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Expect EBITDA margins to be in late teens in next two-three years, says Radico Khaitan

Updated : January 23, 2019 03:03 PM IST

Liquor firm, Radico Khaitan, on Wednesday said it expects earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins to be in the late teens in next two-three years.

The company reported a 48.78 percent jump in its net profit at Rs 52.09 crore for the quarter ended December 2018. Radico Khaitan had posted a net profit of Rs 35.01 crore during the same period of the previous fiscal.

In an interview to CNBC-TV18, Abhishek Khaitan, managing director, said, "Our volume growth overall has been 7.2 percent. Most importantly, our premium portfolio has grown by 18.5 percent and in revenue terms, now our premium portfolio accounts for 50 percent of the sale."

“For the nine months, the premium segment has grown by about 20 percent and in the last quarter, it grew by about 15 percent. Last three-four years, we have been absolutely concentrating on our premium portfolio. We expect the premium sale to be about 60 percent of the revenue,” Khaitan said.

“Gross margin is around 50 percent. With the new ethanol policy, we expect the prices of alcohol to be up by about Rs 2-3 a litre. We will be able to maintain our margins because of our premium growth. It should go up to late teens in the next two years," he said.

“Our EBITDA margins in the current quarter is 17.2 percent, which is up by about 170 basis points (bps) and even for the nine months, it's 17.4 compared to 15 percent," he added.

One basis point is a hundredth of a percentage point.
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