ICICI Direct's research report on Radico Khaitan
Radico Khaitan (RKL) reported 15% revenue growth in Q4FY20 to Rs 585 crore. Gross margin declined 400 bps to 48.6% owing to elevated input cost. However, the company reported flat EBITDA margin at 14.1% on account of lower employee, selling and other expense, which declined 66 bps, 220 bps, 340 bps, respectively. Consequently, EBITDA grew 15% YoY to Rs 82.3 crore. Higher depreciation, interest and lower other income led PBT before extraordinary expense to grow 10% to Rs 62.6 crore. Further, exceptional loss of Rs 8.6 crore and loss from associate of Rs 6 crore led net profit to fall 20% to Rs 33 crore.
RKL is poised to enhance its financial performance. We maintain our BUY rating on the stock with a revised target price of Rs 400/share (~18x FY22E EPS).
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