January 15, 2016

Radico Khaitan (NSE Cash) - Buy ` 111 – `109

Range

` 97

Stop Loss

` 135

Target

Weekly Chart Technical Evidences

Source: Falcon ( Chart time: EOD as on January 14,2016)

Looking at the weekly chart, it can beseen that the stock broke out on theupside from its 10-month congestionzone of `100 – `78 during the monthof November 2015.

Recently, after posting a high around` 123.30, the stock price gave decentcorrection around the daily ‘89 EMA’level of ` 106.

Considering the ‘Higher BottomHigher Bottom’ formation in theweekly chart, we interpret thiscorrection as a pull back towards thebreakout point.

Thus, we advise traders to buy thisstock from current level to a declineup to ` 109 for a target of ` 135 incoming three months.

Breakout from congestion zone with rise in volumes

January 15, 2016

Radico KhaitanStock Info

Shareholding Pattern (%)

Radico Khaitan Ltd (RKL) is a leading manufacturer of Indian made foreign liquor(IMFL). It has a strong pan-India presence with growing sales in the premiumbrands category. The IMFL segment is underpenetrated and leaves scope forgrowth for domestic liquor companies. Going forward, increase in income levelswould lead to higher growth in IMFL brands. RKL has strong brands in thepremium liquor category, which should lead to higher revenue for the company.The company's premium offerings have reported a CAGR of ~26% over the lastseven-year period, and we expect the growth momentum to continue.

We expect the price of ENA (a key raw material) to remain stable and potentiallyeven decline, going forward. This is because sugar production during the yearhas risen by ~16% yoy and demand for ethanol from Indian oil marketingcompanies for blending with petrol is also expected to be lower due to anunfavourable price differential.

We expect a significant hike in liquor prices in the coming financial year as therehaven't been any significant ones in recent times. Also, we believe that theindustry leader - United Spirit would shift focus on profitability over volumegrowth considering the debt on its Balance Sheet, which in turn, should lead toincreased scope for other liquor companies to hike prices. Further, on theforward EV/Sales multiple front, RKL is trading at a huge discount to its closepeer, United Spirits.

Sector Breweries & Distilleries

Market cap 1,501

Beta 0.8

52 week high/low 131/78

Avg. Daily Volume 1,50,700

Face Value (`) 2

Company Sales OPM PAT EPS RoE P/E P/BV EV/BITDA EV/Sales

(` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)

FY2016E 1,565 12.2 75 5.7 8.3 19.6 1.7 11.8 1.4

FY2017E 1,687 13.0 95 7.1 9.6 15.7 1.5 10.1 1.3

Promoters 40.5

MF / Banks / Indian Fls 21.1

FII / NRIs / OCBs 13.3

Indian Public / Others 25.1

Disclosure of Interest Statement Radico Khaitan1. Analyst ownership of the stock No2. Angel and its Group companies ownership of the stock No3. Angel and its Group companies' Directors ownership of the stock No4. Broking relationship with company covered No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

January 15, 2015

Technical Research Team Tel: 022 - 40003600 E-mail: techno-edge@angelbroking.com Website: www.angelbroking.com

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