For 2QFY2017, Radico Khaitan reported results above our estimates both on
top-line and bottom-line front. The company’s top-line grew by ~11% yoy to
`447cr on back of higher sales of premium products, while the bottom-line grew
by ~27% yoy to Rs22cr on the back of improvement in volume and healthy
operating performance. Going forward, we believe that the company has the
potential to perform better on the bottom-line front on the back of (a) volume
growth, (b) higher sales of premium products, (c) anticipation of better price
hikes, and (d) gradual reduction in debt, which should lead to significant savings
in interest costs. Hence, we recommend an ACCUMULATE rating on the stock
with a target price of Rs147.
View Full Report in Browser 
