Radico Khaitan, incorporated in year 1943 is one of the most recognized IMFL (Indian Made Foreign Liquor) brands in India. The company was initially known as Rampur Distillery Company and was focused on distillation and bottling for branded players and canteen stores of armed forces. Later in the year 1997, Radico Khaitan ventured into its own branded IMFL products and launched its first brand 8PM whisky which became its millionaire brand within a year of its launch. It has mainly 4 divisions which are Rampur Distillery, Bottling Units and PET division. Rampur Distillery is one of the largest and the most efficiently-run distilleries in India, spread over 100 acres of lush green campus with a high level of security systems. Radico Khaitan is one of the largest providers of branded IMFL to the Canteen Stores Department (CSD), which has significant business barriers to entry. The distillery produces high-grade Extra Neutral Alcohol (“ENA”) from molasses, grains, and Scottish design malt spirit from barley malt. It has an overall alcohol production capacity of 102.46 million liters per annum, including 2.6 million liters for Malt Spirit, 33 million liters for Grain ENA and 66.86 million liters for Molasses ENA. Under Bottling unit company has 28 bottling units spanning across the entire country, of which 5 are owned and 23 contracts bottling units. Under Company owned units, Radico Khaitan has 14 state-of-the-art bottling lines – including those imported from Italy – equipped with tunnel bottle washing, filling, sealing and labeling machines with a capacity to produce 1,500 cases (1 case = 12 bottles of 750 ml each) of liquor in a single shift of operation. Under PET Bottles division, company has ability to produce PET bottles & containers for Packaging, Food & Beverages, Health & Beauty Care and Pharmaceuticals.

Company’s Domestic brand portfolio includes Jaisalmer, Royal Ranthambore and Magic Moments Dazzle under premium brands, Royal Ranthambore, 8PM and After Dark under Whisky, 1965, 8PM Bermuda and Contessa in RUM and Various flavors of VODKA under Magic moments. Its International brand portfolio includes Rampur select, Jaisalmer and Rampur PX under premium brands, 8PM, After Dark, Regal Talons and Whytehall under Whisky, AFRI BULL and various flavors of Contessa under RUM segment and Morpheius and Old Admiral under Brandy and Various flavors of Magic moments under VODKA. Company also has a dedicated portfolio for Defence personnels which includes Whytehall, 8PM and After Dark in Whisky segment, 1965, 8PM Bermuda, Contessa and Tropicana in RUM segment, Morpheius, Napoleon and Old Admiral under Brandy segment, Magic Moments in VODKA segment and Carlo Rossie in WINE segment. Some of the top brands of Radico Khaitan are leading brands globally such as Magic Moments Vodka became the 5^th Fastest growing Vodka and 6^th Largest Vodka brand globally, 8PM Premium Black Whisky became 4^th Fastest growing Whisky, Morpheus Brandy became 5^th Fastest growing Brandy and 9^th Largest Brandy brand, 1965 Spirit of Victory Rum became 1^st Fastest growing Rum and 9^th Largest Rum brand, 8PM Whisky also became 10th Largest Whisky brand, Contessa Rum became 8^th Largest Rum brand and Old Admiral Brandy became the 4^th Largest Brandy brand. Company’s Magic Moments brand leads the vodka Industry in India with over 60% market share whereas Morphues Brandy leads the premium brandy category with over 64% market share and have 50% market share in luxury gin market.

Company’s Rampur Indian Single Malt Whisk has Eight expressions (Select, PX Sherry, Signature Reserve, Double Cask, Asava, Trigun, Jugalbandi, Barrel Blush) which are available in around 50 countries and 35 travel retail. Rampur Double Cask available in 15 states in India and Asava in 10 states. Its Jaisalmer Indian Craft Gin Contains 11 botanicals/herbs, out of which 7 are from all parts of India and it is available in around 40 countries and 25+ travel retail; 22 states in India and have 50% market share of the luxury gin market. Company has also introduced 180ML pocket pack under magic moments brand.

Fundamentals:

Financial Results:

Company’s Revenue from Operations (Net) was Rs. 1,116.3 Cr (+20.7%) in Q2FY25 and 2,252.8 Cr (+19.9%) as per H1FY25. Its gross profit was Rs. 487.0 Cr (+19.3%) at 43.6% margin in Q2FY25 and 953.5 Cr (+15.7%) at 42.3% margin as per H1FY25. Company’s EBITDA was Rs. 162.4 Cr (+34.7%) at 14.5% margin in Q2Fy25 and Rs. 310.6 Cr (+29.7%) at 13.8% margin as per H1Fy25. Its Total Comprehensive Income grew by 33% reaching Rs. 81.6 Cr in Q2Fy25 and Rs. 157.4 Cr with +26.7% growth in H1Fy25.

Company’s Total IMFL volume reached 6.78 million Cases (-2.5%) in Q2Fy25 while its Prestige & Above brands volume marked 12.6% growth and reached 3.20 million Cases. Prestige & Above brands contributed 75.7% in Q2Fy25 to the Total IMFL sales value of compared to 70.0% in previous quarter.

Key Updates:

1. Radico Khaitan Limited, one of the largest IMFL companies in India officially unveiled Rampur’s newest expression of Indian Single Malt Whisky. The Rampur Barrel Blush, proudly crafted in India, is a distinguished single malt whisky that captures the essence of tradition and expert craftsmanship.
2. Radico Khaitan Limited recently bagged dual awards at the prestigious 2024 Just Drinks Excellence Awards, again demonstrating its exceptional quality and innovation, reinforcing India’s reputation for producing world-class spirits that command respect and admiration internationally.
3. The company debuts the next two whiskies in the Rampur Jugalbandi series of eight Indian Single Malt whiskies, Rampur Jugalbandi #5 and #6, at The Whisky Show. The two new whiskies are produced at Rampur Distillery in the foothills of the Himalayas in India and matured in casks personally selected by Master Distiller, Anup Barik. The Rampur Jugalbandi series is a limited-edition release at cask strength and been rolled out to the UK, USA, EU, Singapore and Global Travel Retail.
4. Magic Moments, the fourth largest vodka brand in the world recently partnered with Saregama, India’s leading music label to launch an innovative new music series titled ‘Magic Moments Music Studio’. to celebrate the diversity of musical talent across genres and generations.
5. Company has recently introduced the award-winning Sangam World Malt Whisky to the Indian market. Whisky enthusiasts across the country eagerly awaited the debut of this celebrated whisky, renowned for its outstanding quality and numerous prestigious awards.
6. Company has also introduced Rampur Asava Indian Single Malt Whisky to India, after garnering widespread acclaim in major markets worldwide, including the UK, USA, Europe, Dubai, as well as Global Travel Retail. Initially it started with Uttar Pradesh where Rampur Asava Indian Single Malt Whisky is priced at Rs. 10000 and then it will expand the launch in other prominent states such as Delhi, Chandigarh, Punjab, Uttarakhand, Haryana, Telangana, and Goa throughout the fiscal year, including introduction in the CSD (Canteen Store Department).
7. Radico Khaitan’s Rampur Jugalbandi #3 has also been awarded Best World Whisky and Jaisalmer Gold Indian Craft Gin has been awarded Best Gin at the prestigious John Barleycorn Awards 2024 with 94 points each, in addition to the Double Gold medals. Other luxury brands of Radico Khaitan were also awarded top medals with Rampur Jugalbandi #4 and Jaisalmer Indian Craft Gin awarded wioth Double Gold medals, and Rampur Asava and Rampur Double Cask Indian Single Malt Whiskies and Sangam World Malt Whisky were awarded with gold medals.
8. Company has also launched Jaisalmer Indian Craft Gin ‘Gold Edition’, marking a new pinnacle of luxury and sophistication in the Indian gin market. This latest addition to the brand's portfolio promises to further elevate the gin experience for the gin enthusiasts.

In last 3 Years the stock gave a return of 111.52% as compared to the rise of Sensex and Nifty in the same period.

India's liquor industry is expected to grow in the coming years, with several factors contributing to this growth such as Rising demand for spirits like vodka, whisky, and rum remains high in India, Young population with 33% of Indians in the legal drinking age, more and more companies are investing in distilleries, breweries, and manufacturing infrastructure and India's demographic dividend is predicted to last at least 30 years, creating an ideal environment for the liquor market. Over all The Indian alcohol market is expected to grow from $35.14 billion in 2023 to $58.1 billion by 2032. The spirits segment is anticipated to total a valuation of US$ 50,552.1 million by 2034, Premium-and-above blended Scotch is Predicted to grow at a CAGR of +13% between 2022 and 2027 and Premium-plus malt Scotch is predicted to grow at a CAGR of +19%. So over all we can say that India’s Alcohol market is in a Fastrack mode and Radico Khaitan is well poised to hop on this FastTrack train journey. Investors can invest in this company for long term period.

HET ZAVERI

info@smartinvestment.in

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