Radico Khaitan slipped 2.83% to Rs 956 after the the liquor maker's standalone net profit tumbled 25.2% to Rs 51.8 crore as against Rs 69.3 crore recorded in Q2 FY22.
Net revenue from operations rose 8.6% to Rs 761.4 crore in quarter ended 30 September 2022 from R s 701.3 crore posted in Q2 FY22.
Total Indian Made Foreign Liquor (IMFL) volume growth was 10.9% year on year (YoY) led by Prestige & Above category volume growth of 22%. But for the rationalization of volumes of certain brands, total IMFL volume growth could have been higher. Prestige & Above net revenue growth was at 25% as compared to Q2 FY22. IMFL sales value accounted for 80.1% (versus 80.2% in Q2 FY22) of the net revenue from operations.
The company's profit before tax stood at Rs 69.8 crore in Q2 FY23, declining 25.8% from Rs 94 crore posted in the corresponding quarter previous year.
EBITDA dropped 19.3% to Rs 89.6 crore in Q2 FY23 as against Rs 111 crore posted in Q2 FY22. EBITDA margin reduced to 11.8% in Q2 FY23 as compared to 15.8% reported in the same period last year.
Gross margin during the quarter was 41.6% as compared to 43.6% in Q1 FY23 and 45.3% in Q2 FY22. On YoY basis, continued commodity inflation resulted in gross margins compression, particularly in the non-IMFL business. Given a favorable product mix change, impact of cost push on the gross margin of the IMFL business was mitigated to a large extent.
The company said that on a sequential basis it has experienced stabilizing trend in certain commodities, overall commodity scenario still remains volatile, it added.
Radico Khaita said its strategy is to continue to make prudent marketing investments over existing core brands and new launches to sustain the growth and market share. During H1 FY23, advertising and sales promotion (A&SP) as % of IMFL sales was 5.1% as compared to 5% in H1 FY22. On a quarterly basis, the amount may vary but the company expects to maintain A&SP spend around 6% to 8% of its IMFL revenues to be able to drive the sales momentum.
The company's net debt stood at Rs 288.2 crore, an increase of Rs 172.2 crore after capex on new projects of Rs 249.1 crore since March 2022.
Commenting on the results and performance, Dr. Lalit Khaitan, chairman & managing director said, In the context of a challenging operating environment, we have delivered a buoyant volume growth and consistent financial performance. This underscores the strength of our premium brand portfolio, operational excellence, dynamic financial management and our clearly defined strategic roadmap. Our premium brands growth is very strong, particularly the luxury brands such as Jaisalmer Indian Craft Gin and Rampur Indian Single Malt.
He further added, We have already expanded our craft gin production capacity to more than double. While the inflationary trend is persistent, we have seen early signs of stability in certain commodities which is encouraging. Overall, the scenario still remains volatile. Radico Khaitan is progressing firmly on the path of its exciting premium brand creation journey which will be accentuated by a strong backward integrated manufacturing platform.
Abhishek Khaitan, managing director said, Business growth continues to be strong and resilient driven by our Prestige & above category brands. We continue to aggressively pursue our new product development pipeline to drive future growth opportunities and announced some exciting launches during the quarter including the newest expression of Rampur Indian Single Malt called Jugalbandi. Building upon the market leadership of Magic Moments, we launched a low alcohol ready-to-drink, Magic Moments Vodka Cocktail. It is the only vodka based RTD available in the Indian markets. We also launched 1965 Spirit of Victory Lemon Dash Rum which will help the company tap into a new spirit category of white rum.
We are pursuing price increases in a few large states which coupled with our ongoing premiumization, portfolio rationalization and value engineering will drive profitability growth. Going forward, we continue to focus on our long-term growth plans with new brand introduction in both white and brown spirits and leveraging the benefits of our capital investments, Khaitan stated.
Radico Khaitan is one of the oldest and the largest manufacturers of Indian Made Foreign Liquor (IMFL) in India.
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