FMCG Beverages is on up move

GST bought a cheerful smile for most of the sectors but alcohol companies were not given any benefits as the sector was kept out from GST purview. The sector reacted to the Government move and the stocks fell more than 40% from 2016 May’s high. GM Brew fell 41% from its high of Rs. 722 in June and made low of Rs. 442 on 4^th Aug, Globus sprit fell 14% from high of Rs. 88 on 19^th Aug to Rs. 75.35 on 29^th Aug, Pincon fell 26% from its high of Rs. 89.40 to Rs. 65.40 and Radico kahitan fell 17% from high of Rs. 100 to Rs. 83. 

 

Recently the sector has shown buying on increase in consumer demand

Radico kahitan rose 44% from its low of Rs. 83.55 and is currently trading at Rs. 121.15. A quick look at fundamentals of Radico kahitan- it registered revenue growth of 14.93% in QoQ. The profitability rose 45.76% QoQ and 19.01% YoY. Last quarter EPS stands at 1.62, the stock is trading at a PE multiple of 19.66. This is a best stock as per Dynamic research team. If sector continues its rally one can expect a target of Rs. 155 for short term. 96 institutions hold position in the stock.

Globus Spirit rose 55% from its low of Rs. 65.65 and is currently trading at Rs. 101.40. The stock is trading at PE multiple of 16.40 and 52 week high and low of the stock is at Rs. 101.60 and Rs. 50.60 respectively. The company regitered a growth of 2.71% QoQ and net profit jumped 46.53% QoQ. Short term target of the company is at Rs. 122.

GM Brew share price zoomed 42.65% from its low of Rs. 442 and is currently trading at Rs. 622. The company registered a marginla fall in revenue by 2.91% in QoQ and profitability fell by 27.78%. The company does not have much investment from institutions. We suggest avoiding buy in this stock.

Pincon sprit rose 7% from its recent low of Rs. 65 and is currently trading at Rs. 70.10. The company showed jump in revenue by 24.57% in QoQ and profitability rose by 26.83% in QoQ. Institutions have not made any investment in this company till date.

Therefore looking at the above information Radico Khaitan looks promising for short term and long term investment.

INSTRUMENT	Price	Avg. Volume	Market Cap (Rs. in Cr)	% FII Holding	P/E Ratio (X)	Debt Equity Ratio (X)	PAT JUN’ 16	PAT MAR’ 16	PAT DEC’ 15	PAT JUN’ 15
EMPEE DISTILLERIES	67.1	145346	120	0	0	1.28	-7.75	-7.19	0.64	3.37
GLOBUS SPIRITS	101.5	367918	253	0	16	0.63	6.33	4.32	3.49	3.47
GM BREWERIES	623	64171	888	1	16	0	12.58	17.42	15.57	15.89
PINCON SPIRIT	70.9	348989	300	0	11	2.8	9.13	7.2	6.16	0
PIONEER DISTILLERIES	198	33513	232	0	6	-0.4	2.67	18.66	14.14	-0.8
RADICO KHAITAN	123.5	1064864	1578	23	20	0.79	21.53	14.77	25.37	18.09
SOM DISTILLERIES	181	26492	484	0	30	0.51	7.09	1.01	2.56	6.37
UB HOLDINGS	43	1012362	282	2	0	-3.17	0	-43.14	-16.31	2.15
UBL	919.85	531518	23951	13	75	0.19	147.06	52.37	72.12	122.14
UNITED SPIRITS	2286.05	226829	33165	24	33	2.09	43.8	5.43	40.95	11.61