Buy Radico Khaitan; target of Rs 3090: Sharekhan

Sharekhan's research report on Radico Khaitan

We expect P&A volumes to clock an 18% volume CAGR during FY25-27, taking P&A volume contribution to 52% by FY27 aided by scale-up of recent launches, new launches in the luxury and premium segments and distribution expansion within India and overseas. Premiumisation, cost optimisation, stable/declining raw material prices and operating leverage to aid a ~100 bps annual rise in OPM for 2-3 years. With strategies in place, we expect RKL’s revenues and PAT to post an 18% and 41% CAGR, respectively, over FY25-27.

Outlook

We maintain a Buy rating on Radico Khaitan Ltd (RKL) with a revised PT of Rs. 3,090. Stock trades at 67x/50x its FY26E/FY27E earnings, respectively.