ICICI Direct's research report on Radico Khaitan
Radico Khaitan reported strong margins in Q1FY21 in spite of a decline in revenues. Net revenues for Q1FY21 declined 34% YoY to Rs409 crore due to 43% decline in IMFL volumes to 3.54 million cases. Prestige and above segment volumes declined 47% while regular segment volumes declined 41% YoY. Gross margin increased 660 bps YoY to 54.6%.In spite of negative operating leverage, the company reported a 230 bps YoY improvement in EBITDA margin to 18.4%, which restricted the decline in EBITDA to 25%. Consequently, PAT declined 20% YoY to Rs 44 crore owing to lower tax rate (24%in Q1FY21 vs. 34% in Q1FY20).
Outlook
We maintain our BUY rating on the stock with a revised target price of Rs 460/share (~19x FY22E EPS).
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