P&A lifts Radico Khaitan performance

News: Radico Q3FY22 revenues grew 12% to Rs.766 crore, led by overall IMFL volume growth of 7% (82% of consolidated revenues). However, EBITDA de-grew 4% YoY to Rs.119 crore, led by 270 bps contraction in EBITDA margins to 15.5% (460 bps contraction in gross margins mainly due to higher commodity inflation, particularly in non-IMFL business). Subsequently, PAT de-grew 6% to Rs.79 crore.

Views: P&A grew 18% during the quarter, while popular grew mere 3%, leading to a positive product mix. Net debt reduced to Rs.135 crore in Q3FY22 from Rs.198 crore in FY21. The company will again embark on a capex program to double its distillation capacity to ~22 crore litre (incremental ~11.6 cr litre), with a capex outlay of Rs.740 crore.

Impact: Positive