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Globus Spirits Ltd. Stock Analysis

Small Cap
Evaluated by 1246 users | BSE: 533104 | NSE: GLOBUSSPR |
Breweries & Distilleries
Globus Spirits (GSL) was originally incorporated as Globus Agronics Limited on February 16, 1993 with the Registrar of Companies, Delhi & Haryana, and obtained the Certificate of Commencement of Business on March 19, 1993. The name of the Company was subsequently changed to Globus Spirits...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 19.32%14.55%9.79%3.49%3.46%4.3%4.4%3.99%7.69%11.76%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 3875075024975867077748559841,163
Y-o-Y Gr. Rt.-31.2%-1%-1.1%18%20.7%9.6%10.4%15.1%18.2%
Adjusted EPS (Rs.) 17.2917.8514.853.672.294.245.372.2410.5720.56
Y-o-Y Gr. Rt.-3.2%-16.8%-75.3%-37.6%85.2%26.7%-58.3%371.9%94.5%
Book Value per Share (Rs.) 90.6107.54120.48120.69123.29126.23129.27131.73142.37162.81
Adjusted Net Profit 39.841.134.28.46.612.215.56.530.559.2
Net Op. Cash Flow (Rs. Cr.) 46.296.978.633.960.675.371.455.861.3154
Debt to Cash Flow from Ops 1.051.11.1132.383.363.814.513.751.15
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Globus Spirits Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 13%14.7%14.5%18.2%
Adjusted EPS 1.9%55.1%56.4%94.5%
Book Value per Share 6.75.7814.4
Share Price 12.9% 32.8% 34.2% 119.1%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 21.4918.0111.432.411.873.44.21.727.7113.47
Operating Profit Margin (%) 16.6914.6914.019.18.359.897.188.129.5711.44
Net Profit Margin (%) 10.288.16.811.71.131.7320.763.095.09
Debt to Equity 0.230.430.250.290.410.70.730.660.560.38
Working Capital Days 7576103111797368826852
Cash Conversion Cycle -30-10-9-16-12-15-412
Entity Percentage Holding
Promoters 55.88%
Institutions 1.61%
Non-Institutions 42.50%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)
Data is not available for this company.

The 5-year analysis of Globus Spirits Ltd.'s performance infers:

Globus Spirits Ltd. earnings have grown by 55.1%, whereas share price has appreciated 32.8% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Globus Spirits Ltd. share prices over the last 10 years. Here is what we found out:

Globus Spirits Ltd. share price has appreciated 5.6% annually over the past ten years.

Globus Spirits (GSL) was originally incorporated as Globus Agronics Limited on February 16, 1993 with the Registrar of Companies, Delhi & Haryana, and obtained the Certificate of Commencement of Business on March 19, 1993. The name of the Company was subsequently changed to Globus Spirits Limited vide a fresh Certificate of Incorporation obtained on January 23, 2007 from the Registrar of Companies, Delhi and Haryana at New Delhi.

The main promoter, A.K. Swarup & family have

Globus Spirits (GSL) was originally incorporated as Globus Agronics Limited on February 16, 1993 with the Registrar of Companies, Delhi & Haryana, and obtained the Certificate of Commencement of Business on March 19, 1993. The name of the Company was subsequently changed to Globus Spirits Limited vide a fresh Certificate of Incorporation obtained on January 23, 2007 from the Registrar of Companies, Delhi and Haryana at New Delhi.

The main promoter, A.K. Swarup & family have controlling stake (96.4%) in GSL through –Chand Bagh Investments Ltd (CBIL), an investment company. The other major group companies are : Associated Distilleries Ltd., Rajasthan Distilleries Ltd. and Northern India Alcohol Sales Ltd. After the placement of the IPO, the promoters group is likely to have 59.8% holding in the company, while the stake of Indian public will be 38%.

GSL is engaged in the business of manufacture, marketing and selling of Industrial Alcohol (comprising RS and ENA), CL and IMFL. The company has a well established position in domestic CL segment with significant market share (22%, 17% and 20% share in Rajasthan, Haryana and Delhi respectively) and has made its presence in IMFL segment by taking up contract bottling to cater to the renowned Indian players. GSL sells CL under major brands namely Rana, Chandni and Samalkha No. 1. The Company has also launched its own brands in growing IMFL segment namely Samurai Gold Whisky, White Lace Gin, White Lace Vodka and Hannibal Rum in seven states and is likely to cover three more states by March 2010.

The IMFL segment is currently captured by large players of the industry. Gross sales increased at a CAGR of around 48 % over the last three years with a year on year (yoy) growth of 19.5% in FY 09, mainly on account of higher Average Gross Sale price Realisation (AGSPR) of RS and ENA in FY 09 due to higher Average Purchase Price (APP) of raw material in FY 09 over FY 08. GSL has a running contract with BDA Ltd for bottling their IMFL brands and also has tie-ups with brand leaders like UB Group, BDA Ltd. & Jagatjit Industries for sale of ENA.

The distribution of CL and IMFL is through the supply to govt. controlled agencies or private agencies (who ultimately cater to the need of the retailer) With the regulations relating to illicit liquor becoming stringent, GSL gained strong market presence in Haryana, Rajasthan and Delhi during the last few years by launching branded CL (accounts for a major proportion of sales for GSL).

GSL is, implementing projects comprising expansion cum modernisation of capacity (from 288 lakh BL to 498 lakh BL per annum), setting up of new CPP, revamping IMFL bottling section and brand launching for IMFL, at an aggregate project cost of Rs. 89.3 crore with the project debtequity ratio being 0.16 : 1. The Company has already incurred Rs. 16.2 crore on the projects (entirely out of internal accruals) and the projects, in entirety, are expected to be completed by Mar, 2010.

The company has invested in two world-class distilleries located at:

  • Behror, Distt: Alwar, Rajasthan
  • Samalkha, Distt:Panipat, Haryana

Both these units can be counted amongst the largest distilleries in the country. The plants are currently engaged in the manufacturing of Industrial Alcohol (comprising Rectified Spirit, Denatured Spirit and Extra Neutral Alcohol (ENA); Country Liquor (CL); and Indian Made Foreign Liquor (IMFL).

These units have their own captive supply of water and power which puts them in a position of strength. At present our units are capable of manufacturing Alcohol from molasses & grains. Both the units have licensed and installed capacity each of 1,44,00,000 BL per annum.

The company is in the process of enhancing its capacity of Industrial Alcohol to 243,00,000 BL per annum. The total capacity after expansion in both the factories will be 486,00,000 Bl per annum. The distilleries have a modern bottling facility equipped with the best bottling machines.

Product range of the company includes:

IMFL

  • White Lace Gin White Lace Dry Gin
  • White Lace Duet Gin GR 8 Times Dry Gin Samurai Gold Extra Rich Blend Whisky
  • Samurai Premium Whisky 20-20 Premium Whisky
  • 20-20 Superior Whisky *
  • GR 8 Times Whisky
  • GR 8 Times XXX Rum
  • Hannibal Legendry RumHannibal Legendry XXX Rum *
  • Samurai XXX Rum
  • Samurai Grape Brandy
  • Samurai Superior Grape Brandy *
  • Samurai Superior Whisky *
  • Academy Deluxe XXX Rum
  • Academy Deluxe Brandy

Country Liquor

  • Rana
  • Rajasthan No.-1
  • Ghoomar
  • Samalkha No.-1
  • Samalkha Ki Saunfi
  • Kinnu
  • Commander

Other Operations of the company:

Extra Neutral Alcohol (ENA)-  It manufactures and supplies ENA to other IMFL manufacturers, pharmacies and perfumeries etc.

Rectified Spirit- Rectified Spirit is used for the manufacture of branded Country Liquor. It is also used for conversion into ENA. Surplus Rectified Spirit, if any, is sold in the market to Country Liquor and IMFL manufacturers.

Denatured Spirit - Spirit which is collected as ‘impure’ during the course of manufacture of Rectified Spirit and ENA, also known as ‘heads’, is sold to various industrial manufacturers of paints and chemicals.

Country Liquor - The company has a market share of about 25% in Haryana (through affliate company), 26% in Rajasthan, 28% in Delhi (partially through affiliate company), and 15% in Chandigarh.

Milestones:

1994-95

  • First Distillery set up; commenced production of Ethyl Alcohol in April 1994 at Samalkha Unit, Haryana. Unit was set up with an installed capacity of 144 lakh BL per annum.
  • Purchase of land at Village Shyampur, Tehsil Behror, District Alwar, Rajasthan for setting up a Distillery unit for manufacturing 40,000 Bulk Litres of Rectified Spirit and 20,000 Bulk Litres of Extra Neutral Alcohol per day.
  • The company acquired 18 acres of land in village Shyampur in Behror, Rajasthan.

1995-96

  • Sets up second Distillery unit at Behror, Rajasthan; Unit commissioned.
  • Authorised Share Capital increased from Rs. 5 crores to Rs. 10 crores.
  • Bonus issue to existing shareholders in the ratio of 12 equity shares for every 10 equity shares held.
  • Enters into agreement with International Distilleries (India) Ltd. – a subsidiary of International Distillers and Ventures, UK, to bottle IMFL products under the brand name of ‘IDI’.

1996-97

  • During the year Behror Unit also started production. The sale was Rs. 5092.12 lakhs with a profit after tax of Rs. 278.42 lakhs. The Company has also exported alcohol to the tune of Rs. 4221.54 lakhs during the year.

1998-99 

  • Takes up work at Samalkha unit for conversion of molasses supplied by Panipat Co-operative Sugar Mills.
  • The company has started production of IMFL at its Behror unit under the brand name of Rajputana.

1999-2000

  • Commenced bottling of IMFL at Behror Unit in August, 1999; and Country Liquor at Samalkha Unit in December, 1999.

2000-01

  • Haryana State Pollution Control Board on 29.8.2000 orders closure of distillery unit at Samalkha for alleged non-compliance of pollution requirements.

2001-02

  • Haryana Pollution Control Board orders start of Bottling of Country Liquor at Samlakha unit on 17.8.2001.
  • Bottling at Samlakha Unit starts w.e.f 23.3.2002 after clearance by Hon’ble High Court of Punjab & Haryana on issues raised by State Excise Department.

2003-04

  • Enters into agreement on 26.7.2002 with Hi-Life Impex Pvt Ltd (Hi-Life) for use of Trademarks in respect of Ready to Drink Beverages (RTDB) and manufactures the same under technical know-how from Hi-Life.
  • Commercial production of RTDB starts from 27.9.2003.

2004-05

  • Sets up Effluent Treatment and Environment friendly Bio-Composite Plant and entire plant and machinery repaired in order to start the Distillation plant at Samalkha Unit.

2005-06

  • Distillation Plant commences operation at Samalkha Unit in April, 2005.

2006-07

  • Authorised Share Capital increased from Rs. 10 crores to Rs. 15 crores.
  • Name of the Company changed from Globus Agronics Limited to Globus Spirits Limited with effect from 23.1.2007.

2007-08

  • Authorised Share Capital increased from Rs. 15 crores to Rs. 25 crores.
Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323

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