Sharekhan has given Buy recommendation for Radico Khaitan with a target price of Rs. 1135 in its research report issued on Aug 12, 2022
Sharekhan’s research report on Radico Khaitan
Radico Khaitan Limited (RKL) posted 26% y-o-y revenue growth, led by strong 14.4% volume growth in IMFL business (prestige and above (P&A) volume grew by 29%); higher raw-material prices affected profitability; GPM/OPM declined by 399/306 bps y-o-y. Increased out-of-home consumption coupled with adequate marketing investments and strong traction to new launches will help the company to maintain double-digit volume growth in the P&A segment in the coming years. Backward integration projects of Rampur plant, price hikes undertaken in the previous quarter, and improved product mix will help margins to scale up in H2.
The stock is currently trading at 38.6x and 29.9x its FY2023E and FY2024E earnings, respectively. We maintain Buy with an unchanged PT of Rs. 1,135.