Housing finance companies to do well over the next 2-3 years: Madhu Kela

There is one side of the liquor basket Radico Khaitans of the world, United Spirits, some of them may be in your portfolio, I just want to for example purposes catering to the high end premium kind of a consumer, on the other hand we have Tilaknagar, Jagatjit, Som Distilleries of the world, there are half a dozen companies, how should investors approach this space which side do you think are earning prospects higher or should a basket approach be a better one?

Again just to explain my point we will discuss some examples, it is not my recommendation to buy these shares. Let us say I have been investor in Radico for a long time. You have seen what a fabulous journey this company has had in last 17-18 years, they were selling whisky at 500 rupees a bottle, now the same company has sold a whisky at 5 lakh rupees a bottle, they sold 400 cases few months back at 5 lakh rupees a bottle and the brand is globally recognised now. So, I think it is a journey when you make liquor actually to make a higher quality of liquor, you have to only distil it in a normal liquor, you will distil it for 24 hours, in a higher quality you may have to distil it for 96 hours or so, so there is no change in the raw material, the raw material is the same, there is a 25 rupee kg rice or a jau, the raw material does not change. Hence if you are able to build a brand, then you make serious money in this sector and that is what is being proven by Pernod Ricard, by Diageo worldwide.

If you look at their brand, they are selling one bottle of 750 grams at 25,000, 30,000, 40,000 rupees, you look at lot of these Japanese whisky which are trading at 20,000, 30,000 rupees a bottle. So, I see it is a journey for the liquor companies as you start to generate cash you will start to invest into premiumisation and lot of these companies will follow the suit and India is happening, when we go abroad, you feel very proud that in so many airports now Indian made whisky, Indian made liquor is available.

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