(Reuters) – India’s Radico Khaitan reported a 27% rise in third-quarter profit on Wednesday, helped by strong festive season demand for its premium spirits.
The company reported consolidated net profit of 954.9 million rupees ($11.04 million) for the three months ended Dec. 31, compare to 751.5 million rupees a year ago.
Revenue from operations rose 7.2% to 44.41 billion rupees.
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KEY CONTEXT
Radico has increased focus on its premium segment in recent years, which includes brands such as Rampur single malt whisky. A bottle of the brand can cost anywhere between 8,000 rupees – about the same as the monthly per capita income – to 500,000 rupees.
The share of premium brands in Radico’s sales mix has risen over the past few quarters, shielding the company’s bottom line from inflationary pressures on demand.
Premium segment revenue grew 24.7% in the third quarter, compared to 15% revenue growth in the regular segment.
Moreover, favorable liqour policies in states such as Karnataka, which reduced taxes on premium alcohol, and Andhra Pradesh, which allowed private retailers to sell spirits, also boosted demand.
PEER COMPARISON
Valuation (next Estimates (next Analysts’ sentiment
12 months) 12 months)
RIC PE EV/EBIT Revenue Profit Mean # of Stock to Div yield
DA growth growth rating* analys price (%)
(%) (%) ts target**
Radico Khaitan Ltd 60.05 36.75 13.81 34.32 Buy 6 0.84 0.14
United Spirits Ltd 57.83 40.25 10.87 16.08 Buy 13 0.88 0.65
United Breweries 66.77 42.35 12.53 44.23 Hold 12 0.99 0.49
Ltd
Tilaknagar 37.96 26.10 1.57 Strong 1 0.92 0.14
Industries Ltd Buy
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER TO DECEMBER STOCK PERFORMANCE
— All data from LSEG
— $1 = 86.4970 Indian rupees
(Reporting by Ananta Agarwal in Bengaluru; Editing by Varun H K)
