“BUY” This Mid Cap FMCG Stock For 20% Upside In 2022: ICICI Direct

The brokerage’s take on Radico Khaitan Ltd

ICICI Direct has stated in its research report that "The liquor sector is witnessing emergence of newer premium price points due to higher instances of at-home liquor consumption. Fewer avenues for customer discretionary spend resulted in higher spends towards upgradation of liquor brands (that typically exhibit higher customer stickiness and customer loyalty). The company is capitalising on the trend by expanding its premium portfolio by adding several new brands in the next two years."

According to the brokerage "Radico's foray into canteen stores department (super-premium category) will lead to a strong brand image in the super-premium whisky category. The company has already demonstrated success in the premium category (both whisky and vodka category) via brand extension route (Magic Moments Verve, 8 PM premium black). Nearing net-debt free status with return ratios reaching 20%+ levels."

Buy Radico Khaitan Ltd Says ICICI Direct

The brokerage has claimed in its research report that "Radico has the distinction of being among very few domestic players that have, over the years, entered and generated brand equity in the prestige and above liquor segment. We remain positive on the stock and maintain our BUY recommendation. We value the stock at Rs. 1450 i.e. 38x P/E on FY24E EPS."

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.