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Sharekhan Given A 'Buy' Rating To This Stock, For A 17.24% Upside

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Brokerage firm Sharekhan initiated a buy call for the stocks of Radico Khaitan Ltd. with a target price of Rs. 1,475, within 1 year. "Radico Khaitan Limited (RKL) is on consistent growth footing because of its strong ability to launch new products, improving traction to premium categories, and favorable liquor policies in various states," the firm thinks.

 

Target Price

Target Price

The Current Market Price (CMP) of Radico Khaitan is Rs. 1,258. The brokerage firm, Sharekhan has estimated a Target Price for the stock at Rs. 1,475. Hence the stock is expected to give a 17.24% return, in 1 year.

Stock Outlook
Current Market Price (CMP)Rs. 1,258
Target PriceRs. 1,475
1 year returns17.24%

Company performance

Company performance

Radico Khaitan's revenue stood at Rs. 2,418 crore in FY 21, which is expected to grow to Rs. 2,878 crore in FY 22. The company's adjusted PAT was Rs. 271 crore in FY 21, which is expected to grow to Rs. 286 crore. "The company's prestige and above (P&A) brands have given a CAGR of 12% over FY2015-20, ahead of industry's volume growth. Some of its mature brands such as Morpheus brandy (60% market share in the premium brandy segment) are likely to join the millionaires club in the coming years."

Comments by Sharekhan
 

Comments by Sharekhan

Sharekhan stated, "RKL's strong ability to launch new products, improving traction to premium categories, and favorable liquor policies in various states will help achieve volume CAGR of 13.5% over FY2021-FY2024 (prestige and above segment to post a 19% CAGR). RKL's revenue and PAT are expected to post CAGR of 21% and 22% over FY2021-FY2024 with the contribution of the premium segment going up to 35% in FY2024."

Commenting on the liquor sector Sharekhan added, By Q4FY2021, 8 out of 11 top liquor consuming states had returned to above pre-Covid levels," - which can be an optimistic factor for RKL.

About the company

About the company

Radico Khaitan Limited (RKL) liquor company has 5 brands, which are selling more than 1 million cases per annum and Morpheus Premium Brandy is expected to get added to the 1 million leagues over the next 2 years. The company's recent launches such as Royal Ranthambore Heritage Collection Whiskey and Magic Moments Dazzle Vodka are gaining good traction in key markets. The company stock has delivered returns of ~40% in the past 3 months.

(Also read: This SIP In Contra Fund Given Upto 86% Return: Top Rated By Crisil)

Disclaimer

Disclaimer

The above stock was picked from the brokerage report of Sharekhan. 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.

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Story first published: Monday, January 10, 2022, 15:09 [IST]
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