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Radico Khaitan Sees 15% Upside, Driven by Luxury Segment and Expanding Reach

Strategic Insights

— 2 min read

Radico Khaitan, a midcap beverage company, is expected to see a 15% upside, according to Motilal Oswal. The company's growth in the luxury segment and expanding distribution network are key drivers of this optimism. With a strong presence in the Prestige and Above (P&A) category, Radico Khaitan is poised to take advantage of the growing demand for premium products.

Key Takeaways:

  • Radico Khaitan's luxury segment products have expanded, with the company holding an 8% market share in the P&A category.
  • The company has increased its distribution network to 100,000 retail touchpoints, up from 75,000 in FY19.
  • Radico Khaitan has a 15 million-case P&A portfolio, with a 20% revenue CAGR in the P&A segment.
  • The company's revenue mix has increased in key states, and it continues to penetrate deep into premium markets.
  • Healthy financials, with a 15% revenue CAGR from FY19 to FY25, drive optimism.
  • Radico Khaitan's operating margin fell from 17% to 14%, but the company is looking to manufacture more in-house to increase margins.
  • The recently announced India-UK Free Trade Agreement is expected to benefit Radico Khaitan, with customs duties on imports for Whisky and Gin to be reduced.
  • Risks include price inflation for glass and ENA, increased excise duty, and price competition.

Statistics:

  • Radico Khaitan's stock has delivered a 25x return in the last 10 years and an 8x return in the last 5 years.
  • The company's 10-year returns are the best among its rivals, including United Spirits, United Breweries, and Allied Blenders.
  • Radico Khaitan has around 15 million cases in the P&A portfolio, with a 20% revenue CAGR.
  • The P&A industry has 200 million cases, with Radico Khaitan holding a 7.5% market share.
  • The company sold 31 million cases in FY25, up from 21 million in FY19.
  • Radico Khaitan's revenue mix has increased in key states, including Uttar Pradesh, Andhra Pradesh, Telangana, Maharashtra, and Tamil Nadu.

Sources:

  • [Source 1: TradingView](https://www.tradingview.com/)
  • [Source 2: Motilal Oswal and Screener](https://screener.infolynx.in/)
  • [Source 3: TradingView](https://www.tradingview.com/)
  • [Source 4: Motilal Oswal](https://www.motilaloswal.com/)
  • [Source 5: IE Online Media Services Pvt. Ltd., distributed by Contify.com](https://www.contify.com/)

Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor.

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