Strong Q1 performance lifts Radico Khaitan higher

Radico Khaitan gained 2.26% to Rs 844.8 after the liquor maker posted a 35.7% jump in consolidated net profit to Rs 59.83 crore on a 47.3% rise in net sales to Rs 602.76 crore in Q1 FY22 over Q1 FY21

Radico Khaitan's total IMFL volume growth was 58.8% year on year. IMFL sales value accounted for 77.7% of total revenue from operations as compared to 73.2% in Q1 FY21. The liquor maker's consolidated profit before tax stood at Rs 77.62 crore in Q1 FY22, 33.3% higher than Rs 58.22 crore posted in Q1 FY21.

Consolidated EBITDA grew by nearly 22% to Rs 91.72 crore in Q1 FY22 over Q1 FY21. Gross Margin contracted to 47.5% in Q1 FY22 from 54.6% in Q1 FY21. Radico said year on year margins are not comparable due to an abnormal base quarter. On a quarter on quarter basis, Gross Margin contracted by 87 basis points due to an unfavourable product mix which was impacted by COVID induced lock downs and scattered market timings. Despite Gross Margin contraction, EBITDA margin expanded by 54 bps from 14.7% in Q4 FY21 to 15.2% in Q1 FY22.

During Q1 FY22, Advertising & Sales Promotion (A&SP) expenses increased by 70.5% to Rs 33.48 crore. As a percentage of IMFL sales, A&SP expenses were 7.2% in Q1 FY22 compared to 7.3% for the full year FY21. The company said it continues to invest behind brand building to support strategic growth and market share expansion initiatives.

Finance Cost decreased by 29.5% year on year to Rs 4.63 crore in Q1 FY22 from Rs 6.57 crore in Q1 FY21. The company's cost of borrowing is one of the lowest in the industry due to a lower interest environment, stable profitability, strong capital structure and improved liquidity position. As of 30 June 2021, net Debt was at Rs 183.89 crore versus Rs 197.54 crore as of 31 March 2021.

Commenting on the results and performance, Abhishek Khaitan, MD of the company said, Despite state level lock downs and supply chain challenges posed by COVID-19 in Q1 FY22, 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 Prestige & Above segment, in the coming quarters. I am pleased to report that after a solid performance last year, Radico Khaitan became the largest IMFL exporter out of India during Q1 FY22. Radico Khaitan is focused on further strengthening its premium products portfolio through new launches in the coming quarters and ongoing marketing investments. We are progressing well on our strategic growth agenda which will create long term shareholders value.

Radico Khaitan is one of the oldest and the largest manufacturers of Indian Made Foreign Liquor (IMFL) in India.

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