Anand Rathi has given Buy recommendation for Radico Khaitan with a target price of Rs. 1009 in its research report issued on Jul 29, 2021
Anand Rathi’s research report on Radico Khaitan
Outpacing its peers, Radico Khaitan had yet another healthy quarter. The drop in gross margin q/q was largely due to a weaker mix. The trend should improve in coming quarters with easing of restrictions and improvement in the Prestige & Above (P&A) category (also seen in Jul). We expect healthy sales/EBITDA CAGRs (14%/17%) over FY21-23. Superior execution, market-share gains, healthy new launch pipeline in P&A in H2 FY22, strong balance sheet and likely improved return profile offer sound assurance. We expect the discount to United Spirits to reduce, and raise our target multiple to 35x FY23e earnings (a ~20% discount to UNSP, earlier 27x).
We maintain our Buy rating, with a revised target price of Rs1,009 (earlier Rs721).