Shares of Liquor maker Radico Khaitan have outperformed by turning into a multibagger stock for 2021. Radico shares have rallied over 100% this year (year-to-date to YTD), doubling investors’ money since the start of the year. From ₹450 level in the start of the year, the stock currently trades over ₹930, giving multibagger returns.
Radico Khaitan (earlier Rampur Distillery Company) is among the largest manufacturers of Indian made foreign liquor (IMFL) in India. The company is also a supplier of Indian made Indian liquor (IMIL) and bulk alcohol in India. Radico has 60% market share in vodka, 60% market share in super premium brandy, 30% market share in rum and 6% market share in whisky.
The stock was trading nearly 5% higher at ₹930 per share in Thursday’s session on the BSE after reports suggested that Goldman Sachs has initiated coverage on Radico Khaitan with a Buy rating.
The company’s Q1FY22 results beat industry by a wide margin. Radico Khaitan’s Q1 consolidated net profit rose over 35% to ₹60.87 crore for the first quarter ended June 2021, helped by volume growth and a lower base of the pandemic hit corresponding quarter. Its sales volume of total Indian-made foreign liquor (IMFL) was up 58.8% during the quarter to 5.61 million cases.
“Despite state-level lockdowns and supply chain challenges posed by COVID-19 in Q1 FY2022, we delivered a strong all-round performance. As restrictions are lifted and normalcy resumes, month-on-month volumes indicate a positive trend and we are confident of an improved industry performance, led by the Prestige & Above segment, in the coming quarters,” Radico Khaitan Managing Director Abhishek Khaitan had said.
ICICI Direct in a result note on Radico Khaitan onJuly 30 had said that the Uttar Pradesh government has stated a vision of increasing excise revenues from current ₹32000 crore to ₹50000 crore in three years. Radico has 30% market share in UP and is expected to reap benefits due to the targeted sales by the state government (led by increased distribution).