Buy Radico Khaitan; target of Rs 3250: Motilal Oswal

Motilal Oswal's research report on Radico Khaitan

Radico Khaitan reported strong revenue growth of 32% YoY (est. 22%) in 1QFY26, with total volume growing 37% (beat). The Prestige & Above (P&A) segment clocked volume and value growth of 41% and 43%. Regular segment posted 48% value growth and 52% volume growth, aided by a low base, resolution of state-specific issues, and route-to-market changes in Andhra Pradesh (Oct’24). Excluding AP, total volume growth stood at ~12%, with P&A volume growth at ~20%. The market share in AP increased sharply from 10% in 1HFY25 to 28% in 1QFY26. Non-IMFL delivered moderate revenue growth of 12% due to lower bulk alcohol sales.

Outlook

We believe a ~30% EPS CAGR provides adequate support for sustaining rich valuations. We value the company at 60x P/E on Jun’27E EPS to derive a TP of INR3,250.