A look at the detailed sales breakup in the FY2018 annual report, page 55, will indicate to an investor that out of every ₹100/- of sales, the company has to pay about ₹72/- to the govt authorities as indirect taxes (state excise duty: 45% and value-added tax: 27%). Therefore, we believe that investors should ask for details of these investments from the company for further analysis. The company mentioned that it had to take a hit on its profits to maintain its sales, which seems a direct result of the competition among country liquor manufacturers. Weakness - Analyse stocks based on their strengths, weakness, opportunities, and threats. “Peaceful Investing” approach is the result of my experience of more than a decade in stock markets. Roadside assistance provided by Allstate. However, investors should do their own analysis before taking any investment related decision about the company. The Chairman takes about 1.32 Crore per annum in salary, which is 1.8% of net profit. Company Analysis: Vol. or medium without express writtern permission of moneycontrol.com is prohibited. The company seems to have utilized this FCF to repay the existing debt, meet interest expense, pay dividends etc. As a result, its profitability has suffered. generated a total cash flow from operations (CFO) of ₹317 cr and it did a capex of ₹144 cr over the years to grow its revenues from ₹210 cr in FY2009 to ₹426 cr in FY2018. Mr. Andrew Cowan was appointed Group Managing Director & CEO in July 2016. rectified spirit throughout the year which had to be absorbed by the Company to a major extent to maintain the sales volumes. In the absence of any strength in the business model of the company, a low PE ratio of the company’s stock may be signs of a value trap where instead of being a bargain; the low valuation of the stock price may represent the poor business dynamics of the company. GM BREWERIES LTD, Aims to provide the finest quality country liqu.. Buy: 515: 707: 37.3: 8-Apr-16 KR Choksey: GM Breweries Ltd. reported strong Q4FY16 results with Net revenue.. Learn about our stock analysis approach in the e-book: Read more company analysis in the e-book series: We have used the financial data provided by screener.in and the annual reports of the companies mentioned above while conducting analysis for this article. Read on: How to Assess Operating Efficiency of Companies. Therefore, an investor would note that the company might find it difficult to keep its profitability levels at high levels in future. It also impacts the calculation of cumulative capital expenditure (capex) over the years as the resultant decline in fixed assets, on an overview, presents itself similar to the sale of assets (liquidation/negative capex). In the past, the company has been reporting only net sales excluding these indirect taxes in the profit and loss statement. I am registered with SEBI as an Investment Adviser under SEBI (Investment Advisers) Regulations, 2013. FII have raised their shares from 1.33% to 2.19%. He has not taken any remuneration in 2018. Upon reading the SSGR article, an investor would appreciate that if a company is growing at a rate equal to or less than the SSGR and it is able to convert its profits into cash flow from operations, then it would be able to fund its growth from its internal resources without the need of external sources of funds. In case of GM Breweries Ltd, over the years, the company has not been able to pass on the prices increases of key raw materials like rectified spirits. Company profile page for GM Breweries Ltd including stock price, company news, press releases, executives, board members, and contact information 2014 -GM Breweries Ltd has recommended a dividend on equity shares @ 25% i.e. If later on, the stock prices increase, then the investor is happy as she is now wealthier. See participating dealer for limited warranty details. This is not understandable as with a decrease in expense there should be an improvement in OPM. See the complete profile on LinkedIn and discover Salifu’s connections and jobs at similar companies. You may use the following steps to analyse the company: “Selecting Top Stocks to Buy – A Step by Step Process of Finding Multibagger Stocks”, Learn detailed fundamental analysis by reading case studies in these e-books:​, 1. How to do Business Analysis of Companies, How to do business analysis of any company, How to find margin of safety for any company, How to find the self sustainable growth rate (SSGR) of any company, How to assess the operating performance of any company, 5. G.M. Increase in ITR indicates an improvement in the efficiency of inventory utilization over the years. However there was a decline in profits due to abnormal rise in the price of its main raw material i.e. Blended with the best Orange flavours.Widely preferred by the consumers for its organoleptic taste and aroma. To register for the “Peaceful Investing” workshop to be held in Mumbai on July 29, 2018: To learn our stock investing approach “Peaceful Investing” by videos, you may subscribe to, To download our customized stock analysis. Notify me by email when the comment gets approved. It has been important in making my foundation of stock investments. After 10 years, the company is still facing this challenge. whereas during the same period, it reported a cCFO of ₹317 cr. G M Breweries Limited is a Public incorporated on 09 December 1981. GM Breweries was incorporated in the year December 1981. It is primarily from interest and dividends, which suggest that it has largely invested in FD and MF. An investor would appreciate that if a company collects all the money from its customers upfront but receives a credit period from its suppliers/vendors, then effectively, the suppliers are funding the inventory of the company. This decrease in OPM is seen despite a decrease in raw material, employee/selling and admin/Power and fuel expenses. Simple steps to analyse management quality of any company, How Promoters benefit themselves using Related Party Transactions, How to Identify if Management is Misallocating Capital, How Promoters use Loopholes to Inflate their Shareholding, How to identify Promoters extracting Money via High Salaries, How to know if Promoters are Losing Commitment to the Company, Why We cannot always Trust What Management Claims, How to understand warrants issued to promoters, How to interpret pledging of shares by promoters, 6. The data range used to generate this report is between 15-10-2010 and 12-10-2020. The company faces competition in its key market segment of country liquor. As a result, in FY2018 annual report, the company has reported its sales including various indirect taxes like state excise duty, value added tax (VAT) etc. Over FY2009-18, GM Breweries Ltd reported a total cPAT of ₹279 cr. However, we recommend that an investor may read the following articles to assess the PE ratio to be paid for any stock, takes into account the strength of the business model of the company as well. However, the company is paying fixed remuneration to the individuals based on the responsibility and position and the company has no policy of paying incentive/ bonus based on company’s performance. We can say in approx. Gm Breweries Limited - Technical chart. See fundamentals, technicals, peer comparison, shareholding change. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol.com is prohibited. As a result, the NFAT of the company over the years may not be comparable over the years. GM breweries has more than the average industry CAGR of 22%. Thank you for all your blog and articles. However, the company has not provided further details about the names of the mutual funds, tax-free bonds, preference shares and equity shares where it has invested this money. G M Breweries Ltd.-GMBREW, BSE:507488 Latest news, stock scores, research reports and price movements. When looking at its milestones above, it has not done any wonders – no new expansion/no new brands launching. The company is engaged in the manufacture of alcoholic liquor. Kingfisher is an Indian beer brewed by United Breweries Group, Bangalore.The brand was launched in 1978. SWOT analysis is a powerful tool for understanding a company’s market position. How to do the Financial Analysis of Companies, How to do financial analysis of any company, How to understand the cash flow from operations (CFO), How Companies Manipulate Cash Flow from Operating Activities (CFO), How to understand capitalization of interest & other expenses, 4. Further advised reading: How to do Business & Industry Analysis of a Company. They are currently in the age bracket of about 50-60 years. This amount to the creation of a wealth of about ₹6 for every ₹1 of earnings retained by the company. Conversely, if any company was attempting to grow its sales at a rate higher than its SSGR, then its internal resources would not be sufficient to fund its growth aspirations. Investors may also ascertain whether the company and the auditors are able to appropriately conduct all the required procedures needed for flawless account preparation and their subsequent audit before disclosing the audited financial results of the full financial year to the shareholders within three working days from the end of financial year. An investor may refer to the following article to understand more about the situations in which a company may be able to report a lower cCFO when compared to its cPAT and vice versa: Further advised reading: Understanding Cash Flow from Operations (CFO), Read on: Self Sustainable Growth Rate: a measure of Inherent Growth Potential of a Company. Sales have grown since 2010 up to 18% recently, with one major spike of 277% in 2017. In fact, I am into stock market since a year. In the case of GM Breweries Ltd, the company has frequently changed the classification of its investment in property between the capital work in progress (CWIP) and non-current assets. The company is engaged in the manufacture of alcoholic liquor. Address , contact numbers, contact details of CIO , Chief Finance Officer CFO, HR Head, Sales Head, Purchase Head, Admin Head, Marketing Head or Manager also available. The company’s overall turnover increased by 18.32% while the increase in the median remuneration was 9.55%. Why management analysis is the most important in stock investing? The inventory turnover ratio (ITR) of the company has been varying year on year. This indicates that the company has been making good use of its assets. Spirits sales in India was 293 million cases in the year 2016 and is expected to reach 363 million cases by 2021. Moreover, while analysing the detailed notes to the financial statement of the FY2014 annual report, at page 27, the investor notices that the non-current investments have increased during the by about ₹46 cr on account of investment in property. G.M. This is because the employee motivation is essential for future growth of any company. This article provides in depth fundamental analysis of GM Breweries Ltd, an Indian country liquor manufacturer, focusing on the Mumbai & Thane markets in Maharashtra. It would have been a very efficient execution by the teams of employees of the company to accurately ascertain the exact stock, payments due including any disputes within three working days. I could not find any controversy and frauds. So need of expansion for at least 5 yrs. The company has been able to use its assets efficiently and as a result, it has been able to grow using its business profits. A sudden spike in sales can be due to banning of poisonous cheap alcohol in Maharashtra, which might have led to an increase in sales of country liquor. In case of GM Breweries Ltd, over the years, the company has not been able to pass on the prices increases of key raw materials like rectified spirits. Rs. Salifu has 1 job listed on their profile. If all is well and it gives 20% return annually (eps growth 13-15% and funds return 5-7%), then it will take 10 years to convert 135 Rs to 1000 Rs. With a market share of over 36% in India, it is also available in 52 other countries. DII have raised their shares from 0.06% to 0.09%. Gmbrew financial results, Gmbrew shareholding, Gmbrew annual reports, Gmbrew pledge, Gmbrew insider trading and compare with peer companies. Investors would appreciate that preparation of annual account within three working days (April 2, 3 and 4, 2018) is a very quick performance for a company, which has the gross sales of about ₹1,600 cr including more than thousand crores of tax liabilities, inventory distributed over distribution channel, 171 total employees, and vendor assessments etc. The company highlighted this constraint to the shareholders in its FY2010 annual report, page 8. The efficient collection of receivables and inventory management also becomes evident when an investor compares the cumulative net profit after tax (cPAT) and cumulative cash flow from operations (cCFO) of the company over the years. All Rights Reserved, This article provides in depth fundamental analysis of, It uses rectified spirit as RM. The net profit margin (NPM) of the company has followed the trend of the OPM over the years. www.asahisuperdry.com. The total salary of six peoples (1 Chairman, 2 WTD, 3 Independent directors) is eight Crores. A company may also face fluctuating OPM in cases where the prices of the products are regulated and the company may not change them as per its will. During your powertrain limited warranty period, 6 years or 100,000 miles from new vehicle delivery, whichever comes first. Further advised reading: Why Management Assessment is the Most Critical Factor in Stock Investing? Advised reading: Analysis: Globus Spirits Ltd. G.M. The company has demonstrated the ability to grow without putting the burden on the financial resources, good working capital position, ability to pay dividends from business profits and generate surplus cash. IMPORTANT: You MUST do a search on Google and on our website to find answer to your query before writing it here. The company has demonstrated the ability to grow without putting the burden on the financial resources, good working capital position, ability to pay dividends from business profits and generate surplus cash. In FY2012, John William Almeida who seems brother of Jimmy William Almeida resigned from the company, thereby ceding full control of the company to Jimmy. used to get the information. It also contains the Live Stock Price and Volume, 52 Week High Low, Bid and Offer Price and Volume, Intraday and Historical Price Chart. GM Breweries view the rights issues of various companies, rights history, face value, premium, record date, ex-rights date. The company highlighted this constraint to the shareholders in its FY2010 annual report, page 8. Reproduction of news articles, photos, videos or any other content in whole or in part in any form Currently, however, the company is accumulating much of its profit in financial assets. As per 2016, 66% of Indian population is in legal drinking age and it is expected to rise to 68% in 2021. In case, anyone observes that the reader has copied/used plagiarized content, then we would request you to highlight it to us and we would be happy to take down that content from the article. Copyright © e-Eighteen.com Ltd. All rights reserved. rectified spirit, How to do Business & Industry Analysis of a Company, high level of fluctuations in the prices of its main raw material. If with its current 135 Rs, its Market price is Rs 1000, after 10 years with more grown eps and funds its price can be expected much higher, provided all is going well. Investors may also contact the company about the details of non-current investments, the property taken by the company on rent from directors, steps taken by the company to keep the employees motivated in the absence of bonus linked to business performance. Currently, 49.20% is in use, which means it will not require expansion for at least 5 yrs. Let us analyse the financial performance of GM Breweries Ltd. Therefore, it becomes essential that an investor adjust the reported sales data in the publically available historical data so that she compares the net sales of every year in her analysis. Advised reading: How should investors contact Companies/Management for clarifications or additional information? This will help her in improving her stock analysis skills. Currently, I do not own stocks of the companies mentioned above in, We identified companies, which were later invested by. As per FY2018 annual report, page 62, the company has been paying ₹2 cr as rent to one of the directors, which is a related party. The high level of fluctuations in the prices of its main raw material namely Rectified Spirit and as well as acute shortage in the availability of Spirit are the constraints faced by the Company during the past several years. Asahi Breweries, Ltd. Production and sales of beer, happoshu (low-malt beer), sho-chu, chu-hi, spirits, and wine. All comments are moderated. It is the largest manufacturer of country liquor in Maharashtra. We believe that going ahead; investors should monitor the profit margins of the company, signs for management succession planning and any deterioration in receivables days. Issued shares = 14,622,000. It became a deemed public limited company in Aug.'90. g m breweries ltd. ground floor, ganesh niwas veer savarkar marg, prabhadevi mumbai 400025 p: +9122.24331150 f: +9122.24229922 In order to benefit the maximum from this article, an investor should focus on the process of analysis instead of looking for good or bad aspects of the company. Compared to large stocks in the, Overall company is rich and has good and profitable core function, with zero fraudulent activities by the management. In FY2018 annual report, at page 50, an investor would notice that now the company has reversed the practice of showing investment in property under non-current investments and now it is showing it under capital work in progress (CWIP). Free cash flow (FCF) and SSGR are the main pillars of assessing the margin of safety in the business model of any company. Looking at the financial data of GM Breweries Ltd for past 10 years (FY2009-18), an investor would notice that the company has grown its sales at a moderate pace of 8-10% year on year from ₹210 cr in FY2009 to ₹426 cr in FY2018. G M Breweries Ltd. key Products/Revenue Segments include Country Liquor which contributed Rs 1681.34 Crore to Sales Value (100.00 % of Total Sales)for the year ending 31-Mar-2020.