So, like, I guess MOFSL, which stands for Motilal Oswal Financial Services Ltd, decided to jump on the bandwagon and start covering Radico Khaitan. They’re all like, “Yo, buy this stock, it’s gonna hit Rs 3,000” – which is like, a 22% increase from where it’s at now, INR 2,453. And why, you ask? Well, apparently this India-UK FTA thing is gonna help Radico out by cutting down on input costs and boosting its premium segment. Sounds pretty cool, right?
According to MOFSL, Radico has been killing it with a 15% revenue growth from FY19-25. They’re seeing a 12% compound annual growth rate (CAGR) in Indian Made Foreign Liquor (IMFL) and a 23% CAGR in non-IMFL segments. That’s some serious growth right there. And get this – they’re expecting a revenue CAGR of 16% over the next few years, with an improvement in EBITDA margin to 16.2% by FY28. So yeah, things are looking pretty good for Radico.
The recent India-UK free trade agreement is gonna be a game-changer for Radico. They’re gonna save like, INR 750 million by FY26 thanks to the reduction in customs duties on whisky and gin. That’s gonna make their premium brands even more profitable, like Sangam, After Dark, and Ranthambore. Plus, Radico has been expanding like crazy, covering over 100,000 retail outlets and 10,000 on-premise locations across India. They’re really making a name for themselves in the spirits market.
Not really sure why this matters, but Radico has been facing some challenges with inflation in glass and Extra Neutral Alcohol (ENA), which have been eating into their margins. But hey, they’re optimistic about bouncing back. With raw material prices easing up and some operational improvements in the works, they’re expecting to see some nice margin expansions in the near future. MOFSL is even projecting a significant EBITDA margin increase by FY28. So yeah, things are looking up for Radico, for sure.