Important updates on Radico Khaitan

**Policy Reforms in Uttar Pradesh** * Smaller Pack Sizes (60ml/90ml) are expected to drive volume growth by converting country liquor consumers to IMFL and encouraging trials in premium segments. Pricing clarity is pending from the government. * Composite Shops - Allowing beer, wine, and liquor sales under one license could double distribution reach (e.g., 100 beer + 100 liquor stores → 200 combined outlets). * Supply Chain Reforms - Shift of excise duty payment to wholesalers frees up Radico’s working capital (Rs 100 mn interest savings in FY26). **Margin Expansion Opportunities** * Initiatives like PET bottles (replacing glass), Sitapur distillery, and removal of mono cartons will help in cost optimization * Potential correction in broken rice prices (FCI stock release) may ease input costs. **Near-Term Risks** Existing retailers destocking ahead of license expiry (FY26) could temporarily dampen demand. No price hikes approved; margins stuck at 5-6% despite rising input costs. Profitability hinges on RM cost moderation.