GM Breweries on a heady rise

For the past two days, GM Breweries has been hitting the 5% upper circuit the moment it opens for trading. Today it hit the 5% circuit at Rs.498.80. This is not too far away from its current 52-week high of Rs.509.70.

The reason for this heady rise? The company announced its Q2FY16 yesterday late evening and the market is pretty kicked about it and rightly so too!

The company posted a whopping 350% (YoY) jump in net profit at Rs.9 crore and this was driven purely by robust sales – up 25% at Rs.94 crore. EBITDA came in at Rs.18 crore, up three times and margins spurted up from 8% to 19.15%. Its HIFY16 net profit at Rs.25 crore has already surpassed that of entire FY15 of Rs.17 crore.

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 end of Q2FY16 stands at 74.43%.