1 P a g e. Report By: Vikash Kandoi Page 1

Transcription

1 1 P a g e Report By: Vikash Kandoi vikash@dynamiclevels.com Page 1

2 GM Breweries - Fresh, Smooth, Real - It s all here Company Overview and Stock price. 3 Product Overview....4 Industry Outlook..6 Company Financial Balance Sheet Cash Flow Peer Comparison Shareholding Pattern Investment Rationale Disclaimer.. 13 Page 2

3 Company s Overview and Stock Price G M Breweries Limited is engaged in the activities of manufacturing and marketing of Alcoholic Beverages; such as Country Liquor (CL) and Indian made Foreign Liquor (IMFL). The company is growing steadily and has earned a dedicated customer base. GMBL is the largest manufacturer of country liquor in the state of Maharashtra with a sizeable market share. GMBL also contributes substantially to the state exchequer by way of excise duty and value added tax. G M Breweries Limited is having a state of the art fully automatic Bottling Plant at Virar, District Thane, in the state of Maharashtra with a capacity to produce about 50,000 cases a day. Initially The Company started producing 200 cases a day which has now reached to more than 50,000 cases a day. The country liquor industry producers were producing only 750 & 375 ml bottles only in the old days but it was Mr. Jimmy Almeida who introduced 180 ml bottles in the country liquor industry. Further he was pioneer in introducing pet bottles to the country liquor industry. EXCHANGE SYMBOL GM BREWERIES Current Price * (Rs.) Face Value (Rs.) Week High (Rs.) (08-Jan-16) 52 Week Low (Rs.) (03-Jun-15) Life Time high (Rs.) (08-Jan-16) Life Time low (Rs.) 1.95 (11-Aug-99) Average Daily Movement Average Volume Month Return (%) P/E Ratio (x) Book Value Market Cap (Cr) % of Promoter pledged 0 Below is a Weekly chart of GM Breweries showing support at 500 levels. Page 3

4 Product Overview G.M.SANTRA The most leading and Prestigious blend, made from Premium distilled Molasses based Rectified Spirit of Multi Pressure Vaccum Distillation Plant. Blended with the best Orange flavours and widely preferred by the consumers for its organoleptic taste and aroma. The product is ruling at No. 1 Position amongst Country Liquor Industry for the past 12 years, in the State of Maharashtra. Gas Chromatography Analysis is used to maintain the consistency of the Blend/Product. The company has finely filtered through 0.4 micron Resin Bonded Cellulose Cartridge Filtration system, to provide crystal clear Brand. Its Foreign Liquors Envy, Country Liquors Pride Blend. G.M.DOCTOR G.M Doctor is one of the prestigious brands made from finely Distilled Vaccum distillation Plant. Balanced Blend with the toss of sugarcane juice spirit flavour. This is highly bodied palate and taste. The product is ruling in the market for the last 25 years. Gas chromatography is used to maintain the required impurities to palatable standards. Reputed Blend in all over Maharashtra State. The product has crystal clear filtration through 0.4 micron RBC cartridge filtration. G.M.LIMBU PUNCH A mixed punch blend of Lemon and lime flavours, along with the most supervised quality of Rectified Spirit from MPVD plant. Again a toss of sweetness and sour taste maintained with the whiff of Indian Spices and Herbs flavours. Consumers say it s a cocktail made available to the consumers of foreign liquors. The product has transparent filtration through 0.4 micron RBC cartridge filter. Page 4

5 G.M.DILBAHAR SOUNF Superior blend of Extract fine Distilled Rectified Spirit and Anise flavour, added all spices flavours and herbs flavour for additional palate. A balanced blend of smoothness and mouth freshness, Tastes sweet, 0.4 micron RBC cartridge filter is used for filtration media to fine crystal clear blend. Page 5

6 Industry Outlook Indian alcoholic beverages market is expected to grow at a CAGR of 11.1% during FY 2015-FY 2020 Future Growth of India alcohol beverages market is expected to be driven by expanding reach of market players and increase in variants in alcohol. Future market is expected to rise in IMFL and Beer segments. Ken Research announced its latest publication on India Alcoholic Beverages Market Outlook to 2020 Inflating Demand for IMFL and Beer from Youth and Women Segments provides a comprehensive analysis on Indian Alcoholic beverages market and covers specific insights on the market size of Country liquor, beer, IMFL (whisky, rum, brandy, vodka, gin) and Wine on the basis of consumption, per capita consumption, in terms of value and volume. The report also entails market segmentation by state and gender, competitive landscape, company profiles of the major players operating in the country, government regulations, recent trends and developments and future outlook of the Indian alcohol beverage market. India is considered as a lucrative and majorly unexplored destination for alcoholic drinks by several international companies operating in saturated alcoholic beverages markets of Europe and the US. India s alcoholic beverage market has grown steadily in the last 5 years. Country Liquor is the second most consumed alcoholic beverage in India and has a commanding presence in the northern states of India. However, the scenario is changing and a decline in the market share of Country Liquor has been noticed. This industry has grown at an overall steady pace triggered by increasing population and disposable income, and also the fact that it is increasingly gaining social acceptance. Beer is a rapidly expanding segment in the Indian alcoholic beverages industry. It is the third largest market and second fastest growing market in the Indian alcoholic beverages industry. Beer market has been segmented into strong beer and mild beer on the basis of their alcohol content. Strong beer which has alcohol content more than 5%, dominates the Indian market stating its popularity and preference. Indian alcoholic beverages market is one of the fastest growing industries in the world with several yet to be explored segments. With compelling business potential and economies of scale poised by the market, it is expected that several international players will expand their operations into the Indian alcoholic drinks market in the coming years. Page 6

7 Company Financials Consolidated Income Statement (in Cr.) Mar'16 Annual Mar'15 Annual Growth % Net Sales/Income from operations % Other Operating Income Total Income From Operations Increase/Decrease in Stocks Consumption of Raw Materials % Employees Cost % Depreciation Other Expenses Total Expenditure Operating Profit % Other Income P/L Before Int., Excpt. Items & Tax Interest % P/L Before Exceptional Items & Tax Exceptional Item P/L Before Tax Tax PAT % Equity Share Capital Reserves EPS (Rs.) [After Extraordinary items] % Company s revenue has jumped by 16.99% annually from to compared to growth of 6.48% in FY15. Company s cost of raw material has gone down by 8.02% Company has very less interest outgo and has further lowered down the same in last year. Operating profit has jumped by % annually. Net profit jumped by % annually Page 7

8 Balance Sheet Balance Sheet as at 31st March 2016 Mar'16 Mar'15 I. EQUITY AND LIABILITIES 1 Shareholders Funds a) Share Capital b) Reserves & Surplus Non-Current Liabilities a) Long-term Borrowings b) Deferred tax liabilities Current Liabilities a) Short -term Borrowings b) Trade Payables c) Other current liabilities d) Short-term provisions TOTAL II. ASSETS 1 Non-Current assets a) Fixed Assets (i) Tangible assets (ii) Intangible assets (iii) Capital work-in-progress b) Non-Current investments c) Long-term loans and advances Current Assets a) Inventories b) Trade Receivables c) Cash and cash equivalents d) Short-term Loans and Advances e) Other current assets TOTAL Company showed a jump of 8.25% annually in balance sheet. Page 8

9 Cash Flow Cash Flow Statement for the year ended March Particulars Mar'16 Mar'15 A. Cash Flow From Operating Activities Net Profit before tax Adjustments For: Depreciation Interest Indirect Taxes Dividend Received Interest Received Other Non-Operating Income Operating Profit before Working Capital Changes Adjustment for: (Increase)/Decrease in Trade and Other Received (Increase)/Decrease in Inventories (Increase)/Decrease in Trade Payables Cash generated from Operations Direct Taxes Paid Indirect Taxes Paid Net Cash from Operating Activities B. Cash Flow from Investing Activities Increase/Decrease in Fixed Assets Increase in Investments Interest Received Dividend Received Other Non-Operating Income Net Cash (used in)/ from Investing activities C. Cash Flow from Financing Activities Increase/(Decrease) in Long Term Borrowing Increase/(Decrease) in Short Term Borrowing Interest Paid Dividend Paid Tax on distributed profits Net Cash(used in)/ from Financing activities D. Net Changes in Cash and Cash Equivalents (A+B+C) E. Cash and Cash Equivalent at beginging of the period F. Cash and Cash Equivalent at End of the Period Company has a positive operating cash flow Company has not made any big capital investment Page 9

10 Peer Comparison # INSTRUMENT Price Avg. Volume Market Cap (Rs. in Cr) 1 GM BREWERIES 2 RADICO KHAITAN 3 SOM DISTILLERIES 4 UBL Company has god average volume and market capitalization this give liquidity to the share price of stock. # INSTRUMENT Price Debt Equity Ratio (X) Int. Coverage Ratio (X) 1 GM BREWERIES 2 RADICO KHAITAN 3 SOM DISTILLERIES 4 UBL GM breweries is a Zero Debt Company % % FII P/E # INSTRUMENT Price Pledged Holding Ratio (X) 1 GM BREWERIES RADICO KHAITAN 3 SOM DISTILLERIES 4 UBL FII does not hold any position right now in GM Breweries but stock is trading at low PE multiple Till 18 th Aug 2015 SL INSTRUMENT 1M 3M 6M 1Y 1 GM BREWERIES RADICO KHAITAN SOM DISTILLERIES UBL GM Breweries was top performer in 1 year jumped 502% stock from Rs. 100 low trading at Rs Page 10

11 Shareholding Pattern Shareholding Pattern Mar-16 Dec-15 Sep-15 Jun-15 Mar-15 Promoter and Promoter Group (%) Indian Foreign NIL NIL NIL NIL NIL Institutions (%) FII NIL NIL 2.33 NIL NIL DII Non-Institutions (%) Bodies Corporate NIL NIL Others Custodians NIL NIL NIL NIL NIL Total no. of shares (cr.) GM Breweries does not have huge FII & DII investment COMPANY PROFILE OF GM BREWERIES, NSE, INDIA Date of Incorporation 09-Dec-1981 Date of Listing 23-Aug-1995 Management Name Designation Jimmy Almeida Chairman & Managing Director Dilip Diwan Director Kiran Parashare Director Paresh Trivedi Director Shantilal Haria Director Jyoti Almeida Whole Time Director Registered Office Address Ganesh Niwas,S. Veer Savarkar Marg,Prabhadevi,400025,Mumbai,Maharashtra,India Website Ratio Analysis Name Ratio Current Ratio (x) 1.24 Quick Ratio (x) 0.98 Dividend Yield (%) 0.37 Interest Coverage Ratio (x) Debt Equity Ratio (x) 0.00 Return On Asset (%) Return On Equity (%) # Announcement Interim/ Ex-Date Amount Date Final 1 05-Apr May Final 2 07-Apr May Final 3 03-Apr May Final 4 04-Apr Apr Final 5 03-Apr May Final 6 07-Apr May Final 7 07-Apr Apr Final 8 06-Apr Apr Final 9 04-Apr Apr Final Apr May Final Page 11

12 Investment Rationale The company has a highest Market capitalization of crs as Indian Liquor Company. Industry PE ratio for the sector is around 20, GM Breweries is trading at lower than industry PE ratio. GM Breweries share price has surged 500% in 1year. Company s revenue has jumped by 16.99% annually. GM Breweries is a zero debt company. Net profit jumped by % annually. Good economies of scales as company Raw material consumption cost declined by 8% were sales jumped by 16.99%. Company pays dividend of Rs every year per share. The company has capacity to process crore bulk litres of country liquor per annum out of which only about % has been utilized last year. Barring the aforesaid deterrents, the company does not foresee any major threats to its growth and market share in the coming years. The existing capacity should take care of the company s requirement at least for the next Five years and the Company does not foresee any technological obsolescence for its products. During the past several years, the Company has started using 180 Ml Glass bottles embossed with its Registered Logo and also taken adequate legal steps to ensure that, these bottles are not used by other liquor manufacturers. To overcome the problem of shortage, wide price fluctuation and heavy breakages in glass bottles, the Company has started marketing all sizes of country liquor in PET bottles which has gained wide acceptance from the consumers. The company continues to make representations at various levels of the Government to take effective steps to curb the illicit market in the interest of the industry, revenue of the state as well as the public health. We recommend BUY in GM 645 with the target of 760 Page 12

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