Buy This Breweries Stock For 50% Upside In 1 Year: ICICI Direct

Indian indices in line with global markets have suffered a great deal amid ongoing Ukraine-Russia tensions and the market sentiment is highly volatile with India VIX- the measure of volatility jumping by a huge 22.97% in trade on February 14, 2022.

Amid such a sentiment and after earnings, brokerage firm ICICI Direct in its report dated today has come with a 'Buy' call on two stocks, one from the breweries space and the other a retail player.

Globus Spirits: Buy for a target of Rs. 1750:

Q3fy22 performance: Net revenues at the company registered de-growth of 9% to Rs. 347 crore. EBITDA de-grew also sequentially by 34% to Rs. 58 crore. PAT also registered de-growth of 42% sequentially to Rs. 31 crore.

Rationale for investment in Globus Spirits:

The company's capacity is seen to double by Fy24 to appx. 1230 KLPD with the company planning to leverage on the changing dynamics within the segment. Also, growing opportunities in IMIL space will lead to higher asset turnover as well as return ratios in the long run. The brokerage has valued the stock at Rs. 1750 i.e. 15x P/E on FY24E EPS.

Drivers that shall boost Globus Spirits performance in 1-year:

The company has a product offering across the value chain of liquor industry that includes engaging in the manufacture of ENA to contract bottling of Indian made foreign liquor to further marketing and selling it. The company will also focus on capturing premium price points in IMIL space. Also, net debt is expected to come down with return ratios reaching 30% + levels.

 

 

About Globus Spirits

Globus Spirits is a small cap firm carrying out the manufacturing, marketing as well as selling of Industrial Alcohol. Other Operations of the company:Extra Neutral Alcohol (ENA)- It manufactures and supplies ENA to other IMFL manufacturers, pharmacies and perfumeries etc.

Disclaimer:

The above stock recommendation is taken from the brokerage of ICICI Direct. Please consult your investment advisor before taking any call.

GoodReturns.in