Radico Khaitan (Q2 FY13)

India Infoline News Service | Mumbai |

Radico Khaitan (Q2 FY13)

CMP Rs122, Target Rs140, Upside 14% 
  • Radico Khaitan posted steady ~14% yoy revenue rise driven by ~20% yoy jump in premium brands-Magic Moments vodka (+16.7% yoy) and Morpheus brandy (+36% yoy); overall volume grew 7.8% yoy while premium brand share of total volumes continues its upward march to 16% from 14.5% a year ago

  • Higher selling & distribution expenses (up 245bps yoy) weighed on margin which declined 48bps yoy though decline in traded goods & adjusted RM costs mitigated the impact

  • Lower interest costs yoy and higher other income led to 49% yoy rise in reported PAT which also included ~Rs13mn in FX gain

  • H1 FY13 revenues and PAT account for 47%/52% of our full year forecasts and we retain our estimates and BUY recommendation for a revised 9-mth target of Rs140 (earlier Rs130)  

Results table (consolidated)
(Rs m) Q2 FY13 Q2 FY12 % yoy H1 FY13 % yoy
Net sales 2,970 2,607 13.9 6,009 7.6
Raw materials (1,234) (1,092) 13.0 (2,370) 5.9
Purch. of traded goods (112) (170) (34.1) (250) (51.0)
Staff costs (196) (177) 11.0 (383) 11.1
Selling & Distribution (527) (399) 32.2 (1,213) 30.2
Other expenditure (410) (326) 25.6 (778) 13.1
Operating profit 491 444 10.7 1,016 16.5
OPM (%) 16.5 17.0 (48) bps 16.9 128 bps
Depreciation (85) (75) 13.3 (175) 18.6
Interest (159) (196) (18.6) (369) 21.0
Other income 84 53 58.5 145 73.7
PBT 331 226 46.5 617 22.6
Tax (110) (78) 41.6 (185) 25.3
Effective tax rate (%) 33.3 34.4 (117) bps 30.0 63 bps
PAT 221 148 49.1 432 21.5
PAT margin (%) 7.4 5.7 175 bps 7.2 82 bps
Source: Company, India Infoline Research
 
Volume highlights
mn cases Q2 FY13 Q2 FY12 % yoy H1 FY13 % yoy
Magic Moments 0.60 0.52 16.7 1.33 17.3
Morpheus Brandy 0.12 0.09 36.3 0.23 42.2
Premium brands 0.73 0.61 19.6 1.56 20.4
Other main line brands 2.62 2.45 6.7 5.61 7.4
Total main line brands 3.34 3.06 9.3 7.17 10.0
Other brands 1.15 1.11 3.8 2.48 2.8
Total 4.49 4.17 7.8 9.64 8.0
Source: Company, India Infoline Research
 
Financial summary
Y/e 31 March  (Rs m) FY11 FY12E FY13E FY14E
Revenues 9,965 11,439 12,724 14,316
yoy growth (%) 19.3 14.8 11.2 12.5
Operating profit 1,490 1,721
 

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