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Radico Khaitan Ltd.’s Q1 FY22 was in-line with volumes marginally above estimate off-set by lower gross margin due to mix change.
Revenue/Ebitda/adjusted profit after tax were up 47.3/21.5/35.7% YoY and (down 3.3/ down 8.3/ down 3.2% versus Q1 FY20).
Over FY17-20, Radico Khaitan’s revenue/Ebitda/adjusted profit after tax compound annual growth rate was 13/21/40% versus 4/12/19% for United Spirits Ltd.
We see scope for further re-rating of the company led by expansion in market size and premiumisation driving superior growth.
Launch of two new premium whiskies in large addressable market (~50 million cases) is a potential trigger.
Adhering to investors’ requests, change of auditors is positive at the margin.
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