Radico Khaitan (NSE Cash) - Buy
Looking at the weekly chart, it can be
seen that the stock broke out on the
upside from its 10-month congestion
78 during the month
Breakout from congestion
of November 2015.
zone with rise in volumes
Recently, after posting a high around
123.30, the stock price gave decent
correction around the daily ‘89 EMA’
Considering the ‘Higher Bottom
Higher Bottom’ formation in the
weekly chart, we interpret this
correction as a pull back towards the
Thus, we advise traders to buy this
stock from current level to a decline
109 for a target of
coming three months.
( Chart time: EOD as on January 14,2016)
January 15, 2016
Radico Khaitan Ltd (RKL) is a leading manufacturer of Indian made foreign liquor
Breweries & Distilleries
(IMFL). It has a strong pan-India presence with growing sales in the premium
brands category. The IMFL segment is underpenetrated and leaves scope for
growth for domestic liquor companies. Going forward, increase in income levels
would lead to higher growth in IMFL brands. RKL has strong brands in the
premium liquor category, which should lead to higher revenue for the company.
The company's premium offerings have reported a CAGR of ~26% over the last
seven-year period, and we expect the growth momentum to continue.
52 week high/low
We expect the price of ENA (a key raw material) to remain stable and potentially
Avg. Daily Volume
even decline, going forward. This is because sugar production during the year
has risen by ~16% yoy and demand for ethanol from Indian oil marketing
companies for blending with petrol is also expected to be lower due to an
Face Value (
unfavourable price differential.
We expect a significant hike in liquor prices in the coming financial year as there
haven't been any significant ones in recent times. Also, we believe that the
Shareholding Pattern (%)
industry leader - United Spirit would shift focus on profitability over volume
growth considering the debt on its Balance Sheet, which in turn, should lead to
increased scope for other liquor companies to hike prices. Further, on the
forward EV/Sales multiple front, RKL is trading at a huge discount to its close
peer, United Spirits.
MF / Banks / Indian Fls
OPM PAT EPS RoE P/E P/BV
FII / NRIs / OCBs
Indian Public / Others
January 15, 2016
Technical Research Team Tel: 022 - 40003600
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January 15, 2015