Radico Khaitan Ltd. share price target

We initiate coverage on RDCK as a BUY with a price objective of Rs 210, representing a potential upside of 33% in the next 12 months. We arrived at the price target by applying 22 times PE multiple to earnings for the 12 months period to June19.

Radico Khaitan's (RKL) results for 3QFY2017 were below our estimates both on top-line as well as bottom-line fronts. The company's top-line grew by ~4% yoy to `415cr owing to the impact of demonetization, which led to a decline in consumer spending. Moreover, lower sales volume and subdued operating performance led to the de-growth in bot..

For 2QFY2017, Radico Khaitan reported results above our estimates both on top-line and bottom-line front. The company's top-line grew by ~11% yoy to `447cr on back of higher sales of premium products, while the bottom-line grew by ~27% yoy to Rs22cr on the back of improvement in volume and healthy operating performance. Going forward, we ..

For 1QFY2017, Radico Khaitan's results have come in line with our estimates. The company's top-line grew by ~3% yoy to Rs430cr on back of higher sales of premium products while the bottom-line grew by ~25% yoy to Rs22cr on the back of a strong operating performance and lower taxes. Top-line grew ~3% yoy: Volume growth during the quarter w..

For 4QFY2016, Radico Khaitan (RKL) outperformed our estimates on the top-line front although the bottom-line came in flat yoy. The company's top-line grew by ~10% to Rs378cr on back of higher sales of premium products while the bottomline came in flat on a yoy basis at Rs15cr due to higher interest costs and taxes. During the quarter the ..

Sales ahead of estimate, but margin falls short of expectation Radico Khaitan's (RDCK) net sales grew by 10.4% YoY to INR3.8b (vs. our estimate of INR3.7b) in 4QFY16, with underlying volume down 4.9% YoY to...

For 3QFY2016, Radico Khaitan (RKL) outperformed our estimates on the earnings front although the top-line came in flat yoy. On the operating front, the company reported margin expansion, primarily on account of lower raw material and selling & distribution expenses. Further, on the bottom-line front, the company reported a healthy growth due to strong operating performance and lower interest cost. Regular & others products segment de-grew which restricted overall top-line growth but healthy volume growth in Prestige & above products segment: For the quarter, RKLs top-line grew flat yoy to ~Rs401cr (our estimate was of ~ Rs432cr), mainly due to the companys shift in focus towards prestige and above products over higher volume mass market products. During the quarter, Prestige & above brands volume grew ~10.7% yoy. Prestige and above brands contribution to total Indian made foreign liquor (IMFL) volumes increased from 21.4% in 3QFY2015 to 24.6% in 3QFY2016. However, de-growth in Regular & others products segment which contribute more than 75% of total sales volume, restricted the overall top-line growth of the company. The company is continuously focusing on the high-margin Premium products segment to increase revenue. PAT grew ~19% yoy: The reported net profit for the quarter grew...

For 2QFY2016, Radico Khaitan (RKL)s results have come in above our estimates. The companys top-line grew by 2% yoy, mainly due to growth in Prestige and above products segment. On the operating front, the company reported margin expansion, primarily on account of lower selling & distribution and other expenses. Further, on the bottom-line front, the company reported a healthy growth due to strong operating performance and lower interest cost. Regular & others products segment de-grew which restricted overall top-line growth but Healthy volume growth in Prestige & above products segment: For the quarter, RKLs top-line grew by ~2% yoy to ~Rs370cr (our estimate was of ~ Rs364cr), mainly due to healthy volume growth in Prestige and above products segment (up ~8.5%). Prestige and above brands contribution to total Indian made foreign liquor (IMFL) volumes increased from 21.2% in 2QFY2015 to 24.7% in 2QFY2016. However, de-growth in Regular & others products segment which contribute more than 75% of total sales, restricted the overall top-line growth of the company. The company is continuously focusing on the Premium products segment to increase sales which is a high margin business. PAT grew ~25% yoy: The reported net profit for the quarter grew by 25%...