The 5-year analysis of Globus Spirits Ltd's performance infers:
We analysed the performance of Globus Spirits Ltd share prices over the last 10 years. Here is what we found out:
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
The main promoter, A.K. Swarup & family have controlling stake (96.4%) in GSL through â€“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:
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:
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 â€˜impureâ€™ during the course of manufacture of Rectified Spirit and ENA, also known as â€˜headsâ€™, 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.
1998-99 Takes up work at Samalkha unit for conversion of molasses supplied by Panipat Co-operative Sugar Mills.
1999-2000 Commenced bottling of IMFL at Behror Unit in August, 1999; and Country Liquor at Samalkha Unit in December, 1999.
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.
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.