Radico Khaitan Q2 net falls 21.5% to Rs 14.79 crore

BANGALORE: Liquor marketer Radico Khaitan posted 21.5% drop in net profit to Rs 14.79 crore in the second quarter of financial year 2011-12. Higher interest costs and foreign exchange losses brought down the company’s net profit from Rs 18.84 crore in the comparable period.

Radico Khaitan owns brands such as Magic Moments vodka, Morepheus brandy and After Dark whisky.

This was despite a year-on-year increase of 14.7% in net sales (including sale from tie-up units net of royalty income) to Rs 352.7 crore.

“The Foreign exchange loss is only notional, our EBITDA grew 18.3% and profit after interest but before exception items grew 13.9%,” Abhishek Khaitan, MD of Radico Khaitan, said.

The New Delhi-based company posted an exceptional loss of Rs 5.37 crore due to currency fluctuations on long term foreign currency borrowings as the rupee depreciated almost 10% from Rs 48.93 end-September against Rs 44.72 end-June.

In the quarter under consideration, Radico redeemed Foreign Currency Convertible Bonds (FCCBs) worth $50 million. The company had issued FCCBs in 2006 to fund capital expenditure. In July it refinanced the same through lower cost, external commercial borrowings of seven-year maturity.

Its interest costs also ballooned 86% to Rs 13 crore. But when queried, CFO Dilip Banthiya said Radico’s net interest was Rs 7.8 crore in the second quarter against Rs 6 crore in the year-ago period after adjusting the interest received shown under other income.

“Radico’s continued focus on premiumisation has resulted in an increased share of premium brands in the overall sales volumes,” Lalit Khaitan, chairman and MD of Radico Khaitan, said in a statement. Magic Moments vodka and Morpheus brandy contributed 14.5% of volumes against 13.1% in the comparable period.

Radico Khaitan’s stock closed at Rs 124.10 on the BSE, 0.53% higher on Wednesday trading. The company’s results were announced after market hours.