Buy Radico Khaitan; target of Rs 3700: Emkay Global Financial

Emkay Global Financial' research report on Radico Khaitan

The management has aligned its portfolio across segments and price points, as it continues to address evolving consumer needs. Competition is likely to remain intense, given the attractiveness of the Indian market vs other global markets. Vodka market’s expansion is likely to be positive for Radico. Its thrust remains on taking India to the world and hence, it plans to continue to enhance its portfolio. With low capex needs (except for sourcing), the management sees a net-cash position by FY27, post which fund generation will be used to reward shareholders.

Outlook

We met the management of Radico Khaitan. Dilip Banthiya, CFO, and Saket Somani, Vice President – Finance and Investor Relations, shed light on the company’s aspirations, growth path, and margin development. We maintain BUY with a Sep-26E TP of Rs3,700, on 60x P/E, as we see Radico executing better and improving its topline/margin which will aid healthy earnings.

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