Motilal Oswal Upgrades Radico Khaitan to BUY with ₹3,850 Target

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AuthorAarav Shah|Published at:
Motilal Oswal Upgrades Radico Khaitan to BUY with ₹3,850 Target
Overview

Motilal Oswal maintains a BUY rating on Radico Khaitan, highlighting the company's superior industry growth and increasing market share, particularly in the premium & alcobev (P&A) segment which now drives 70% of IMFL revenues. With an anticipated 25% EPS CAGR from FY26-28E, the firm values Radico Khaitan at 55x FY28E EPS, setting a target price of ₹3,850.

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Market Share Gains

Motilal Oswal's latest analysis shows Radico Khaitan consistently outperforming the industry, leading to significant market share gains. The company now holds about 8% of the Indian spirits market, estimated at 310 million cases for FY25.

Premium Segment Surge

A key driver is the company's premium and alcobev (P&A) volumes, which have surged dramatically. They rose from roughly 4 million cases in FY15 to an estimated 17 million cases by FY26, significantly boosting Radico Khaitan's earnings.

Revenue Growth and Outlook

The P&A segment now accounts for about 70% of Radico Khaitan's Indian Made Foreign Liquor (IMFL) revenues, a substantial increase from 48% in FY19. This trend is expected to continue, fueled by ongoing premiumization efforts and operational improvements.

Motilal Oswal projects a strong 25% Compound Annual Growth Rate (CAGR) for Earnings Per Share (EPS) between FY26 and FY28. This forecast underpins the company's current valuation.

Analyst Recommendation

Based on these projections, Motilal Oswal values Radico Khaitan at 55 times its estimated FY28 EPS, leading to a price target of INR3,850 per share. The firm reiterates its BUY recommendation, citing strong market positioning and financial forecasts as drivers for potential stock growth.

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Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.