen Z into the white spritz. What I told earlier, we see this white spritz expanding in Lot of states now. So I think that is the trend we are seeing with the Gen Z. As far as low alcoholic or RTD goes as of now we don’t have any major plans to get into it.
Unidentified Participant
Yeah, because these days what I observe personally is Gen Z focuses on they are very careful about what they’re drinking and they’re limiting their like they don’t drink too much also they think and then they act. So that was my concern. Like how are we thinking to modify our portfolio into non alcoholic or low alcoholic beverages so that we can benefit in future? That was my concern and you are
Abhishek Khaitan
Absolutely right. The Gen Z, what they are doing is everyone is like health conscious, responsible drinking etc. So they are drinking, they drink less but they want to drink the finest. That is why the PNA category is growing across India and that is, that is the main trend.
Unidentified Participant
Okay, so like no future plans of getting into another like low alcoholic drink. Like many of your competitors are also entering into those segments. So you don’t have any plan to enter those segments right in future? Hello,
Abhishek Khaitan
We don’t have any plans as of now.
Unidentified Participant
Okay. And another question is like Rampur Indian single malt and Jesse drafted and magic moments like these are getting a lot of traction in global market like internationally also. So like knowing that our share like international contribution to top line is around 8 to 9% only. So going forward are we looking to penetrate even in a better way the global market scenario? How are we strategizing that forward?
Unidentified Participant
Yeah, the international market is a very important strategic market for us and it’s not only the international market for even the global travel retail that’s very important. We are currently in 50 plus airports and our target is to cross 100 airports in quick time. In terms of the share of international business in the overall, it’s thanks to our domestic business which is growing at a very very fast pace. The share keeps coming down. So we’re not complaining about it.
Unidentified Participant
All right, all right. That was my question and thank you. And I really like this. Like this is the first time I’m attending the investor call and you’re really doing a great job and all the best for the future. Thank you.
Operator
Thank you. The next question is from the line of Yash Patil from Dalal and Brocha. Please go ahead.
Unidentified Participant
Yeah. Hi sir. Thank you for the opportunity. So you in Q3 you flag the Maharashtra industry volume down by around 20% MML policy and said you will launch MML through your RNV joint ventures in general. So how has the RNV joint venture performed since launch. And what is your current market share in Maharashtra? And do you see the market recovering toward the original 2.4 million cases per month in Maharashtra?
Karan Kamdar
See, as far as Maharashtra is considered Maharashtra, we have saliency of around 3 to 4% of our overall business. Yes. After the MML introduction the IMFL industry has gone down. You know, it has gone down by 20, 25%. So gradually MML is stabilizing. And we hope so that IMFL in the over a period of time should come back to the in the normal position. And since we are getting vodka category and above there. So premium and above is a stable for us.
Unidentified Participant
Yeah. Yes. Thank you. And all the best for you.
Operator
Thank you. The next question is from the line of Vinay Rawal from Choice International Equities. Please go ahead.
Aditya Soman
Yeah. Thanks for the opportunity. Sir, I had a couple of questions but they are more or less answered. So thank you so much.
Operator
Thank you. The next question is from the line of Dheeraj Mistri from Jeffries. Please go ahead.
Dilip Banthiya
Yeah. Hi. Good afternoon. Sir, can you spend some time on Karnataka policy? How do we read that? And what kind of price decline or hike we can expect across range of products?
Karan Kamdar
See as we have said earlier that Karnataka is a progressive sonata, is on the progressive march. So as far as excise is considered, they have taken this step last year also where they have rationalized the price of premium brands. And our brands like Rampur, single malt, Jaisalmer, Kraft gin, Royal Danthamur, Sangam etc. Has been benefited in the larger way. And other brands of the industry have also been benefited. It’s a Cosmo market at the end of the day. So it has lot of consumption. Now in the second step also government also thinking on the similar line.
But at the same time since the policy is yet not out. So we cannot say that. But as far as market and other things are considered we can say that they are thinking on that line. And they have seen a success of premium and above category increase. The overall saliency of the premium in above category has been increased in the last decision of that. So definitely they will look forward for rationalizing the brands further.
Dilip Banthiya
Got it. Got it. And sir, what would be the margin for non IMFL business in this for the full financial year? And how do
Abhijeet Kundu
We see the growth as well as margin profile of non MFL business going ahead?
Dilip Banthiya
The margin in the IMFL business is around 20% plus 20, 21% for full year. And non ifl it is in the range of 9%.
Unidentified Participant
And how do we expect growth in non IMFL business?
Dilip Banthiya
Non IMFL business is growing at 7 to 8%. This thing, this is a natural growth of the industry as far as the bulk spread is concerned that will in due course of time start being consumed by us captively. So that will get reduced. So proportion as of now also the IMFL is constituting around 7370 of the overall overall saliency of the top line. So we’ll see a gradual shift to IMFL from non I.
Unidentified Participant
Okay, okay. And last question is on CAPEX
Dilip Banthiya
That now that we will become debt free in FY27 and already you have announced that minimum 20% would be the dividend payout policy. How do we see the incremental capital allocation going ahead? Would we do further capex or would be looking for inorganic growth or acquisition? How do we see on capital allocation as far as the first step we have taken on this is to have a minimum payout of 20% and in due course of time, with the time passes and the availability of cash generation and free cash flow available, it will be looked into.
However if there is an opportunity which gives us more than 25, 20 to 25% ROCE, we’ll be definitely looking at that. But the point is we believe in an organic growth rather than an inorganic growth. So as far as the acquisition or anything is concerned, that is what at this point of time is being ruled out.
Abhijeet Kundu
Okay, okay.
Unidentified Participant
And sorry but I, I don’t know whether this question was asked or not. So in our assumption of 125bps of margin expansion, do we take any benefit from UK India FTA trade?
Dilip Banthiya
Yeah, it’s inclusive. All because there will be some pluses and some minuses. We can’t predict what kind of the global and geopolitical situation arise. So taking into account all these things I think we’re confident to deliver on 125 basis point improvement.
Aditya Soman
Okay, so that includes UK India FDA trade benefit as well. Thank you sir.
Dilip Banthiya
Yeah, yeah,
Operator
Thank you. The next question is from the line of Karan Kamda firm Choice International Equities. Please go ahead.
Dilip Banthiya
Hello sir. Thank you for the opportunity and congratulations on a really great set of numbers. So first question I had is what kind of pricing power do we have across markets? At least our top markets. And if you can help me with what our top markets are in terms of salience and when can we actually do the revisions, Are there any legal restrictions or not on pricing divisions? Secondly we say I really appreciate the goal of reaching the thousand crore mark and we are seeing 25% to reach it in three years.
What kind of brands are our high conviction brands and what kind of geographies are we betting on? So your first question is regarding the pricing power. So as you are aware that state excise policies generally when the industry represent about the reason for seeking the price increases and all that in the scenario the state government considered now as positively because they are concerned is also the revenue and all that. As we said that seven to eight state has already given. This is a continuous process which the industry associations keep doing with the state government and some of the talks are still on and all that because of the cost was being faced by the industry.
So that is, I can’t say that which are the states, but yes, it is an ongoing process. Regarding your second question regarding
Abhijeet Kundu
Sir, Part 2, Luxury Market, what are we sort of betting on? What are our top brands that we are focusing on
Dilip Banthiya
For turning 475 into thousand crores. And I’m sure we will show luxury as a separate line item as well when we reach there. So what are we betting on in terms of brands and geographies?
Abhishek Khaitan
Our guidance first of all is for the next year 25% not for three years. So next year our guidance is 25% after that we see but we are very confident on our luxury portfolio because we are seeing growth coming from everywhere.
Dilip Banthiya
Okay, so nothing, no particular product or category that we are betting on.
Abhishek Khaitan
You know like Rampur Indian single malt, the expressions of Rampur, the Viratchat Indian single Malt, the Spirit of Kashmir, J Royal Ventamol, all these brands.
Dilip Banthiya
Okay, got it sir. And sir, if you can just list out what are top
Karan Kamdar
Three states and what salience we have in those states that would be very helpful.
Dilip Banthiya
So the top three states are Uttar Pradesh, Andhra Pradesh and Rajasthan. And we are actually pretty well spread out on our saliency. North, south, everywhere. I think Rediko is growing but these are the three big states.
Unidentified Participant
Okay, thank you sir. And all the rest for the future.
Operator
Thank you. The next question is from the line of Nitin from Ingrid Research. Please go ahead.
Nitin Awasthi
Hello sir. One I would like to know given that MML is right now established in Maharashtra and stabilizing and you have a JV there which is allowing you to participate within that industry and you’ve already lined up some pretty eye catching products and given that the competitors within said segment would not always be backed by large companies such as yourself, given that, do you expect the JV in Maharashtra to take a substantial portion of this increasing Market.
Abhishek Khaitan
We are aiming about 10 to 15% of the MML category and we just launched it a couple of months back and the response to the brand is quite encouraging.
Nitin Awasthi
Yes, that is definitely there. I’ve seen the products within the range and of course there is no debate that your products stand out across the line, you know, in that category. And given that this distribution strength you could and backing of the main company, the growth of course there is going to be substantially high if the entity stabilizes. Now here, given that the growth is going to be coming from this segment and that’s the market you are aiming at, is the. Is there more investments going to be made in the jv?
Abhishek Khaitan
No, the JV is self sufficient.
Nitin Awasthi
Okay. Even for this growth that. Sorry, even for this market share grab that you are looking at?
Abhishek Khaitan
Yeah, absolutely. Because it’s more of creating the brand and the distribution leverage and the JV itself is throwing lot of cash. So I think there’s no requirement of any investment.
Nitin Awasthi
Understood? Understood. So next question on the up side, UPIML we were. We are always in top two. We sometimes number one. Number two. But financial year 26 we ended it at number one position. Number two position. Officially
Abhishek Khaitan
We are number one.
Nitin Awasthi
Okay. Currently we have moved to number one. Okay. And within the space of UPIM, the UPML segment, the growth there and how much market are we aiming to capture there? First of all, is the segment itself as exciting as the state policy makes it to be and other consumers also as excited about this segment?
Abhishek Khaitan
I think our market share there is about close to 26, 25, 26% and we are aiming at the normal growth, what the market will be having. We are not looking at abnormal growth there.
Nitin Awasthi
Understood. And in particular on the UPML segment, the excitement is there as the state makes it to be
Dilip Banthiya
Consolidated. We are talking about 24, 25% market share in UPML and UPCL.
Nitin Awasthi
Understood.
Dilip Banthiya
Objective and our focus area, core business is on the MFL side which continues to grow in very, very Strong double digit. 20% is our guidance and we continue to focus on that across markets.
Nitin Awasthi
Understood sir. Thank you.
Operator
As there are no further question from the participants, I now hand the conference over to the management for closing comments.
Dilip Banthiya
Yeah. So the current environment reinforces the strength and resilience of Redigo Fitan’s business model. Strong operating performance, margin expansion and improved return ratio and healthy cash flow generation reflect the quality of our growth and impact of the disciplined execution. With a differentiated premium LED portfolio, a robust balance sheet and continued focus on financial discipline, we are well positioned to navigate near term uncertainties and sustain our profitable growth trajectory.
We remain confident in road ahead and committed to creating long term value for our stakeholders. Thanks for joining us today. I look forward to connecting with you next quarter. Thank you.
Operator
Thank you. On behalf of Dam Capital Advisor. That concludes this conference. Thank you for joining us. You may now disconnect your lines.