Q3FY21 Company Update - Radico Khaitan - ICICI Direct

Radico Khaitan (RKL) reported volume growth of ~1% YoY in Q3FY21 compared to industry de-growth of 1%. Prestige and above segment continued to perform well with volume growth of 5% YoY. RKL reported revenue growth of 5.6% YoY to Rs. 684 crore. EBITDA grew 21% YoY to Rs. 124.6 crore driven by improved margin profile. EBITDA margin expanded 235 bps from 15.8% to 18.1% due to gross margin improvement and cost rationalisation. Lower Interest cost and higher other income enabled the company to report 45% YoY growth in net profit to Rs. 80.5 crore.

Valuation & Outlook

Radico continues to widen its volume growth performance over other industry players. It is on the cusp of another breakthrough (post dominance of domestic vodka market volumes) with its focus on the bigger domestic P&A whisky segment by launching more brands in the segment. Exports market (8% of revenues) and CSD (8-9% of revenue), present other opportunities to grow its premium products. The company is also expected to become debt free in a year or two. We maintain our BUY rating on the stock with a revised target price of Rs. 580/share (~17x FY22E EPS).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Radico_CoUpdate_Jan21.pdf

Shares of RADICO KHAITAN LTD. was last trading in BSE at Rs.485.95 as compared to the previous close of Rs. 495.2. The total number of shares traded during the day was 190901 in over 2035 trades.

The stock hit an intraday high of Rs. 507.6 and intraday low of 485.95. The net turnover during the day was Rs. 94541406.

Source : Equity Bulls

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