ICICI Direct: Radico Khaitan’s Strong Margins In Challenging Demand Scenario
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ICICI Direct Report
Radico Khaitan Ltd. reported strong margins in Q1 FY21 in spite of a decline in revenues. Net revenues for Q1 FY21 declined 34% YoY to Rs 409 crore due to 43% decline in Indian made foreign liquor (IMFL) volumes to 3.54 million cases.
Prestige and above segment volumes declined 47% while regular segment volumes declined 41% YoY. Gross margin increased 660 basis points YoY to 54.6%.
In spite of negative operating leverage, the company reported a 230 basis points YoY improvement in Ebitda margin to 18.4%, which restricted the decline in Ebitda to 25%.Consequently, profit after tax declined 20% YoY to Rs 44 crore owing to lower tax rate (24%in Q1 FY21 versus 34% in Q1 FY20).
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