Radico up 52% in 7 months; JM Financial initiates coverage with 'Buy' call

JM Financial Institutional Securities initiated coverage on Radico Khaitan with a 'Buy' rating and a target price of ₹3,515.

Radico Khaitan share price today

Shares of Radico Khaitan hit a new high of ₹3,068.65, as they gained 2 per cent on the BSE in Friday’s intra-day trade in an otherwise weak market. In comparison, the BSE Sensex was down 0.36 per cent at 82,711 at 02:53 PM.

 

In the past week, the stock price breweries and distilleries company has outperformed the market, rallied 7 per cent, as compared to a 1 per cent rise in the BSE Sensex. In the past seven months, the market price of Radico Khaitan has appreciated by 52 per cent.

JM Financial initiates coverage on Radico 

JM Financial Institutional Securities initiated coverage on Radico Khaitan with a 'Buy' rating and a September 2026 target price of ₹3,515 per share. 

 

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Radico has been at the forefront in capturing the premiumisation wave to emerge as one of the fastest-growing players in the Prestige & Above (P&A) segment, outperforming industry as well as large MNC players (UNSP/Pernod Ricard). 

 

Radico's dominance in the fast-growing vodka segment and initial success in the P&A whisky segment provide confidence in the sustainability of revenue outperformance (sales CAGR of 18 per cent) vs. peers over FY25-28E, JM Financial said in its initial coverage report.

 

Faster growth in the high-margin P&A segment, stable input costs, UK FTA benefit and scale leverage will drive gains in Ebitda margin. Improving profitability, working capital and lower capex intensity will aid RoCE, drive higher free cash and strengthen the balance sheet. With faster earnings growth (c.36 per cent CAGR over FY25-28E) within the alcoholic beverage space, we expect premium valuations to sustain, the brokerage firm said.

 

Analysts expect faster margin expansion, driven by premiumisation through higher P&A salience, stronger mid-premium and luxury growth, improved non-IMFL profitability, UK FTA benefits, and stable input costs. Uptick in margins and better working capital will aid RoCE, which, along with lower capex intensity, will enable healthy FCF generation and ensure debt reduction. 

Radico Khaitan Q1 results 

Radico Khaitan’s consolidated revenues witnessed 33 per cent year-on-year (Y-o-Y) growth to ₹ 1,506 crore, driven by 37.5 per cent YoY growth in volumes to 9.72 million cases. P&A segment volumes witness strong performance, growing by 40.8 per cent Y-o-Y to 3.84 million cases, while Regular & others (R&O) grew by 2.4 per cent Y-o-Y to 5.42 million cases.

 

Growth was driven by a lower base of elections last year and also the normalisation of state-specific issues. P&A revenues grew by 43 per cent YoY to ₹713.2 crore, and R&O grew by 48 per cent Y-o-Y to ₹349.9 crore. 

 

Favourable mix, strong revenues and strong gross profit led to a 230 bps improvement in Earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin to 15.4 per cent while Ebitda grew 56 per cent Y-o-Y to ₹232.2 crore. 

 

This was due to a lower base, coupled with a normalisation of state-specific industry issues to a large extent. Change in the route-to-market in Andhra Pradesh also contributed to the regular volume growth. The management is optimistic that the pricing scenario for ENA and grains will remain stable going forward during FY2026.