Globus Spirits slumps 13% on weak Q2 results; stock tanks 59% in 10 months

Its Q2 earnings before interest, taxes, depreciation, and amortization (ebitda) was down 47.4 per cent YoY and 33.2 percent QoQ at Rs 47 crore

Shares of Globus Spirits slumped 13 per cent to hit a fresh 52-week low of Rs 700 on the BSE in Tuesday’s intra-day trade as the company reported a weak set of numbers for the quarter ended September (Q2FY23).

The stock of the breweries & distilleries company has fallen below its previous low of Rs 766.05 touched on October 26, 2022. In the past 10 months, it has tanked 59 per cent from a level of Rs 1,720. It had hit a record high of Rs 1,760 on January 14, 2022.

Globus Spirits is primarily engaged in the business of manufacturing and sale of Indian made Indian liquor (IMIL), Indian made foreign liquor (IMFL), bulk alcohol, hand sanitizer and franchise bottling.

The company’s current brands include Governors Reserve Premium Grain Whisky, Governors Reserve 100 per cent Finest Grain Whisky, Oakton Barrel Aged Rare Finest Grain Whisky, Laffaire Napolean Premium French Blended Grape Brandy and Terai Craft Gin.

In Q2FY23, Globus Spirits’ profit after tax declined 57.9 per cent year-on-year (YoY) and 40.7 per cent quarter-on-quarter (QoQ) to Rs 22.10 crore due to higher operational costs. However, net revenue from operations was up 25.7 per cent YoY and down 3.7 per cent QoQ at Rs 480 crore.

The earnings before interest, taxes, depreciation, and amortization (ebitda) was down 47.4 per cent YoY and 33.2 percent QoQ at Rs 47 crore. The EBITDA margin stood at around 10 percent against 23 percent in Q2FY22 and 14 per cent in Q1FY23.

The company said the margin was lower on account of lower operating leverage due to lower share of higher margin. Bulk Spirits range- cost push has been mitigated to better ethanol and ENA realization rate. The softening of market share in Haryana & change of business mix Rajasthan in Q2 impacted profitability, it said.

Meanwhile, Globus Spirits said the Jharkhand Greenfield project, which commenced commercial production in September 2022, adding incremental capacity of 140 KLPD, is likely to operate at optimum utilization in Q2FY23. The inflationary pressure on input (grain and fuel) costs is expected to soften with the new crop season, aiding profitability, it said.