Range
Stop Loss
Target
Radico Khaitan (NSE Cash) - BUY
121 - 123
109
145
Weekly Chart
Technical Evidences
After the sharp rally from
`83.10
to
`150.40, the stock has seen a decent
correction. The corrective move has taken
support around the 61.80% retracement
levels of the mentioned rally, which
coincides with the ‘Trend line’ support on
weekly chart.
The stock is consolidating in a narrow
range around the ‘89 EMA’ on daily chart
and today we are witnessing a breakout
from the consolidation phase.
The ‘Stochastic’ oscillator is giving positive
crossover with its average from oversold
territory on weekly chart, indicating a
possibility of reversal in the counter.
Considering the above technical evidences,
we expect a healthy move in the upward
direction.
Thus, the stock can be bought from current
level to a decline up to `121 for a target of
`145 in coming three months. A stop loss
can be placed at ` 109.
Source: Falcon ( Chart time: 09:50 IST on 14/12/2016 )
December 14, 2016
Stock Info
Radico Khaitan
Higher proportion of premium products in volume mix to drive profitability: In the IMFL
Sector
Breweries & Distilleries
segment, more than 20% of the company’s volumes come from prestige and above
products, which is a high margin business, and the balance volumes come from regular
Market cap
1,641
and others brands. Since the last eight years, the company’s prestige and above brands’
volume has reported a CAGR of ~23% and their share in the product mix has increased
from 7.9% in FY2009 to 24% in FY2016. We expect volume contribution of prestige and
Beta
0.8
above products in the IMFL segment to increase further on back of higher ad spend. The
company has roped in celebrity Hrithik Roshan as its brand ambassador. Also, the
52 week high/low
151/81
company’s presence in the prestige Vodka segment is under penetrated which leaves scope
for growth. Thus, this would improve the overall margin for the company and result in
higher profitability.
Avg. Daily Volume
2,81,109
Strong show in Q2FY17: For 2QFY2017, Radico Khaitan reported results above our
Face Value (`)
2.0
estimates both on top-line and bottom-line front. The company’s top-line grew by
~11% yoy to `447cr on back of higher sales of premium products, while the bottom-line
grew by ~27% yoy to `22cr on the back of improvement in volume and healthy operating
performance.
Shareholding Pattern (%)
Outlook and Valuation: Going forward, we believe that the company has the potential to
perform better on the bottom-line front on the back of (a) volume growth, (b) higher sales
of premium products, (c) anticipation of better price hikes, and (d) gradual reduction in
Promoters
40.5
debt, which should lead to significant savings in interest costs. Looking at the growth
visibility the valuations looks attractive.
MF / Banks / Indian Fls
13.3
Company
Sales
OPM PAT EPS Adj. ROE P/E P/BV EV/EBITDA EV/Sales
(` cr)
(%)
(` cr)
(`)
(%)
(x)
(x)
(x)
(x)
FII / NRIs / OCBs
21.1
FY2017E
1,667
13.0
88
6.6
22.3
9.0
1.7
10.4
1.4
Indian Public / Others
25.1
FY2018E
1,824
13.2
109
8.2
25.0
10.2
1.5
9.2
1.2
December 14, 2016
Research Team Tel: 022 - 3935 7600
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 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/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.
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. Investors are advised to refer the Fundamental and Technical Research Reports available on our
website to evaluate the contrary view, if any.
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.
Disclosure of Interest Statement
Radico Khaitan
1. Financial interest of research analyst or Angel or his Associate or his relative
No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives
No
3. Served as an officer, director or employee of the company covered under Research
No
4. Broking relationship with company covered under Research
No
December 14, 2016
