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Investing.com - Investec has raised its price target on Radico Khaitan Ltd (NS:RDCK) to INR3,544.00 from INR3,184.00 while maintaining a Buy rating on the Indian spirits company.
The revision follows Radico Khaitan ’s strong second-quarter performance, which showed a 33.8% revenue growth to Rs14,939 million, driven by a 37.1% increase in Indian-made foreign liquor (IMFL) sales on 37.8% volume growth.
The company’s operating margin expanded during the quarter, which Investec attributes to operating leverage and a richer product mix, noting that gross margins remained stable year-over-year while improving quarter-over-quarter.
Investec highlights that Radico Khaitan’s sustained scale-up of its premium portfolio, new product launches, and stable raw material costs create favorable conditions for the company’s continued growth.
Despite current valuations at 52 times FY27 estimated earnings exceeding the five-year average of approximately 45 times, Investec expects Radico’s enhanced growth and margin profile to drive revenue/EBITDA/EPS compound annual growth rates of 14/26/37% over FY25-28, compared to 15/8/6% over FY19-24.
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