SOM DISTILLERIES AND BREWERIES LTD- QUICK BUCKS!

Article as on 3rd August 2018:-



**ABOUT COMPANY**
Som Distilleries and Breweries, incorporated on March 26, 1993, is engaged in manufacturing beer and Indian made foreign liquor. The company owns brands such as Hunter Extra Strong Premium Beer, Legend Premium Beer and Legend Premium Lager Beer. It has manufacturing facilities in Bhopal, where it has brewing, storing and layering facilities. The company's manufacturing facilities are spread over 20 acres in the Raisen district of Madhya Pradesh with an annual capacity of 3.6 million cases.
A joint collaboration with Falcon Traders in Goa will enable the company to venture in the Goan markets for the very first time with its own and other brands. Sales would be promoted in the western and southern markets through this alliance.
Among the few companies which have production and marketing infrastructure for Indian Made Foreign Liquor (IMFL) and beer products, the company develops export markets for its products in Europe, Middle East and CIS countries and has been exporting products to London. It undertakes contract manufacturing for clients including Mendoza Vino , USA and United Breweries.


**TRIGGERS**
1) Promoters holding increased by 0.07%.
2) When compared YoY, Mar2018 profits growth was around 170%, whereas topline growth around 50%. The June quarter is usually the best quarter for the company.
3) The entire alochol sector is in bull run and all its peers are posting good results.
4) DER is lowest, when compared to other H.Y. reports.
5) operating profits to interest highest at 7.95 times.
6) ROCE highest at 29% (H.Y. periods)
7) Debtors turnover ratio highest at 6.13times (H.Y. period)


**BACKLOGS**
1) RM cost is more than 50% of total turnover.
2) Low promoter holding.
3) Debt is high compared to its peers.
4) sales to mcap ratio is more than 2 and Price/book is 4.7


**TECHNICALS**
The scrip is consolidating between 225-250 range for more than a month. Immediate resistance is around 260-265 levels and next one is 298-307 levels on closing basis. There is a strong support at 220-225 levels. A close above 265 for 2 consecutive days should lead to next resistance zones in less than a week.

**MY TAKE**

SDBL can give decent returns in next few months. A good bet for MTT 270/293/321 from CMP 244.

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