RADICO

Radico Khaitan is one of the oldest and largest manufacturers of Indian Made Foreign Liquor (IMFL) with net revenue of INR48b and volume of 31m cases in FY25 (P&A was ~15mn cases). The company, formerly known as Rampur Distillery Company, commenced operations in 1943 as a major bulk spirits supplier. Radico is known for its brands: 8PM, Magic Moments, Royal Ranthambore, Rampur Single Malt, After Dark, Morpheus, Contessa and Jaisalmer. The company has upgraded its brand image and has successfully entered into the luxury segment by introducing brands like Rampur, Ranthambore, and Jaisalmer. It has a wide product range in whiskey, vodka, gin, rum, and brandy with a price range of ~ INR500 to more than INR8000 for a bottle, covering a large consumer base. Consumer acceptance for its premium brands over the years reflects Radico’s long-term brand upgrade story. Radico can further capitalize on this success by adding more brands to fill the white spaces to attract consumer segments that have higher volumes. Radico holds ~8% share in the Prestige & Above (P&A) category in the IMFL industry. For Radico, vodka accounts for ~50% of its P&A portfolio, with an >80% share in the P&A vodka industry. Besides, the company has significantly scaled up its P&A whiskey portfolio (contributes ~5mn cases), though from the industry point of view, it is still small with a 3% share. Outlook We estimate 16% revenue CAGR during FY25-28E and EBITDA margin of 16.2% by FY28 (similar to FY19). We believe a ~30% EPS CAGR is good enough for sustaining rich valuations. We value Radico at 60x P/E on Jun’27E EPS to derive a TP of INR3,000.