G M Brew
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 30th Sept 2014 stands at 74.43%.