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Radico Khaitan Q1 PAT decline 3% YoY to Rs 58 cr

11-Aug-22 13:01 Hrs IST

Total Indian Made Foreign Liquor (IMFL) volume growth was 21.5% year on year (YoY) led by Prestige & Above category volume growth of 29.1%. Prestige & Above net revenue growth stood at 37% compared to Q1 FY22. IMFL sales value accounted for 78.9% (versus 78.3% in Q1 FY22) of the net revenue from operations.

The company reported a marginal decrease in profit before tax to Rs 77.19 crore in Q1 FY23 from Rs 77.62 posted in Q1 FY22. EBITDA stood at Rs 92.1 crore in Q1 FY23, up 0.4% from Rs 91.7 crore recorded in Q1 FY22. EBITDA margin slipped to 12.2% in Q1 FY23 as compared to 15.3% in Q1 FY22.

Total expenses jumped 10.83% YoY to Rs 3,110.98 crore in Q1 FY23. Cost of goods sold surged 35.2% YoY to Rs 427.5 crore in the quarter ended 30 June 2022.

Finance Cost decreased by 35.8% to Rs 2.97 crore from Rs 4.63 crore reported in Q1 FY22. The company said that its cost of borrowing continues to be one of the lowest in the industry due to a stable profitability, strong capital structure and improved liquidity position.

Gross margin during the quarter was 43.6% compared to 42.7% in Q4 FY22 and 47.1% in Q1 FY22. On YoY basis, continued commodity inflation resulted in gross margins compression, particularly in the non-IMFL business. Given a favorable product mix change, impact of cost push on the gross margin of the IMFL business was mitigated to a large extent. On a sequential basis, gross margins improved due to price increases in the IMFL business and a favorable product mix.

The company's net debt stood at Rs 163 crore, an increase of Rs 47 crore after Capex on new projects of Rs 95 crore since March 2022.

The company said its strategy is to continue to make prudent marketing investments over existing core brands and new launches to sustain the growth and market share. During Q1 FY23, A&SP as % of IMFL sales was 6.1% as compared to 6.6% in Q1 FY22. On a quarterly basis, the amount may vary but we expect to maintain A&SP to be around 7% to 8% of our IMFL revenues to be able to drive the sales momentum.

Commenting on the results and performance, Dr. Lalit Khaitan, chairman & managing director, said, “Radico Khaitan continues to demonstrate agility and resilience to deliver a consistent topline growth led by the Prestige & Above category brands in this challenging environment which is also a reflection our team's execution capabilities. While there are near term concerns around inflation, the recent softening of certain commodities, a normal monsoon and the policy measures undertaken by the government bode well for the industry.”

He further added, “Our endeavor continues to be on strengthening our premium brand portfolio through focused go-to-market strategies. Overall, we expect the inflationary environment to gradually ease out to some extent in the second half of the year. We are focused on driving premium growth, execution of our new projects and working towards making Radico Khaitan a future ready organization.”

Abhishek Khaitan, managing director, said, “We are very pleased with the progress of our premium portfolio. Our luxury brands are showing robust momentum as we continue to expand outreach both in domestic as well as international markets. With the 'out-of-home' consumption picking up, white spirits brands have seen strong traction, which coupled with our diligent marketing investment has returned desired results. Looking at the growing demand of Jaisalmer Indian Craft Gin, we are expanding our gin distillation capacity which is already a part of our earlier announced capex plan. Overall, our growth is broad based and has a healthy underlying product and price mix. To mitigate the inflationary pressure, Radico Khaitan has taken a number of steps including rationalization of portfolio and value engineering across the supply chain. We continue to manage business with agility driving savings across the value chain to navigate through these challenging times.”

Shares of Radico Khaitan were up 2.54% to Rs 937.85 on the BSE. Radico Khaitan is one of the oldest and the largest manufacturers of Indian Made Foreign Liquor (IMFL) in India.