CMP: 421.15 JAN 24th, 2019 RADICO KHAITAN LTD ISIN: Overweight Result Update (PARENT BASIS): Q3 FY19 INE944F01028 Index Details SYNOPSIS Stock Data Radico Khaitan Limited (Radico Khaitan) is among Sector Breweries & Distilleries the oldest and one of the largest manufacturers of BSE Code 532497 Indian Made Foreign Liquor (IMFL) in India. Face Value 2.00 52wk. High / Low (Rs.) 500.00/297.90 The company achieved a turnover of Rs. 20583.69 Volume (2wk. Avg.) 70000 million for Q3 FY 2018-19 as against Rs. 17417.84 Market Cap (Rs. in mn.) 56142.45 million in the corresponding quarter of the previous year, up by 18.18%. Annual Estimated Results(A*: Actual / E*: Estimated) During the quarter, EBIDTA stood at Rs. 989.57 Years (Rs. in mn) FY18A FY19E FY20E million as against Rs. 817.41 million in the Net Sales 62703.64 80351.92 100439.90 corresponding period of the previous year, up by EBITDA 2964.24 3819.79 4622.33 21.06%. Net Profit 1234.53 1978.97 2537.82 Profit before tax (PBT) increased by 47.16% to Rs. EPS 9.26 14.85 19.04 802.37 million in Q3 FY19 as compared to Rs. P/E 45.48 28.37 22.12 545.24 million in the corresponding quarter of the previous year. Shareholding Pattern (%) During the 3rd quarter, net profit increased by As on Dec 2018 As on Sep 2018 48.79% to Rs. 520.98 million from Rs. 350.14 Promoter 40.38 40.38 million in the corresponding quarter ending of previous year. Public 59.62 59.62 EPS of the company stood at Rs. 3.91 in Q3 FY19 -- -- Others against Rs. 2.63 in the corresponding quarter of the previous year. 1 Year Comparative Graph Revenue of the company for 9M FY19 registered a growth of 31.93% at Rs. 60797.41 million as against Rs. 46081.35 million in 9M FY18. During 9M FY19, PAT of the company rose by 66.86% at Rs. 1490.12 million as compared to Rs. 893.03 million in 9M FY18. Net Sales and PAT of the company are expected to grow at a CAGR of 24% and 36% over 2017 to 2020E, respectively. RADICO KHAITAN LTD S&P BSE SENSEX PEER GROUPS CMP MARKET CAP EPS(TTM) P/E (X)(TTM) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%) Radico Khaitan Ltd 421.15 56142.45 13.74 30.65 4.92 50.00 Som Distilleries and Breweries Ltd 148.25 4626.10 8.31 17.84 2.81 15.00 Pincon Spirit Ltd 7.17 342.70 10.35 0.69 0.23 7.50 GM Breweries Ltd 538.50 9842.50 45.41 11.86 3.38 30.00 Document code: FOTL_240120195_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved QUARTERLY HIGHLIGHTS (PARENT BASIS) Results updates- Q3 FY19, (Rs. in mn) Dec-18 Dec-17 % Change Revenue 20583.69 17417.84 18.18% PAT 520.98 350.14 48.79% EPS 3.91 2.63 48.75% EBIDTA 989.57 817.41 21.06% The company’s net profit stood at Rs. 520.98 million as compared to Rs. 350.14 million in the corresponding quarter ending of previous year, higher by 48.79%. Revenue for the 3rd quarter rose by 18.18% to Rs. 20583.69 million from Rs. 17417.84 million in the corresponding quarter ending of previous year. Reported earnings per share of the company stood at Rs. 3.91 a share in Q3 FY19 against Rs. 2.63 in the corresponding quarter of the previous year. Profit before interest, depreciation and tax is Rs. 989.57 million as against Rs. 817.41 million in the corresponding period of the previous year. Break up of Expenditure, Value in Rs. Million Break up of Expenditure Q3 % Q3 FY18 FY19 Chng Cost of Materials 2797.28 2285.47 22% Consumed Purchase of Stock in 2.94 143.83 -98% Trade Excise Duty on Sales 15054.37 12592.59 20% Employees Benefit 432.69 404.70 7% Expense Depreciation, 108.85 103.13 6% Amortisation & Expenses Selling & Distribution 723.19 591.13 22% Other Expenses 630.48 583.45 8% Document code: FOTL_240120195_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved COMPANY PROFILE Radico Khaitan Limited (Radico Khaitan) is among the oldest and one of the largest manufacturers of Indian Made Foreign Liquor (IMFL) in India. Earlier known as Rampur Distillery, Radico Khaitan commenced its operations in 1943 and over the years emerged as a major bulk spirits supplier and bottler to other spirit manufacturers. Driven by the vision of the promoters, in 1998 the Company started its own brands with the introduction of 8PM Whisky. Radico Khaitan is one of the few companies in India to have developed its entire brand portfolio organically. This is a true testament to the Company’s R&D strength and understanding of customer preferences. The Company’s brand portfolio includes After Dark Whisky, Contessa Rum, Magic Moments Vodka, Morpheus Brandy, Old Admiral Brandy and 8PM Whisky. Currently, the Company has four millionaire brands which are 8PM Whisky, Contessa Rum, Old Admiral Brandy and Magic Moments Vodka. Each of these brands sell more than a million cases per year. Over the years Radico Khaitan has been focusing on the premiumisation of its portfolio. The Company has launched six new brands in the past five years, all of which are in the premium category. Radico Khaitan is also one of the largest providers of branded IMFL to the Canteen Stores Department (CSD), which has significant business barriers to entry. The Company has three distilleries in Rampur, Uttar Pradesh and one in Aurangabad, Maharashtra which is a 36% joint venture. The Company has a total owned capacity of 157 million litres and operates 28 contract bottling units spread across the country. Document code: FOTL_240120195_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions) Balance Sheet as of March 31, 2017 -2020E FY17A FY18A FY19E FY20E ASSETS 1) Non-Current Assets a) Property, plant and equipment 6828.72 6676.91 7010.75 7501.51 b) Capital Work in Progress 22.01 201.91 302.86 448.23 c) Intangible assets 209.48 178.01 163.77 157.22 d) Financial Assets i) Investments in a joint venture 1553.85 1553.85 1631.55 1729.44 ii) Investments in others 0.06 0.06 0.06 0.07 iii) Loans 633.02 290.13 246.61 221.95 iv) Others 9.18 21.75 27.84 34.80 e) Other non -current assets 1306.63 999.53 899.58 854.60 Sub Total Non- Current Assets 10562.96 9922.15 10283.02 10947.81 2) Current Assets a) Inventories 2930.33 3108.57 3264.00 3459.84 b) Financial Assets i) Investments 500.00 500.00 525.00 556.50 ii) Trade receivables 6240.11 6300.11 6615.11 7078.17 iii) Cash and Bank balances 81.11 167.65 251.48 372.19 iv) Other Bank balances 59.57 55.89 58.69 61.03 v) Loans 587.42 544.92 517.67 502.14 vi) Other 203.53 250.84 298.50 349.24 c) Current tax assets (Net) 41.35 0.23 0.16 0.12 d) Other current assets 995.43 1461.22 2074.94 2884.16 Sub - Total Current Assets 11638.85 12389.43 13605.55 15263.40 Total Assets (1+2) 22201.81 22311.58 23888.57 26211.21 EQUITY AND LIABILITIES 1) EQUITY a) Equity Share Capital 266.08 266.62 266.62 266.62 b) Other equity 10032.79 11154.58 13133.55 15671.37 Total Equity 10298.87 11421.20 13400.17 15937.99 2) Non Current Liabilities a) Financial Liabilities i) Borrowings 1033.08 343.98 275.18 233.91 ii) Other 6.00 6.82 7.50 8.10 b) Provisions 83.71 98.06 111.79 125.20 c) Deferred Tax Liabilities (net) 692.62 925.24 1031.81 1134.99 d) Other non -current liabilities 1.91 3.52 4.39 5.27 Sub - Total Non Current Liabilities 1817.31 1377.61 1430.68 1507.47 3) Current Liabilities a) Financial Liabilities i) Borrowings 5509.15 4878.01 4438.99 4172.65 ii) Trade payables 1853.28 2141.35 2269.83 2287.01 iii) Others 1553.89 835.29 517.88 336.62 b) Other Current Liabilities 767.09 842.43 892.97 937.62 c) Provisions 402.22 815.69 938.05 1031.85 Sub - Total Current Liabilities 10085.63 9512.77 9057.72 8765.75 Total Equity and Liabilities (1+2+3) 22201.81 22311.58 23888.57 26211.21 Document code: FOTL_240120195_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved Annual Profit & Loss Statement for the period of 2017 to 2020E Value(Rs.in.mn) FY17A FY18A FY19E FY20E Description 12m 12m 12m 12m Net Sales 48679.55 62703.64 80351.92 100439.90 Other Income 196.47 266.70 129.45 152.75 Total Income 48876.01 62970.35 80481.37 100592.65 Expenditure -46566.63 -60006.11 -76661.58 -95970.33 Operating Profit 2309.38 2964.24 3819.79 4622.33 Interest -803.84 -682.44 -353.97 -290.25 Gross profit 1505.54 2281.80 3465.82 4332.07 Depreciation -417.03 -409.00 -432.02 -462.27 Profit Before Tax 1088.51 1872.80 3033.80 3869.81 Tax -287.81 -638.26 -1054.82 -1331.99 Net Profit 800.70 1234.53 1978.97 2537.82 Equity capital 266.08 266.62 266.62 266.62 Reserves 10032.79 11154.58 13133.55 15671.37 Face value 2.00 2.00 2.00 2.00 EPS 6.02 9.26 14.85 19.04 Quarterly Profit & Loss Statement for the period of 30th June, 2018 to 31st Mar, 2019E Value(Rs.in.mn) 30-Jun-18 30-Sep-18 31-Dec-18 31-Mar-19E Description 3m 3m 3m 3m Net sales 21152.76 19060.96 20583.69 19554.51 Other income 27.34 42.06 27.55 32.50 Total Income 21180.10 19103.02 20611.24 19587.01 Expenditure -20240.93 -18143.99 -19621.66 -18655.00 Operating profit 939.17 959.03 989.57 932.01 Interest -109.55 -91.63 -78.35 -74.43 Gross profit 829.62 867.40 911.22 857.58 Depreciation -101.44 -107.44 -108.85 -114.30 Profit Before Tax 728.18 759.96 802.37 743.28 Tax -254.45 -264.55 -281.39 -254.43 Net Profit 473.73 495.41 520.98 488.86 Equity capital 266.62 266.62 266.62 266.62 Face value 2.00 2.00 2.00 2.00 EPS 3.55 3.72 3.91 3.67 Document code: FOTL_240120195_3 Copyright © 2016 Firstobject Technologies Ltd.