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Globus Spirits Ltd.

BSE: 533104 Sector: Consumer
NSE: GLOBUSSPR ISIN Code: INE615I01010
BSE 00:00 | 26 Nov 1154.35 -48.75
(-4.05%)
OPEN

1160.05

HIGH

1217.45

LOW

1145.80

NSE 00:00 | 26 Nov 1152.80 -47.80
(-3.98%)
OPEN

1180.00

HIGH

1217.00

LOW

1146.00

OPEN 1160.05
PREVIOUS CLOSE 1203.10
VOLUME 33358
52-Week high 1509.00
52-Week low 275.05
P/E 17.88
Mkt Cap.(Rs cr) 3,325
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1160.05
CLOSE 1203.10
VOLUME 33358
52-Week high 1509.00
52-Week low 275.05
P/E 17.88
Mkt Cap.(Rs cr) 3,325
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Globus Spirits Ltd. (GLOBUSSPR) - Chairman Speech

Company chairman speech

Dear Shareholder

This year has been an unprecedented and challenging year with the Covid-19 pandemicaffecting lives and businesses around the world. We are grateful that during this testingtime your company has emerged stronger and continued to deliver strong growth on the backof the commitment of the proficient team and support from all the stakeholders.

The first quarter of the fiscal saw a small disruption in our operations whichrecovered in the second quarter and remained strong for the rest of the year. In additionthe robust demand in consumer segment and firm bulk realizations boosted profitabilityduring the fiscal. Your Company's proactive steps towards changing market dynamics andvarious cost rationalization measures translated into commendable results during thefiscal. During the year under review your Company reported revenues (net of excise duty)of ` 1231 crores a growth of 5.3% over the previous year. EBITDA grew by 103% to reachRs.261 crores and net profit increased from Rs.50 crores in fiscal 2020 to

` 141 crores in fiscal 2021 translating into an EBITDA margin of

21.1% and net profit margin of 11.4%.

The Consumer segment which was morphing into an hourglass shaped market continues tohelp your Company with its strong presence in the mass market as well as the premiumsegments. Consumer segment share grew to ~43% during the fiscal ended 2021 compared to 35%in FY20. This helped drive up ROCE which came in at 29% as against 15% in FY20.

Despite the COVID-19 challenges our consumers have continued to support us with theirbrand loyalty helping us to grow the overall consumer segment volume by 11% year-on-year.

In addition the average value has also witnessed improvement on the back of betterproduct mix during the fiscal. Coming to our markets – Rajasthan where the newsegment of medium liquor continues to drive margins was a strong performer this fiscal.This was followed by Haryana where proactive steps of the Government to curb the illicitliquor trade has helped push demand into the organized segment. West Bengal is also seeinga recovery after Covid-19 led headwinds. Your company also re-entered Delhi market insmall scale during fiscal FY21 and will continue to make opportunistic sales in the state.Overall with the growth in rural India the Consumer business demand for IMIL willwithhold and witness resilient growth.

Premium segment consists of Unibev brands which has an established presence inPondicherry Karnataka Telangana Andhra in the South and West Bengal ChhattisgarhOdisha in the Middle and the East and Maharashtra Goa in the West. Amid pandemiccompetition has realigned their strategies and your company is in the same process. Goingforward your company will be making sharper choices with respect to prioritizinggeographies brands basis our right to win new profitability equations based on recentand expected excise policy changes and the required investments. On the trading sideUnibev primary sales for FY21 stood at 86.13% of the same period last year despite retailpoint of sale not operating fully and considering disturbed trading conditions due toincrease in excise duties by most of the states in the immediate wake of the pandemic.

Our secondary sale for the FY 20-21 stood at 88.85% of the same period last year. Inwake of a challenging trading environment your company is prudent with all ourinvestments on expansion. Super Premium product launch of Seventh Heaven blended with upto 21-Year-Old Scotch is on track and will be introduced in premium outlets in selectstates based on profits salience. Our vision to grow our premium segment business remainsconstant.

On the manufacturing segment of our business we are seeing positive structuralchanges. The Government of India's thrust towards ethanol blending will continue to drivedemand in the bulk alcohol segment. The Government of India has achieved remarkableresults in its ethanol blending targets during the fiscal and have advanced the blendingtarget of 20% to 2025 from 2030 earlier. This has created a new line of organic growth forthe Company.

To capitalize on this opportunity your Company has decided to undertake a strategicexpansion of its capacities with the setting up of a 140 KLPD at West Bengal with totalcapital outlay of Rs. 110 crores and is expected to be operational by Q3FY22. Your Companyhas also expanded the distillery capacity at Rajasthan from 140 KLPD to 160 KLPD and alsolooking to expand capacity in the states of Bihar by 140 KLPD and Jharkhand in the nextyear. This will take the overall distillery capacity from current 500 KLPD to 940 KLPD inthe next 2-3 years. During the fiscal a slew of cost efficiency measures coupled withstrategic growth initiatives helped your company generate healthy cash flows even during achallenging year. The cash generated from business has utilized towards strengthening ofBalance sheet both for funding capex as well as reduction of debt. The Company's totalgross debt has come down to Rs.176 crores in FY21. The finance cost has also reduced toRs.18 crores against Rs.23 crores in FY20 aided by lowering debt as well as cost of debt.These efforts have enhanced your company's profitability with the ROE improving to 24%from 11% in FY20.

Currently your Company is at the stage where there is a plethora of opportunities.Macro-economic growth from structural changes in market dynamics should thrive the demandgoing forward. The large vaccination drive shall also help the economies move rapidlytowards normalcy. In addition the new capacity additions and strong balance sheet islikely to take your Company to new heights going forward. With this I would like to takethis opportunity and thank all the employees and stakeholders for their support andpatience.

Sd/-
Chairman

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