The Hindu Business Line : Radico Khaitan gains on investment buying

THE Radico Khaitan stock on Thursday moved up on major bourses following investment buying of 7.5 lakh shares, representing around 4 per cent of the stake, by Reliance Capital Trustees Co (in the account of Reliance Growth Fund) from the promoters.

It bought 1,65,200 Radico shares from Rampur International Ltd, one of the four promoter outfits, at a price of Rs 96.15 each on the NSE. On the BSE, Reliance Capital picked up another 5,84,800 shares from three promoters' holding companies, Rampur, Shilaja Finance and Sapphire Intrex at a price of Rs 93.15 each. The total promoter outfits' holding was 59.80 per cent as on December 31, 2003.

The stock closed at Rs 103.50 on the NSE (52-week high is Rs 106.90) with a traded quantity of 2.84 lakh shares, 75.2 per cent of which presented for delivery. On the BSE, the counter had a volume of 7.66 lakh shares but its closing price has created a new year-high.

The company, of late, announced its debt restructuring plan, capacity hike, 20 additional bottling arrangements across the country and entry into Tamil Nadu, one of the largest markets for liquor in the country. It has planned to invest around Rs 150 crore for increasing distilling and fresh bottling capacity. It is also setting up a plant for anhydrous alcohol (an additive to petrol). The $10-million ECB from Bank of India, to fund the capex and to repay existing loans, will reduce the cost of borrowing.

According to Mr Ketan Thacer of Anagram Stockbroking, the investor interest in the counter is explained by expectation of an organic and inorganic growth for the company in the near future. It posted a 61 per cent growth in third-quarter net.

At today's closing price of Rs 104 on the BSE, the stock traded at 9.6 times its trailing four-quarter earnings of Rs 10.8 per share.

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