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Globus Spirits shares hit a new high of Rs 584 after rising 10% on the National Stock Exchange (NSE) in intraday trading on Friday. The stock is now up 50% in a week since posting consolidated profit after tax (PAT) more than doubled to Rs 50.63 crore in the March quarter (T4FY21), thanks to strong earnings. He had a PAT of Rs 19.35 crore in the quarter of last year.
Globus Spirits is the largest cereal-based ENA manufacturer in India with a capacity of 160 million liters. The company is a renowned player in the IMFL (Foreign Liquor of Indian Manufacture). It is present in Rajasthan, Haryana, Bihar and West Bengal.
In the fourth quarter of fiscal 21, the company’s gross revenue increased 66% year-on-year (YoY) to Rs 491 crore, supported by an increase in both volume and value, mainly in the consumer business segment. The share of consumer activities (value segment) increased by around 900 basis points (bps) year-on-year, from 35% in Q4FY20 to 44% in Q4FY21.
The EBITDA margin (earnings before interest, taxes, depreciation and amortization) increased by more than 1,140 basis points year-on-year to 24.9% in Q4FY21 from 13.5% in Q4FY20, due to a higher share high consumption activities and better achievements on ENA (Extra Neutral Alcohol) and ethanol. The company said the higher EBITDA margin coupled with lower finance costs resulted in profitability at the PBT (profit before tax) level.
Meanwhile, between June 14 and June 17, Franklin Strategic Emerging Markets Fund IV sold 1.96 million shares, representing 6.8% stake in Globus Spirits, through National wholesale operations. Stock Exchange (NSE). Old Bridge Capital Management Private Limited bought 725,701 shares on Thursday through a block deal.
According to analysts at ICICI Direct, Globus Spirits has benefited from the changing dynamics in the alcoholic beverages sector. Management has been at the forefront to seize opportunities. On the IMIL front, the company expects more high prices in the value segment thanks to higher forces (> 40%) in the IMIL space (e.g. Rajasthan Medium Alcohol ) while on the ENA front, management continues to expand its deficit states facilities (to achieve higher levels of achievement and use). Therefore, with higher revenues and higher margins, the return on free cash flow (FCF) is expected to remain high, the brokerage firm said in the results update.
At 10:00 am, the stock was up 4% to Rs 555 on BSE, compared to a drop of 0.68% in S&P BSE Sensex. Over-the-counter trading volumes have increased 1.5 times with a total of 2.6 million shares changing hands on the NSE and BSE, so far.
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