Radico Khaitan: Mukul Agrawal Alcohol Stock Trading at a 22% Discount—A Strong Watchlist Contender
Introduction
Mukul Agrawal Alcohol Stock : Khaitan Ltd, one of India’s leading liquor manufacturers, has been catching investor attention, especially with its stock currently trading at a 22% discount from its 52-week high. With a strong presence in both domestic and international markets, strategic product launches, and solid financial performance, this stock is one to watch for investors looking for long-term growth.
Ace investor Mukul Agrawal holds a 1.05% stake in the company, further reinforcing confidence in its growth potential.
Growing Global Demand for Indian Spirits
The global market for Indian spirits is on the rise, presenting a major growth opportunity. The Agricultural and Processed Food Products Export Development Authority (APEDA) is working to promote Indian alcoholic and non-alcoholic beverages worldwide. Their goal? To hit $1 billion in export revenue.
As part of the ‘Make in India’ initiative, the organization is expanding Indian liquor exports to key international markets. In FY 2023-24, India’s alcoholic beverage exports crossed $262.1 million (Rs. 2,200 crore), with India ranking 40th globally. This increasing international demand bodes well for companies like Radico Khaitan.
Price Action & Past Returns
Radico Khaitan Ltd’s stock is currently trading at ₹2,075 per share, reflecting a 1.3% increase from its previous close of ₹2,048. However, it is 22% below its 52-week high of ₹2,638 per share, presenting an attractive entry point for investors.
The stock has delivered stellar returns over the years:
| Time Period | Return (%) |
|---|---|
| 1-Year | 27% |
| 3-Year | 130% |
| 5-Year | 386.4% |
These returns indicate strong long-term growth potential, making it an appealing choice for investors.
Expansion in Luxury & Semi-Luxury Segments
Radico Khaitan has been aggressively expanding its luxury portfolio. Key highlights include:
- Rampur Indian Single Malt Asava is now available in 10 states.
- Sangam World Malt is expanding in 8 states.
- Jaisalmer Gold Gin is available in 6 states.
The company is focusing on increasing distribution channels for these premium products, both in India and internationally.
Portfolio Performance
The luxury and semi-luxury brands have seen robust sales:
- Q3 FY25 luxury segment net sales: ₹100 crore
- 9M FY25 luxury segment net sales: ₹250 crore
- FY26 target: ₹500 crore
With growing demand for premium alcoholic beverages, Radico Khaitan is positioned well for sustained profitability.
Market Performance & Growth Factors
Radico Khaitan has seen a strong recovery in its regular category due to the normalization of state-specific industry challenges. A key driver of this growth has been the revised route-to-market strategy in Andhra Pradesh, contributing to an 800 basis points increase in overall volume growth.
Andhra Pradesh market share growth:
| Period | Market Share (%) |
|---|---|
| H1 FY25 | 10% |
| Q3 FY25 | 15% |
This rapid gain in market share highlights Radico Khaitan’s ability to capitalize on favorable industry conditions.
Future Outlook & Margin Expansion
The company is optimistic about its future, supported by:
- Strong product pipeline
- Brand-building strategies
- Improved working capital management
- Focus on reducing debt
The management has also provided margin guidance, expecting an improvement of 100-125 basis points annually over the next three years, driven by a shift towards high-margin luxury products.
Financial Performance
Radico Khaitan’s financials have remained strong, reflecting its robust business strategy.
| Financial Metric | Q3 FY24 | Q3 FY25 | YoY Growth (%) |
|---|---|---|---|
| Revenue from Operations | ₹1,161 Cr. | ₹1,294 Cr. | 11.5% |
| Net Profit | ₹75 Cr. | ₹95 Cr. | 27% |
| IMFL Volume | 7.3 Mn cases | 8.4 Mn cases | 15.3% |
With consistent revenue and profit growth, Radico Khaitan remains a fundamentally strong investment choice.
Key Financial Ratios
Here’s a look at Radico Khaitan’s key financial indicators:
| Metric | Value |
|---|---|
| Market Cap | ₹27,722 Cr. |
| Stock P/E | 89.1 |
| Dividend Yield | 0.14% |
| ROCE | 13.2% |
| ROE | 11.3% |
| Debt to Equity | 0.36 |
| Price to Earning (P/E) | 89.1 |
| EPS | ₹23.3 |
| Promoter Holding | 40.2% |
| QoQ Profit Growth | 16.8% |
| Industry P/E | 31.4 |
| RSI | 45.4 |
| 200 DMA | ₹2,080 |
While the stock’s P/E ratio of 89.1 indicates a premium valuation, the company’s strong earnings growth and market positioning justify its pricing.
Should You Add Radico Khaitan to Your Watchlist?
With Mukul Agrawal holding a 1.05% stake, strong financials, a 22% discount from its 52-week high, and aggressive expansion in high-margin segments, Radico Khaitan presents a compelling investment opportunity.
However, investors should remain cautious of potential risks such as:
- Inflation in raw materials (e.g., food grains) impacting gross margins
- Regulatory changes in key states
- High valuation compared to industry peers
For long-term investors looking at the booming alcoholic beverage sector, Radico Khaitan is a stock worth considering. The next few quarters will be crucial in determining how well it capitalizes on its growth initiatives.
Final Thoughts
Radico Khaitan’s strong brand portfolio, increasing market share, and growing demand for premium liquor make it a top contender in the Indian spirits industry. With a focus on luxury products and international expansion, the company is well-positioned for future growth.
If you’re looking for a stock with solid fundamentals and strong long-term potential, Radico Khaitan Ltd is definitely worth keeping on your watchlist.
For more market insights, follow our news.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.