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Page 2 Source: Company, www.dynamiclevels.com
GM Breweries - Fresh, Smooth, Real - It’s all here
Company Overview and Stock price ……………………………………….……3
Product Overview……………………………………………………………….….…..4
Industry Outlook………………………………………………………………………..6
Company Financial….……………….…………….……………………….….…..…7
Balance Sheet…………………………………………..………….………….….……..8
Cash Flow……………..………………………………..…………….………….….……9
Peer Comparison…………….…………………………………………….……..…..10
Shareholding Pattern…………………………………………..……………....……11
Investment Rationale………………………………………...………….......…....12
Disclaimer……………………………………………………………………………..…13
Page 3 Source: Company, www.dynamiclevels.com
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.) 648.85
Face Value (Rs.) 10
52 Week High (Rs.) 936.00 (08-Jan-16)
52 Week Low (Rs.) 85.20 (03-Jun-15)
Life Time high (Rs.) 936.00 (08-Jan-16)
Life Time low (Rs.) 1.95 (11-Aug-99)
Average Daily
Movement
42.23
Average Volume 78271
1 Month Return (%) 11.21
P/E Ratio (x) 16.64
Book Value 123.77
Market Cap 969.73 (Cr)
% of Promoter pledged 0
Below is a Weekly chart of GM Breweries showing support at 500 levels.
Page 4 Source: Company, www.dynamiclevels.com
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 5 Source: Company, www.dynamiclevels.com
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 6 Source: Company, www.dynamiclevels.com
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 7 Source: Company, www.dynamiclevels.com
Company Financials
Consolidated Income Statement (in Cr.) Mar'16 Mar'15
Growth % Annual Annual
Net Sales/Income from operations 359.57 307.34 16.99%
Other Operating Income 0.09 0.09
Total Income From Operations 359.66 307.43
Increase/Decrease in Stocks -1.10 1.53
Consumption of Raw Materials 126.09 137.09 -8.02%
Employees Cost 8.74 8.46 3.31%
Depreciation 5.41 5.56
Other Expenses 140.10 125.03
Total Expenditure 279.24 277.67
Operating Profit 80.42 29.76 170.23%
Other Income 6.06 2.27
P/L Before Int., Excpt. Items & Tax 86.48 32.03
Interest 2.05 3.57 -42.58%
P/L Before Exceptional Items & Tax 84.43 28.46
Exceptional Item 3.36 --
P/L Before Tax 87.79 28.46
Tax 29.48 9.83
PAT 58.31 18.63 212.99%
Equity Share Capital 11.71 11.71
Reserves 169.28 114.49
EPS (Rs.) [After Extraordinary items] 49.85 15.93 212.93%
Company’s revenue has jumped by 16.99% annually from 307.34 to 359.57 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 170.23% annually.
Net profit jumped by 212.93% annually
Page 8 Source: Company, www.dynamiclevels.com
Balance Sheet
Balance Sheet as at 31st March 2016
Mar'16 Mar'15
I. EQUITY AND LIABILITIES
1 Shareholders Funds
a) Share Capital 11.71 11.71
b) Reserves & Surplus 169.28 114.49
180.98 126.19
2 Non-Current Liabilities
a) Long-term Borrowings - 19.17
b) Deferred tax liabilities 4.50 4.62
4.50 23.79
3 Current Liabilities
a) Short -term Borrowings - 7.07
b) Trade Payables 3.75 4.08
c) Other current liabilities 38.28 41.15
d) Short-term provisions 3.52 3.52
45.55 55.82
TOTAL 231.03 205.80
II. ASSETS
1 Non-Current assets
a) Fixed Assets
(i) Tangible assets 78.64 85.92
(ii) Intangible assets 0.00 0.01
(iii) Capital work-in-progress 2.12 0.77
b) Non-Current investments 88.18 76.75
c) Long-term loans and advances 1.37 2.50
2 Current Assets
a) Inventories 13.05 18.94
b) Trade Receivables 0.23 0.10
c) Cash and cash equivalents 34.05 9.64
d) Short-term Loans and Advances 7.07 2.26
e) Other current assets 6.31 8.92
60.72 39.86
TOTAL 231.03 205.80
Company showed a jump of 8.25% annually in balance sheet.
Page 9 Source: Company, www.dynamiclevels.com
Cash Flow
Cash Flow Statement for the year ended March 31 2016
Particulars Mar'16 Mar'15
A. Cash Flow From Operating Activities
Net Profit before tax 87.79 28.46
Adjustments For: 0.00 0.00
Depreciation 5.41 5.56
Interest 2.05 3.57
Indirect Taxes 898.46 728.23
Dividend Received 0.00 0.00
Interest Received -1.95 -0.50
Other Non-Operating Income -4.20 -1.86
Operating Profit before Working Capital Changes 987.57 763.46
Adjustment for:
(Increase)/Decrease in Trade and Other Received -2.34 10.23
(Increase)/Decrease in Inventories 5.89 -5.18
(Increase)/Decrease in Trade Payables -3.82 -3.80
Cash generated from Operations 987.30 764.71
Direct Taxes Paid 28.98 9.25
Indirect Taxes Paid 898.46 735.67
Net Cash from Operating Activities 59.86 19.79
B. Cash Flow from Investing Activities
Increase/Decrease in Fixed Assets 0.52 12.71
Increase in Investments -10.31 -27.78
Interest Received 1.95 0.50
Dividend Received 0.00 0.00
Other Non-Operating Income 4.20 1.86
Net Cash (used in)/ from Investing activities -3.64 -12.71
C. Cash Flow from Financing Activities
Increase/(Decrease) in Long Term Borrowing -19.17 3.51
Increase/(Decrease) in Short Term Borrowing -7.07 -
Interest Paid -2.05 -3.57
Dividend Paid -2.92 -2.34
Tax on distributed profits -0.60 -0.40
Net Cash(used in)/ from Financing activities -31.81 -2.80
D. Net Changes in Cash and Cash Equivalents (A+B+C) 24.41 4.29
E. Cash and Cash Equivalent at beginging of the period 9.64 5.36
F. Cash and Cash Equivalent at End of the Period 34.05 9.64
Company has a positive operating cash flow
Company has not made any big capital investment
Page 10 Source: Company, www.dynamiclevels.com
Peer Comparison
# INSTRUMENT Price Avg.
Volume
Market Cap (Rs.
in Cr)
1 GM
BREWERIES
649.45 78271 970
2 RADICO
KHAITAN
88.80 279955 1198
3 SOM DISTILLERIES
160.80 18269 446
4 UBL 726.60 743538 19649
Company has god average volume and market
capitalization this give liquidity to the share price
of stock.
# INSTRUMENT Price %
Pledged
% FII
Holding
P/E
Ratio (X)
1 GM BREWERIES 649.45 0 0 16.64
2 RADICO
KHAITAN
88.80 14.73 22.16 15.54
3 SOM
DISTILLERIES
160.80 0 0 29.48
4 UBL 726.60 19.69 16.98 66.66
FII does not hold any position right now in GM Breweries
but stock is trading at low PE multiple
# INSTRUMENT Price
Debt Equity
Ratio
(X)
Int.
Coverage
Ratio (X)
1 GM
BREWERIES
649.45 0.00 44.83
2 RADICO
KHAITAN
88.8 0.90 3.56
3 SOM
DISTILLERIES
160.8 0.51 13.48
4 UBL 726.6 0.38 9.05
GM breweries is a Zero Debt Company
SL INSTRUMENT 1M 3M 6M 1Y
1 GM BREWERIES -8.95 -17.03 -18.2 502.64
2 RADICO KHAITAN 0.61 -12.02 -18.69 5.44
5 SOM DISTILLERIES -8.35 -11.67 -16.52 -19.03
4 UBL -4.20 -7.6 -21.63 -19.45
GM Breweries was top performer in 1 year jumped 502%
stock from Rs. 100 low trading at Rs. 650.
Till 18th Aug 2015
Page 11 Source: Company, www.dynamiclevels.com
Shareholding Pattern
Shareholding Pattern Mar-16 Dec-15 Sep-15 Jun-15 Mar-15
Promoter and Promoter Group (%) 74.43 74.43 74.43 74.43 74.43
Indian 74.43 74.43 74.43 74.43 74.43
Foreign NIL NIL NIL NIL NIL
Institutions (%) 2.38 1.74 2.37 0.04 0.03
FII NIL NIL 2.33 NIL NIL
DII 2.38 1.74 0.04 0.04 0.03
Non-Institutions (%) 23.18 23.83 23.20 25.53 25.53
Bodies Corporate NIL NIL 1.03 1.60 2.25
Others 23.83 23.83 22.17 23.93 23.28
Custodians NIL NIL NIL NIL NIL
Total no. of shares (cr.) 1.17 1.17 1.17 1.17 1.17
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
http://www.gmbreweries.com
Ratio Analysis
Name Ratio
Current Ratio (x) 1.24
Quick Ratio (x) 0.98
Dividend Yield (%) 0.37
Interest Coverage Ratio (x) 44.83
Debt Equity Ratio (x) 0.00
Return On Asset (%) 53.59
Return On Equity (%) 32.21
# Announcement
Date Ex-Date Amount
Interim/
Final
1 05-Apr-2016 10-May-2016 2.50 Final
2 07-Apr-2015 08-May-2015 2.50 Final
3 03-Apr-2014 16-May-2014 2.50 Final
4 04-Apr-2013 26-Apr-2013 2.50 Final
5 03-Apr-2012 02-May-2012 2.50 Final
6 07-Apr-2011 02-May-2011 2.50 Final
7 07-Apr-2010 28-Apr-2010 2.00 Final
8 06-Apr-2009 27-Apr-2009 2.00 Final 9 04-Apr-2008 30-Apr-2008 2.50 Final
10 10-Apr-2007 03-May-2007 1.80 Final
Page 12 Source: Company, www.dynamiclevels.com
Investment Rationale
The company has a highest Market capitalization of 969.73 crs as Indian
Liquor Company.
Industry PE ratio for the sector is around 20, GM Breweries is trading at 16.64
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 212.93% 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. 2.50 every year per share.
The company has capacity to process 13.76 crore bulk litres of country liquor
per annum out of which only about 46.15 % 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 Breweries @ 645 with the target of 760
Page 13 Source: Company, www.dynamiclevels.com
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DYANMIC/its Associates/ Research Analyst/ his Relative have any financial interest in the subject company? No
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