1:4 Bonus Shares, Rs 7 Dividend: Big Update Announced; Buy The FMCG Stock?

After today's closing session, GM Breweries' market cap of Rs 1,384.80 Cr classified it in the small-cap category of the FMCG industry. The 1981-founded G.M. Breweries Limited (GMBL) is involved in the production and distribution of alcoholic beverages, including Indian-made foreign liquor (IMFL) and country liquor (CL). The Board of Directors proposed a dividend of Rs 7 per share and 1:4 bonus shares on April 04, 2024. In light of this, the company delivered a significant update to shareholders on April 18. The announcement prompted GM Breweries' shares to close 0.34% higher on Thursday at Rs 757.65 a share on the BSE.

GM Breweries Bonus Shares

"The Board of Directors have proposed / recommended issue of Bonus Shares in proportion of 1:4 i.e. One new fully paid bonus equity share of Rs.10/- each for every 4 existing fully paid equity shares of Rs.L0/- each held as on Record Date. The bonus issue of equity shares will be subject to approval by members of the company," said GM Breweries in a regulatory filing on 4th April.

The above bonus shares will be credited or dispatched within two months from the date of the proposal of the Board i.e. by June 03, 2024 according to the company. Rs.4,56,93,850/- would be capitalized from free reserves for implementing the bonus issue and a total securities of 45,69,385 shares having a face value of Rs.10/each will be issued as a part of bonus shares. The balance in free reserves as of March 31, 2024 totalled Rs.80403.44 lakhs, according to GM Breweries.

GM Breweries Dividend

"The Board of Directors of the Company have proposed/ recommended subject to approval of Members a dividend @ 700/o i.e. Rs.7/- per equity share of Rs.10 each," GM Breweries informed the stock exchanges on 4th April.

GM Breweries Bonus Shares & Dividend Update

"Kindly take a note that in accordance with regulation 42 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations,2015, the company's books will remain closed from May 10, 2024 to May 16, 2024 (both days inclusive )for the purpose of Annual General Meeting, payment of final dividend & Issuance of Bonus Shares," said GM Breweries in a regulatory filing today.

GM Breweries Financials

From Rs 35.1 crore in Q4FY23 to Rs 86.6 crore in Q4FY24, the company's net profit climbed. From Rs 15 crore in the same quarter last year to Rs 70 crore in the quarter under review, the company's net income grew. To reach Rs 159.2 crore, the company's sales jumped by 2.1% YoY. In addition to declining by 19.7% YoY year to Rs 25.2 crore, earnings before interest, tax, depreciation, and amortization (EBITDA) margin also shrank to 15.8% from 20.1% the previous year. Profit before tax for the quarter was Rs 94.51 crore, a 109.7% growth over the Rs 45.07 crore reported in Q4 FY23. Net profit for the full financial year climbed by 51.72% to Rs 151.52 crore in March 2024 from Rs 99.87 crore in the fiscal year that ended in March 2023. In the year that ended in March 2024, sales climbed by 3.66% to Rs 615.23 crore, compared to Rs 593.51 crore in the year that ended in March 2023.

GM Breweries Share Price Target

"G. M. Breweries Limited is a small-cap Indian alcoholic beverage company that manufactures and sells country and Indian foreign liquor. Its current market momentum and strong financials have garnered the attention of traders and investors alike. For instance, in a year, the stock has delivered around 28.75% returns, and its current PE ratio stands at 9.12 compared to sector PE of 48.34, indicating that it is currently undervalued. The company has also offered a dividend of 0.93%, almost 0.45% of the sector's dividend yield. These aspects make the stock lucrative, and there is also a chance of an uptrend soon. Individuals who wish to explore this stock may consider entering the Rs. 700-730 buying range while setting a target of Rs. 800-1000. However, I recommend setting their stop loss at Rs.630 to avoid loss," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Disclaimer

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