Mehabe score: 8 G Factor: 7 Piotski Score: 9 The stock has a rating STRONG BUY. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 7 and Piotski score of 9.
Description
Globus Spirits Limited, established in 1992 is primarily engaged in the business of manufacture and sale of Indian Made Indian Liquor (IMIL), Indian Made Foreign Liquor (IMFL), Bulk Alcohol hand sanitizer, and Franchise Bottling. It has a unique 360⁰ model straddling across the entire alcohol value chain. It is the 1st to set up a grain distillery and launch branded DDGS in India.
Main Points
Milestones
It is the 1st to set up a grain distillery and launch branded Distillers Dried Grains with Solubles (DDGS) in India. #
It is the largest grain-based Extra Neutral Alcohol (ENA) manufacturer in India. #
It pioneered IMIL branding with the launch of India’s 1st ENA-based country liquor NIMBOO.Site:GLOBUSSPRMain Symbol:GLOBUSSPR
Stock trades at 739.0, above its 50dma 611.56. It also trades above its 200dma 419.3. The stock remains bullish on techicals
The 52 week high is at 783.00 and the 52week low is at 133.60
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– has delivered good profit growth of 69.59% CAGR over last 5 years
Weakness
– The company has delivered a poor sales growth of 11.74% over past five years.
Competition
– The industry trades at a mean P/E of 39.0x. United Breweries trades at the industry’s max P/E of 146.5x. GLOBUSSPR trades at a P/E of 12.0x
– Industry’s mean G-Factor is 4.1 while the mean Piotski score is 9.0. GLOBUSSPR has a G-Factor of 7 and Piotski scoreof 9.
– Average 1 month return for industry is 4.3%. The max 1- month return was given by Jubilant Inds.: a return of 25.07 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 371.0 cr compared to Rs 230.0 cr for period ended Jun 2020, a rise of 61.3%
Operating Profits reported at Rs 98.0 cr for period ended Jun 2021 vis-vis 39.0 for period ended Jun 2020 .
Operating Margins expanded 945.9 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 19.33 compared to Rs 17.58 for previous quarter ended Mar 2021 and Rs 6.5 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1371.0 cr for period ended TTM vis-vis sales of Rs 1231.0 cr for the period ended Mar 2021, a healthy growth of 10.2%. The 3 year sales cagr stood at 11.6%.
Operating margins expanded to 23.0% for period ended TTM vis-vis 21.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 178.0 cr for period ended TTM vis-vis sales of Rs 141.0 cr for the period ended Mar 2021, rising 20.8%.
Company recorded a healthy Net Profit CAGR of 95.0% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 148.0 cr for period ended Mar 2021 vis-vis Rs 135.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 27.0% compared to 16.0% over the last 3 Years. – The stock has given a return of 450% on a 1 Year basis vis-vis a return of 79% over the last 3 Years. – The compounded sales growth on a TTM bassis is 24% vis-vis a compounded sales growth of 13% over the last 3 Years. – The compounded profit growth on a TTM basis is 189% vis-vis a compounded profit growth of 190% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 1.47% vis-vis 0.83% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 41.63% vis-vis 43.04% for Mar 2021
Conclusion
– has reduced debt.
– has delivered good profit growth of 69.59% CAGR over last 5 years – The company has delivered a poor sales growth of 11.74% over past five years.
Fundamentally, the stock remains a Strong ‘BUY’ in our long term portoflio.
Technically too, the stock is a Strong ‘BUY’ in our long term portoflio.The stock remains above its 50 DMA 611.56 and is trading at 739.0
Thus, overall, we retain a STRONG BUY on the stock. Any dips can be used to build positions.
