Buy Radico Khaitan: IIFL Securities's Target Price Rs 1850

On April 12, IIFL Securities initiated coverage on Radico Khaitan with a buy recommendation and a target price of Rs 1850, implying an upside potential of 3%. The brokerage firm cited Radico's strong brand portfolio, robust distribution network, and healthy balance sheet as key reasons for its bullish stance. Radico Khaitan, the leading Indian whiskey manufacturer, is expected to benefit from the increasing demand for premium spirits in the country.

About Radico Khaitan:

Radico Khaitan Limited, established in 1943, is a leading Indian alcohol beverage company listed on the National Stock Exchange (NSE). Headquartered in Rampur, Uttar Pradesh, the company holds a significant market share in the Indian Made Foreign Liquor (IMFL) segment. Radico Khaitan boasts a portfolio of popular spirits such as Magic Moments Vodka, 8 PM Whisky, and Old Monk Rum, which has a strong presence in both domestic and international markets. The company has a diverse distribution network across India and exports to over 120 countries worldwide.

52 Week Price Trend:

Radico Khaitan's CMP of Rs 1795.7 is close to its 52-week high of Rs 1885.1, indicating a strong uptrend. The stock has witnessed a significant rally since its 52-week low of Rs 1068.55, suggesting a positive outlook. Technical indicators such as moving averages and relative strength index (RSI) also support the bullish momentum. Investors may consider monitoring the stock's performance near the resistance level of Rs 1885.1 and watch for breakout signals to confirm the upward trend.

Stratzy's MOST Analysis:

RADICO Khaitan has been rated BBB by Stratzy's MOST framework, indicating moderate fundamental risks. This rating is based on the company's management effectiveness, positive outlook, adequate safety measures, and stable trend. The management has demonstrated competence in navigating challenges, while the outlook remains favorable due to the company's position in the growing alcohol industry. RADICO's safety measures are sufficient, and its consistent performance has resulted in a stable trend. Overall, the BBB rating suggests moderate fundamental risks for investors considering RADICO Khaitan.

Company's Fundamentals:

Radico Khaitan (NSE: RADICO) exhibits a high Stock PE ratio of 91.95, indicating that investors are willing to pay a premium for each rupee of its earnings. Its Price-to-Book (PB) ratio of 9.69 suggests that the market valuation is significantly higher than the company's book value. The low Dividend Yield of 0.18% implies a small return on investment for shareholders through dividends. These metrics reflect investor expectations of future growth potential, but also highlight concerns about potential overvaluation and limited dividend income.

Fundamental and Technical information provided in this blog were last updated on 12 Apr, 2024

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