Radico Khaitan, manufacturers of the 8PM whisky brand, has seen a good response to its two recently introduced premium segment whisky?After Dark and Eagle Dare. After the first round of price hike in April, the company does not plan any further price rise this fiscal. Abhishek Khaitan, managing director of Radico Khaitan, tells FE?s Shubham Batra that the said whisky brands are under test-marketing and will see a pan-India presence from next fiscal. Excerpts:
How was the last quarter for the company?s Indian Made Foreign Liquor (IMFL) segment, after the launch of new products?
Around 80% of the business comes from IMFL. In the current fiscal, we expect a volume growth of about 15-17%. Net profit has been up by about 50% from Rs 10 crore to 16.05 crore. Profit before tax and exceptional items is up by 145% from Rs 8.8 crore to Rs 21.5 crore because of exceptional gains last year. We had an FCCB buy back. Going forward, we see PAT better than 50% for the whole year.
Where would you position yourself in the market?
Three years ago, we positioned our brands in the premium segment. Our Magic Moment Vodka is priced at Rs 350 per bottle. We have the most expensive brandy in the country, Morpheus, priced at Rs 650. Recently, we came out with our whisky After Dark that is in the price point Rs 400-450 per bottle. Higher the price points, the contribution on margins are much more. Moreover, Magic Moments Vodka for the June quarter has grown 32%. It has sold 5.14 lakh cases, becoming the largest selling Vodka in the country.
What is the view on the current molasses prices, which is your primary raw material?
Last quarter, we had carry-forward stock. Molasses, which accounts for about 80% of our cost of production, was down last quarter. The raw material prices have dipped to about 20%. It should stabilise at the those levels.
Where does the current debt level stand?
Last March, our debt stood at Rs 423 crore, with a debt-equity ratio of only 0.68. It is down to Rs 400 crore currently and we are very comfortable with it. The surplus that would be there from now, will be used for working capital because we expect a volume growth of about 17% or we might be using it to reduce our debt further. I think its one of the healthiest balance sheets in any sector.