Letter to the Shareholders
DEAR
SHAREHOLDERS,
I am pleased to present the Annual Report of Radico Khaitan for the
financial year ended March 31, 2024. The past year has been one of consolidation for our
Company as we strengthened our core brands, expanded our luxury and premium portfolio, and
enhanced our backward integration capabilities.
Industry Context
The year was marked by volatility in raw material prices for the global
alcoholic beverage industry.
High inflation in many developed economies dampened consumer sentiments
and purchasing power, impacting the industry's performance. Despite these challenges,
India remains one of the few large alcoholic beverage markets consistently showing growth
momentum.
An interesting trend in the Indian consumer market is the shift towards
premiumisation. Indian consumers are increasingly embracing premium products and services
across various categories. This evolving consumer preference is driving demand for premium
brands and experiences within the alcoholic beverage sector as well. This shift is an
encouraging sign for the future of the industry and aligns perfectly with our strategic
focus.
Performance Review
At Radico Khaitan, our premium portfolio, focussed marketing
strategies, and integrated business model enabled us to deliver strong operational
performance despite a difficult macroeconomic environment. Outpacing the industry growth
rate, our Prestige & Above category brands grew by 20.3% year-on-year in volume terms,
with all core brands showing strong momentum. Our premium product mix, along with price
increases, helped partially offset the pressure of rising raw material prices.
I extend my heartfelt thanks to our customers, partners, and
shareholders for making FY2024 another year of inspiration and progress. My gratitude also
goes to the management team and everyone at Radico Khaitan for their outstanding
commitment. With the continued support and trust of all stakeholders, our Company is
well-positioned to enhance its performance.
Operational Highlights
We continued to expand our luxury and super- premium portfolio to meet
the discerning tastes of consumers. Launched overseas, the Kohinoor Reserve Indian Dark
Rum taps into the growing appreciation of Indian luxury alcoholic beverages by both the
Indian diaspora and mainstream consumers. This launch, along with existing aspirational
offerings such as Rampur Indian Single Malt and Jaisalmer Indian Craft Gin, enables us to
take India to the world and make India proud.
Another exciting addition to our premiumisation strategy was the launch
of the Spirit of Victory 1999 Pure Malt Whisky in the domestic market.
Our Master Blender has travelled over the world to evaluate various
single malts and has blended them meticulously together with our Indian single malt to
craft this exquisite pure malt. We are confident that Spirit of Victory 1999 Pure Malt
will go on to create a mark of its own as many of our previous luxury brands.
Capitalising on the success of Jaisalmer, we tapped into the
super-premium gin category with the launch of "Happiness in a Bottle".
Additionally, in the white spirits space, our leadership in the vodka market led to the
launch of the unique and premium Magic Moments Remix Pink Vodka, under the Magic Moments
brand umbrella.
A landmark achievement for the year was the completion and
commissioning of our 350 KLPD grain ENA distillery at Sitapur. The Sitapur plant secures
long-term ENA supplies and positions us to capitalise on future growth opportunities with
enhanced bottling capacities.
Embedding Sustainability
We firmly believe that sustainable business growth requires a steadfast
commitment to sustainability.
Our programmes are designed to drive social and economic progress
within the communities we serve. We focus on enhancing community development, improving
livelihoods, promoting education and healthcare, including preventive measures, and
safeguarding environmental sustainability. Our strong focus on water conservation is
evident in the rainwater harvesting and groundwater recharging initiatives in and around
our plants. Sustainability is not just a part of our operations; it is embedded in our
future roadmap. We continue to work closely with the communities around our units to
achieve our sustainability targets, ensuring that our growth benefits both the environment
and society.
Business Outlook
With the expectation of a normal monsoon and better crop yield, we are
seeing early signs of softening grain prices. While we remain vigilant to industry trends,
we believe the worst of the input cost pressures is behind us, and we expect to benefit
from any favourable shifts in raw material prices in FY2025. Meanwhile, the structural
drivers of rising affluence, low per capita consumption levels, and a strong
premiumisation trend ensure the robust mid-to-long- term potential of the Indian alcoholic
beverage sector.
At Radico Khaitan, we are progressing well on our premium brand
creation journey. Innovation and consumer aspirations will remain at the core while
developing and building these brands. The strength of our product portfolio, together with
our integrated manufacturing facilities and extensive distribution platform, will enable
us to deliver balanced growth and value creation for all our stakeholders.
Thank you for your continued support.
Sincerely,
Dr. Lalit Khaitan
Chairman & Managing Director