G M Brew

GM Breweries held the mantle of being the first company for announcing its Q4 and FY16 numbers, the first almost always amongst all listed companies. Despite a good Q3 performance and expectations of Q4 being good too, the stock price was down yesterday in the red. Today too, post the very exuberant numbers and a 1:4 bonus, the stock is just about managing to hold onto the green. The market has probably decided to look at only the QoQ earnings which were pale when compared to YoY eanrings, which again was on account of lower base effect.

The company ended the last quarter of FY16 with a 18% (YoY) jump in net sales at Rs.92 crore. Total expenses as a percentage of total revenue earned was down from 86% to 76%. EBITDA jumped up 83% at Rs.22 crore and margins were very healthy at 23.91% v/s 15.38%. It had another income of Rs 2crore v/s Rs.3 lakh in previous Q4. Tax outgo more than doubled to Rs.9 crore. It ended the quarter with a net profit at Rs.17 crore, up 183% (YoY) and up 13% (QoQ).

The company ended FY16 with a net profit of Rs.58 crore, up over 3 times. Reserves is at Rs.169 crore and cash at hand is at Rs.34 crore.

A debt free company, it 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.