Liquor maker Radico Khaitan have outperformed by turning into a multibagger stock for 2021

12 Aug , 2021 By : Kanchan Joshi

Shares of Liquor maker Radico Khaitan have outperformed by turning into a multibagger stock for 2021. Radico shares have rallied over 100% this year (year-to-date to YTD), doubling investors' money since the start of the year. From Rs450 level in the start of the year, the stock currently trades over Rs930, giving multibagger returns.

Radico Khaitan (earlier Rampur Distillery Company) is among the largest manufacturers of Indian made foreign liquor (IMFL) in India. The company is also a supplier of Indian made Indian liquor (IMIL) and bulk alcohol in India. Radico has 60% market share in vodka, 60% market share in super premium brandy, 30% market share in rum and 6% market share in whisky.

The stock was trading nearly 5% higher at Rs930 per share in Thursday's session on the BSE after reports suggested that Goldman Sachs has initiated coverage on Radico Khaitan with a Buy rating.

The company's Q1FY22 results beat industry by a wide margin. Radico Khaitan's Q1 consolidated net profit rose over 35% to Rs60.87 crore for the first quarter ended June 2021, helped by volume growth and a lower base of the pandemic hit corresponding quarter. Its sales volume of total Indian-made foreign liquor (IMFL) was up 58.8% during the quarter to 5.61 million cases.

"Despite state-level lockdowns and supply chain challenges posed by COVID-19 in Q1 FY2022, we delivered a strong all-round performance. As restrictions are lifted and normalcy resumes, month-on-month volumes indicate a positive trend and we are confident of an improved industry performance, led by the Prestige & Above segment, in the coming quarters," Radico Khaitan Managing Director Abhishek Khaitan had said.

ICICI Direct in a result note on Radico Khaitan onJuly 30 had said that the Uttar Pradesh government has stated a vision of increasing excise revenues from current Rs32000 crore to Rs50000 crore in three years. Radico has 30% market share in UP and is expected to reap benefits due to the targeted sales by the state government (led by increased distribution).