Globus Spirits zooms 50% in a week on strong Q4 nos; stock hits new high

Between June 14 and June 17, Franklin Strategic Emerging Markets Fund IV sold 1.96 million shares, representing 6.8 per cent stake of Globus Spirits, through a bulk deals on the NSE

Shares of Globus Spirits hit a new high of Rs 584 after rallying 10 per cent on the National Stock Exchange (NSE) in intra-day trade on Friday. The stock has now zoomed 50 per cent in a week since reporting a more-than-doubled consolidated profit after tax (PAT) at Rs 50.63 crore in the March quarter (Q4FY21), on the back of strong revenue. It had PAT of Rs 19.35 crore in the year-ago quarter.

Globus Spirits is the largest grain-based ENA manufacturer in India with a capacity of 160 million litres. The company is a reputed IMFL (Indian-made foreign liquor) player. It has presence in Rajasthan, Haryana, Bihar and West Bengal.

In Q4FY21, the company’s gross revenue grew 66 per cent year on year (YoY) at Rs 491 crore, backed by increase in both volume and value, mainly in the consumer business segment. The share of consumer business (value segment) increased by around 900 basis points (bps) YoY from 35 per cent in Q4FY20 to 44 per cent in Q4FY21.

Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin grew by over 1140 bps YoY to 24.9 per cent in Q4FY21 from 13.5 per cent in Q4FY20, on account of higher share of consumer business, and better realizations on ENA (Extra Neutral Alcohol) and ethanol. The company said higher EBITDA margin coupled with lower finance cost drove profitability at 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 per cent stake of Globus Spirits, through a bulk deals on the National Stock Exchange (NSE). On Thursday, Old Bridge Capital Management Private Limited bought 725,701 shares via block deal.

According to analysts at ICICI Direct, Globus Spirits has been a beneficiary of the changing dynamics in the liquor space. The management has been at the forefront in capturing the opportunities. On the IMIL front, the company expects more premium price points in the value segment led by higher strengths (>40 per cent) in IMIL space (e.g. Rajasthan medium liquor) while on the ENA front, the management continues to expand its facilities in deficit states (to gain higher realisation and utilization levels). Hence, with higher revenues and elevated margins, free cash flow (FCF) yield is expected to remain high, the brokerage firm said in result update.

At 10:00 am, the stock was up 4 per cent at Rs 555 on the BSE, as compared to 0.68 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped 1.5 times with a combined 2.6 million shares changing hands on the NSE and BSE, so far.