Radico Khaitan Q3 profit rises 77.71%, aims to be debt-free in 3 years
Bengaluru: Liquor firm Radico Khaitan Ltd plans to become a debt-free company in three years, its managing director said on Wednesday, even as the company reported a 77.71% jump in net profit for the fiscal third quarter.
Radico, which sells brands like Magic Moments vodka and Morpheus brandy, said it reduced net debt by Rs130 crore during the first nine months of 2017-18. It also reduced interest costs by 13.5% to Rs16.9 crore during the October-December quarter.
“We are focusing more on free cash flow. In the first half we had Rs72 crore debt reduction. This quarter we have further reduced by Rs57 crore. Last year we reduced our debt by Rs160 crore,” Abhishek Khaitan said in a telephone interview after the company reported its results.
Radico’s debt stood at Rs785 crore for the year ended 31 March 2017 and has now been reduced to Rs655 crore. The pace of debt reduction will continue, Khaitan said.
The country’s third-largest liquor maker reported a net profit from continuing operations of Rs35.01 crore, up from Rs19.70 crore a year ago. Revenue rose 40.56% to Rs1,747.98 crore from Rs1,243.53 crore last year.
Sales of its premium brands drove the jump in profit and revenue, Khaitan said. “Our premium segment is spearheaded by the Magic (Moments) family in vodka, where we have 50%-plus market share across all categories, and it is growing very nicely in the market. The other strong brand is Morpheus, a super-premium brandy, and it is growing in all the southern states,” he added.
Going ahead, other premium brands including Regal Talons, Pluton Bay and 1965 rums are also expected to drive growth. Its prestige and above brands grew 11.2% in the third fiscal quarter.
Sales in its regular segment also grew 20.1%. Khaitan attributes that to better profit from the segment after a few states—Telangana, Andhra Pradesh and Kerala— increased prices over the past two quarters.