Radico Khaitan Q2 FY19 top line up by 15.5% y-o-y

Radico Khaitan logo

Net Debt declined by INR 200 crore compared to March 2018

Performance Highlights: Q2 FY2019 vs. Q2 FY2018

· Revenue from Operations (Net) of Rs. 517.65 Cr (+15.5%)

· Prestige & Above brands volumes increased by 14.6%

· Prestige & Above brands contribution to the total IMFL volumes of 28.1% (vs. 27.3% last year)

· Gross Margin improved from 46.8% to 50.1%

· EBITDA margin improved from 14.5% to 17.6%

· Reduction in interest costs from Rs. 17.66 Cr to Rs. 9.16 Cr

· Net debt reduced by Rs. 59.75 Cr during Q2 FY2019 (Rs. 199.95 Cr during H1 FY2019)

Radico Khaitan Limited, one of the largest spirits companies in India (referred to as “Radico Khaitan” or the “Company”), announces its secondquarter results for FY2019.

Commenting on the performance, Dr. Lalit Khaitan, Chairman and Managing Director said:

“Building upon the strong growth momentum at the start of the year, Radico Khaitan delivered another quarter of stellar performance. This growth was driven by a significantly improved operating environment and recently received price increases across a number of key IMFL consuming states. We generated strong free cash flows which enabled us to reduce our net debt by Rs. 200 Crore during the first half of the year. Strong cash flows and a profitable growth led by premium volumes remains the core of our strategy and we are very confident about the future as we see this strategy delivering expected results.”

Commenting on the performance, Abhishek Khaitan, Managing Director said:

“I am pleased to report consistently strong financial and operational results during Q2 FY2019. We delivered IMFL volume growth of 11.5% y-o-y during Q2 FY2019 led by Prestige & Above category brand volume growth of 14.6%. Our Revenue from Operations increased by 15.5% with a corresponding profitability improvement. EBITDA growth was strong at 40.0% with a margin of 17.6% which reflects over 300 bps improvement compared to Q2 FY2018. We continue to drive growth in our Prestige & Above brands with focused marketing investments which is clearly reflected in the increasing market shares for our key brands such as Magic Moments vodka. During October 2018, we launched TV commercial campaign for our most successful Magic Moments brand with youth icons and Bollywood celebrities Jacqueline Fernandez and Kartik Aryan. Going forward, we will continue to make investments in our premium brands and make selective new product launches to drive a sustainable and profitable growth.”

Radico Khaitan at a Glance:

Radico Khaitan Limited (“Radico Khaitan” or the Company) is among the oldest and one of the largest manufacturers of Indian Made Foreign Liquor (“IMFL”) in India. Earlier known as Rampur Distillery, Radico Khaitan commenced its operations in 1943 and over the years emerged as a major bulk spirits supplier and bottler to other spirit manufacturers. Driven by the vision of the promoters, in 1998 the Company started its own brands with the introduction of 8PM Whisky. Radico Khaitan is one of the few companies in India to have developed its entire brand portfolio organically. This is a true testament to the Company’s R&D strength and understanding of customer preferences. The Company’s brand portfolio includes After Dark Whisky, Contessa Rum, Magic Moments Vodka, Morpheus Brandy, Old Admiral Brandy and 8PM Whisky. Currently, the Company has four millionaire brands which are 8PM Whisky, Contessa Rum, Old Admiral Brandy and Magic Moments Vodka. Each of these brands sell more than a million cases per year.

Over the years Radico Khaitan has been focusing on the premiumisation of its portfolio. The Company has launched six new brands in the past five years, all of which are in the premium category. Radico Khaitan is also one of the largest providers of branded IMFL to the Canteen Stores Department (CSD), which has significant business barriers to entry. The Company has three distilleries in Rampur, Uttar Pradesh and one in Aurangabad, Maharashtra which is a 36% joint venture. The Company has a total owned capacity of 157 million litres and operates 32 contract bottling units spread across the country.

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