GM Breweries disappointed the street and analysts with a poor set of numbers for Q2FY15. Its net profit for the quarter came in at a dismal Rs.2 crore, down from Rs.6 crore in Q2FY14 and Rs.4.5 crore in Q1. The growth in sales was muted, rise of 7% (YoY) and flat sequentially at Rs.75 crore.

What really dented the bottomline was the surge in operating costs, up 16% (YoY) and this was led by raw material costs, which rose 28% and packing cost rose 17%. The increase in price of rectified spirit led to the jump in raw material costs.

The company is engaged in the activities of manufacturing and marketing of Alcoholic Beverages; such as Country Liquor (CL) and Indian made Foreign Liquor (IMFL). It is the largest manufacturer of country liquor in the state of Maharashtra with a sizeable market share. Its brands are GM Santra, GM Limbu Punch, GM Dilbahar Sounf and GM Doctor. The company is essentially is a “country” liquor maker and thus has a huge customer base though margins are lower than the other big branded liquor companies, which is made up through higher volumes. Promoters stake as at 30^th Sept 2014 stands at 74.43%.