Investor Center :: Chairman Message
   
 
  • Speech by Chairman
    2014-15
    Dear Shareholders,

    Radico Khaitan started its journey in 1943 as a distillery and a supplier of spirits. In 1998, we started the branded IMFL business with the launch of 8 PM whisky which became a millionaire brand shortly after its launch. Always ahead of the curve, we have been able to build the highly reputable brand equity and product portfolio that we have today. Radico Khaitan believes in its strong values, rich heritage, commitment to consumer satisfaction and culture of innovation. These remain the key pillars of our strength and foundation for future growth.

    The last couple of years have been challenging for the Indian economy which has also impacted the domestic spirits industry. The economic slowdown coupled with higher input costs and increasing duties & taxes in several states continued to impact the spirits industry. During the Financial Year 2015, the Indian economy experienced early signs of a recovery due to lower inflation and government reforms but the consumption demand at ground level did not show signs of any significant improvement. We believe that the changing macro environment will benefit us in the coming years

    The long term outlook of the sector is very attractive and even more so now with the changing consumer preferences toward higher quality products. We are one of the pioneers to identify this industry trend and made early investments in premium brands such as Magic Moments vodka and Morpheus brandy. The success of our strategy is evident from the ever increasing share of our premium category brands in our overall product mix.

    It gives me immense pleasure that our premium brands, in particular Magic Moments and Morpheus, continue to win accolades for their superior quality. These awards are a testament to our focus on consumer satisfaction and our understanding of their preferences. In the Monde Selection (International Institute for Quality Selection) 2015 awards, Magic Moments Remix Lemongrass & Ginger and Magic Moments Remix Peach Flavoured Vodka received the Grand Gold award and 10 other brands received the Gold award

    Despite the challenging operating environment, we reported a stable financial performance for the fiscal year 2015. We believe that this difficult operating environment is a short term challenge and we are well positioned for the anticipated upturn in the industry. Input costs, which have been increasing over the last couple of years, are believed to have peaked, in particular ENA (Extra Neutral Alcohol) prices. We expect the ENA prices to stabilize at these levels in the near term. With the expected recovery in the operating environment, we are confident that our financial and operating performance will improve significantly in the near term. In line with our strategy, we have begun reducing our debt levels reflecting our focus on free cash flow generation. We expect this cash flow trend to continue which will enable us to strengthen our balance sheet further.

    We are focused on future in high spirits as we prepare for the next exciting phase of growth in the years to come. Thank you for your ongoing support and we look forward to a bright future of your Company.

    High Spirits Future Focus
    With warm regards
    Dr. Lalit Khaitan
    Chairman & Managing Director

     
 
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