The liquor manufacturer's consolidated net profit slipped 7.9% to Rs 72.41 crore on 10.5% jump in net sales to Rs 630.05 crore in Q2 September 2020 over Q2 September 2019.
Consolidated profit before tax (PBT) soared 49.5% to Rs 92.28 crore in Q2 September 2020 as against Rs 61.72 crore in Q2 September 2019. Current tax expense for the quarter surged 140.92% to Rs 23.49 crore as against Rs 9.75 crore in Q2 September 2019. The Q2 result was declared during market hours today, 28 October 2020.
Total Indian-made foreign liquor (IMFL) volumes grew 4.6% to 6.04 million cases in Q2 September 2020 from Q2 September 2019. Prestige & above brands volume rose 3.6% to 1.69 million cases in Q2FY21 as against Q2FY20. Prestige & above brands contribution to the total IMFL volumes stands at 28% during the quarter as compared to 28.3% in the corresponding quarter last year. Gross margin expanded to 48.9% in Q2FY21 from 48% in Q2FY20.
EBITDA jumped 23.6% to Rs 106.65 crore in Q2 September 2020 over Q2 September 2019. EBITDA margin expanded to 16.9% in Q2FY21 as against 15.1% in Q2FY20, due to improved realization. Price realization improved due to a better state & product mix, strong exports and price increase in one key liquor consuming state.
EBITDA margin also expanded due to gross margin improvement and cost rationalization. During Q2 FY2021, advertising & sales promotion (A&SP) expenses declined by 24.2% to Rs 29.85 crore but on a Q-o-Q (quarter-on-quarter) basis, it increased by 52%. As a percentage of IMFL sales, A&SP expenses were 6% compared to 7.1% for the full year FY2020. Given the COVID-19 scenario, A&SP expenses during the period were relatively lower than last year.
As of 30 September 2020, total debt was Rs 311.45 crore. Cash & bank balances were Rs 58.54 crore resulting in net debt of Rs 252.91 crore (versus Rs 382.04 crore as of 31 March 2020). Gross debt consists of 310.64 crore of working capital loans and Rs 0.81 crore of long-term loans. During this period, the company saw strong overdue receivable collections resulting in net debt reduction of Rs 129.13 crore. The firm continues to make judicious marketing investment which enables it to continue market share expansion, as per the company's press statement.
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Commenting on the Q2 performance, Dr Lalit Khaitan, the chairman & managing director (MD) has said that: "After a difficult start to the financial year, Q2 FY2021 results demonstrated a sharp recovery in Radico Khaitan's performance. However, the industry revival is dispersed with a few states still reeling under pressure due to a high tax regime, prolonged and local level lock downs. Radico Khaitan continues to work on various fronts including new brands development, rationalization of cost base and further strengthening our sales & distribution network. We are using technology more than ever before, across all our functions, to drive transformation in the work environment and support decision making. Although the industry scenario is still very uncertain due to the evolving COVID-19 situation, we believe that the upcoming festive season will bring some cheers to Q3 FY2021 industry performance."
The impact of COVID-19 in Q2 FY2021 financials results have marginalised. The group is said that it has sufficient liquidity and demand for its products to continue its operations. However, the group will continue to closely monitor, any material changes, looking at future economic conditions.
Shares of Radico Khaitan rose 2.28% to Rs 456 on Wednesday, bucking a weak market trend.
Radico Khaitan produces and distributes branded liquor. The company operates molasses and grain distilleries and produces whiskey, rum, brandy, and vodka.
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