Shares of Radico Khaitan rallied 11 per cent, hitting a new high of Rs 1,131.55 on the BSE in Tuesday’s intra-day trade after the company announced launch of two new premium Indian Made Foreign Liquor (IMFL) namely Magic Moments Dazzle Vodka and Royal Ranthambore Heritage Collection Royal Crafted Whisky (blended malt scotch) in the brown and white spirit categories.
Both liquors will be available in select stores in Delhi, Karnataka, Uttar Pradesh, Goa, Maharashtra, Rajasthan and Haryana in the first phase of launch.
The management is extremely optimistic about the fact that this brand will be a game changer in this space and will undisputedly be the most phenomenal trend setter. Vodka currently accounts for less than 5 per cent of the domestic IMFL volumes compared to around 25-30 per cent globally. With the favourable demographic profile and changing consumer preferences, we believe that Vodka industry is bound to expand, the management said.
Currently, Radico Khaitan has five millionaire brands which are 8PM Premium Black Whisky, 8PM Whisky, Contessa Rum, Old Admiral Brandy and Magic Moments Vodka. Radico Khaitan is also one of the largest providers of branded IMFL to the Canteen Stores Department (CSD), which has significant business barriers to entry.
Meanwhile, in past six months, the stock of Radico Khaitan has outperformed the market by zooming 120 per cent, as compared to 25.6 per cent rise in the S&P BSE Sensex.
Overall, the spirits industry volumes in FY2021 suffered significantly due to COVID-19 induced lockdowns during the early part of the year. The strong recovery made by the industry in third and fourth quarters of FY2021 demonstrates the fundamental strength and resilience in the spirits industry in India.
Demand for premium brands is relatively less impacted by the industry slowdown due to COVID-19. Furthermore, where spend on commuting, social activities or holidays are reducing, consumers are having more disposable incomes which they can use to have quality experience at home. Therefore, premium brands are likely to show much more resilience and grow in the near future, Radico Khaitan said in FY21 annual report.
According to Euromonitor International, IMFL volume is expected to reach 353 million cases in CY2025. During the CY2021-2025 period, IMFL sales volume is expected to grow at a CAGR of 4.2 per cent. During the same period IMFL industry value is expected to grow by 4.6 per cent. The vodka industry is expected to perform better during the same period with volume growth of 5.6 per cent and value growth of 11.0 per cent, added report.
The above news was originally posted on www.business-standard.com