Radico Khaitan shares have had multibagger returns so far this year and the stock has gained over 130% (Year-to-date or YTD) in 2021. From ₹436 per share level in November last year, multibagger stock currently hovers ₹1,052 each. Brokerage and research firm Emkay sees further upside in the stock as it has a buy rating.
Consistent performance in P&A, improvement in working capital and reduction in debt keep the brokerage on Radico Khaitan positive. Also reopening/regulatory easing could be accelerated. The company reported a healthy performance with 13% topline growth, trailing industry growth of around 7%. P&A growth was strong at 22% with 18% volume growth.
“Management remains optimistic about delivering strong P&A growth going forward. Growing success of innovations, strong core brand and new initiatives in premium segment are expected to outperform P&A and increase market share. ₹1,170 (from ₹1,090 earlier).
With further expansion of the P&A portfolio and strong trends across key brands, management expects to maintain double-digit growth in P&A going forward.
“The margin pressure should be temporary. Price hike in non-IMFLs is likely to take place by Q1FY23. This, coupled with strong mix improvement from P&A and cost efficiency, should continue to drive margin gains in FY 2013-24E. Management is targeting EBITDA margin in hightens in 2-3 years,” Emkay said.
With increasing success, new launches of Radico Khaitan are being scaled up. Jaisalmer Craft Gin has now been expanded to ten states. The recent launches aim to further expand its presence in the luxury segment. The company has launched Royal Ranthambore Whiskey and Dazzle Vodka in UP and Maharashtra. These products will be introduced in other eight major states in H2.
The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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