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Som Distilleries & Breweries Ltd.

BSE: 507514 Sector: Consumer
NSE: SDBL ISIN Code: INE480C01012
BSE 00:00 | 19 Feb 103.85 0.80
(0.78%)
OPEN

104.30

HIGH

104.70

LOW

102.00

NSE 00:00 | 19 Feb 103.80 2.35
(2.32%)
OPEN

103.90

HIGH

104.95

LOW

100.40

OPEN 104.30
PREVIOUS CLOSE 103.05
VOLUME 2219
52-Week high 170.90
52-Week low 99.25
P/E 16.33
Mkt Cap.(Rs cr) 337
Buy Price 102.30
Buy Qty 100.00
Sell Price 104.70
Sell Qty 40.00
OPEN 104.30
CLOSE 103.05
VOLUME 2219
52-Week high 170.90
52-Week low 99.25
P/E 16.33
Mkt Cap.(Rs cr) 337
Buy Price 102.30
Buy Qty 100.00
Sell Price 104.70
Sell Qty 40.00

Som Distilleries & Breweries Ltd. (SDBL) - Chairman Speech

Company chairman speech

Dear friends and fellow shareholders

It is my pleasure to address you all and update about the business performance for theyear and various strategic initiatives undertaken by us which will form the base for ourfuture growth.

The global economic activity softened during the latter part of the year due to variousgeo-political issues country specific challenges in larger economies and financialtightening. However economic activity is expected to pick up in the second half of 2019driven by significant policy accommodation by major economies. Despite being the fastestgrowing economy India's growth rate slowed down during the fiscal year led by subduedmanufacturing activity lower exports and global trade uncertainty. The Indian economy isexpected to accelerate in 2019 driven by continued recovery of the investment activity androbust domestic consumption. The Indian Government has also undertaken various reforms tostrengthen financial sector which are essential to secure the economy's growth prospects.

In FY2019 we recorded beer volume of 75.9 lakh cases which is an increase of 1.2%compared to same period last year. Our IMFL volumes increased by 29.8% compared to FY2018to reach 9.7 lakh cases. Our flagship brand ‘Hunter' registered a growth of 7.9%compared to FY2018 to reach a volume of 32.5 lakh cases. This growth reinforces thequality of our product portfolio and our capability to market it as premium product. OurTotal Income for the year was Rs. 3967 million representing an increase of 12.5% overFY2018. FY2019 EBITDA was Rs. 528 million with a margin of 13.3%. Our margins for the yearwere predominantly impacted due to higher costs pertaining to new glass bottles employeeand freight costs to target new markets. These cost pressures can be attributed to theexpansion that we have undertaken in the last fiscal year and are transitionary in nature.

FY2019 was an eventful year as we undertook various measures to secure future growthpotential of the Company. During the year we started operation of our Karnataka and Odishaplants which has enabled us to enhance our presence in the existing markets and to laystronger foundation in the new markets. During the year we also started investment fordoubling the capacity of the Bhopal plant based on the opportunities that we foresee fromthe neighbouring states. Our Karnataka subsidiary has already started generating profit inthe first year of its operation and we anticipate Odisha subsidiary also to turn cash flowpositive in its first year of operation. In FY2020 we expect a meaningful contributionfrom both these subsidiaries resulting in increased turnover and improvement inprofitability.

Along with focus on growth and pan India presence of the Company we also ensured thatthe strength of the balance sheet is maintained to ensure sustainability. The rating ofour debt facilities by ICRA and Brickworks is a testament to our balance sheet strength.During the quarter Brickworks upgraded ratings on our fund-based facilities from‘Triple B' to ‘Triple B+' and non-fund based facilities from ‘A3' to‘A2'. ICRA has also rated our fund based and non-fund based facilities ‘TripleB+' and ‘A2+' respectively. Both the agencies have provided a stable outlook andhave indicated upgrading it to ‘Positive' outlook with improvement in profitabilityand scale.

We believe that the Company is currently at an inflection point and sufficientinvestment has already been made to enable the Company to be prepared for the next phaseof growth. FY2019 was the year of investments and FY2020 will be a year of consolidationand reaping benefits of these investments. On the back of a strong demand pull for ourproducts across markets and initiatives undertaken during the last year we are confidentof a robust financial performance and enhancing shareholders value.

Before closing I would like to express my deepest gratitude to all the stakeholderswho have striven to make our journey a success. I would like to thank all of you for yourrelentless support that renews our belief in ourselves and our potential to be more.

Warm Regards

J.K. Arora

(Chairman and Managing Director)