 "Radico Khaitan up 10%, hits new high on strong Q2 operational performance")
Shares of Radico Khaitan hit a new high of Rs 2,525.50, as they rallied 10 per cent on the BSE in Friday’s intra-day trade after the company delivered strong operational performance for the July-September quarter (Q2) of financial 2024-25 (FY25). The breweries and distilleries company reported a 12.6 per cent increase in the Prestige & Above category of beverages, along with a sequential improvement in earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins. The company's ebitda margin improved 150 bps quarter-on-quarter (Q-o-Q) and year-on-year (Y-o-Y) at 14.5 per cent.
At 09:42 AM, Radico Khaitan was trading 7 per cent higher at Rs 2,445, as compared to the 0.20 per cent decline on the BSE Sensex. Since October 8, in 13 trading days, Radico Khaitan's share price has surged 27 per cent.
Gross Margin during the quarter, however, was 43.6 per cent compared to 44.1 per cent in Q2FY24 and 41.0 per cent in Q1FY25. Gross margin was impacted on a yearly basis due to a significant inflation seen in foodgrain prices that were offset by premiumisation in the Indian-made foreign liquor (IMFL) business. However, they improved 258 bps on a sequential (Q-o-Q) basis due to the ongoing trend of premiumisation, and a stable raw material and packaging material scenario.
The management said they cautiously monitor the trends of grain prices and extra neutral alcohol (ENA) where volatility persists and they expect the trend to improve from Q3FY25 onwards.
Meanwhile, in Q2FY25, the company’s net profit rose 33 per cent Y-o-Y and 7.8 per cent Q-o-Q to Rs 82.2 crore. Net revenue from operations for the quarter grew by 20.7 per cent Y-o-Y to Rs 1,116 crore.
The management expects the company to continue to deliver a double-digit premium volume growth in FY2025. Non-IMFL revenue growth was due to full distillery capacity utilisation of the Sitapur plant which was commissioned during September 2023.
“While we remain vigilant to industry trends, we believe the worst of the input cost pressures is behind us, and we expect to benefit from any favourable shifts in raw material prices in FY2025. Meanwhile, the structural drivers of rising affluence, low per capita consumption levels, and a strong premiumisation trend ensure the robust mid-to-long term potential of the Indian alcoholic beverage sector,” the management said.