Motilal Oswal Sees Rs 4000 Potential in Radico Khaitan

Motilal Oswal Maintains Positive Outlook for Radico Khaitan

Radico Khaitan, a leading spirits company, continued to demonstrate strong operating performance in the fourth quarter of fiscal year 2026 and the entire fiscal year 2026. The company reported a revenue growth of 15% year-over-year (YoY) at INR15.0 billion, with a significant increase in premium and above (P&A) value growth at 29%.

In contrast, the regular portfolio declined by 14% YoY. However, the P&A segment sustained its industry-leading performance, with volumes jumping 28% YoY to 4.4 million cases, exceeding the estimated 4.1 million cases. On the other hand, regular portfolio volumes declined 10% YoY to approximately 5 million cases due to a high base and the impact of policy changes in Karnataka and Maharashtra. Royalty cases declined 9% YoY to 0.4 million cases.

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Radico Khaitan's strong operating performance is reflected in its valuation multiples. The company is currently trading at 58x/47x FY27E/FY28E price-to-earnings (P/E) ratio, with a return on equity (RoE) and return on invested capital (RoIC) of 20% and 23% in FY27E, respectively. Motilal Oswal believes that the company's projected 25% earnings per share (EPS) compound annual growth rate (CAGR) over FY26-28E provides adequate support for sustaining rich valuations.

The research firm values Radico Khaitan at 55x P/E on March 2028 estimated EPS, resulting in a target price of INR4,000.