Range
Stop Loss
Target
Radico Khaitan (NSE Cash) - Buy
` 111 - `109
` 97
` 135
Weekly Chart
Technical Evidences
Looking at the weekly chart, it can be
seen that the stock broke out on the
upside from its 10-month congestion
zone of `100 - `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’
level of ` 106.
Considering the ‘Higher Bottom
Higher Bottom’ formation in the
weekly chart, we interpret this
correction as a pull back towards the
breakout point.
Thus, we advise traders to buy this
stock from current level to a decline
up to ` 109 for a target of ` 135 in
coming three months.
Source: Falcon
( Chart time: EOD as on January 14,2016)
January 15, 2016
Stock Info
Radico Khaitan
Radico Khaitan Ltd (RKL) is a leading manufacturer of Indian made foreign liquor
Sector
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
Market cap
1,501
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
Beta
0.8
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
131/78
We expect the price of ENA (a key raw material) to remain stable and potentially
Avg. Daily Volume
1,50,700
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 (`)
2
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
Promoters
40.5
forward EV/Sales multiple front, RKL is trading at a huge discount to its close
peer, United Spirits.
MF / Banks / Indian Fls
21.1
Company
Sales
OPM PAT EPS RoE P/E P/BV
EV/BITDA
EV/Sales
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FII / NRIs / OCBs
13.3
FY2016E
1,565
12.2
75
5.7
8.3
19.6
1.7
11.8
1.4
Indian Public / Others
25.1
FY2017E
1,687
13.0
95
7.1
9.6
15.7
1.5
10.1
1.3
January 15, 2016
Technical Research Team Tel: 022 - 40003600
E-mail: [email protected]
Website: www.angelbroking.com
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and
Metropolitan Stock Exchange of India Limited. It is also registered as a Depository Participant with CDSL and Portfolio Manager with SEBI. It also has registration with AMFI as a
Mutual Fund Distributor. Angel Broking Private Limited is a registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration
number INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in securities Market. Angel
or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than 1% in the company covered by Analyst. Angel or its associates/analyst
has not received any compensation / managed or co-managed public offering of securities of the company covered by Analyst during the past twelve months. Angel/analyst has not
served as an officer, director or employee of company covered by Analyst and has not been engaged in market making activity of the company covered by Analyst.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be
construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of
an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the
merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a
company's fundamentals and, as such, may not match with a report on a company's fundamentals.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not
represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/
group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or
warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the
information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information.
Note: Please refer to the important ‘Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the
disclosure status in respect of those stocks. Angel Broking Pvt. Limited and its affiliates may have investment positions in the stocks recommended in this report.
Disclosure of Interest Statement
Radico Khaitan
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
January 15, 2015