Another in the series of being an unknown yet closely followed by institutions is Globus Spirits Ltd. GSL is engaged in the business of manufacture, marketing and sale of Industrial Alcohol comprising Rectified Spirit
and Extra-Neutral Alcohol, Country Liquor, and Indian Made Foreign Liquor (IMFL). Globus Spirits Ltd (GSL) is amongst the leading players in the Alcohol industry in North India.
The stock is currently trading at Rs.80/- levels. Although comparision with McDowell or any of the premium brands is completely uncalled for since the branding is very rural and countryside hence the kind of premium associated with McDowell or any of the imported liquor will never be achieved by this company. Also many of the analysts point out that the penetration in Indian market is very low. To that my argument is simple - one, it is true of India for each of the industry such as Auto, retail or for that matter cigerrates as well. India historically always had lower penetration levels for almost every industry due to our local consumption pattern rather than a national one. Only in few consumption goods we have been able to achieve some sort of a national pattern. Also the income distribution or its inequality to be specific plays a role in this pattern. Secondly, even if there is an increase in per capita spending on liquor in India, Globus Spirits would not be best positioned to capitalise as the new consumers are normally attracted by premium imported brands and not really the local ones which are perceived to be of low standard.
Despite making the arguments above and considering that margins of Globus have been under pressure for some time resulting in lower year on year profits, the company has a lot of intrinsic value. The EPS for last year was 14.5/- which implies a very low P/E ratio of 5 levels. Also the book value of the stock is 120/- implying a P/Bookvalue of around .67 which implies that the stock has very limited downside. This might be the precise reason the stock has attracted significant institutional interest.
SBI and IDFC are particularly keen on the counter having holdings of around 8% each in the counter.
Also the promoter holding is healthy 67% which gives a lot of comfort to the investors in the stock. For anybody having a long term view can take position in the counter and take advantage of the consumption story. Again I am recommending a stock keeping in mind that there are substantial institutional investors around making the stock less risk prone to accounting frauds.
and Extra-Neutral Alcohol, Country Liquor, and Indian Made Foreign Liquor (IMFL). Globus Spirits Ltd (GSL) is amongst the leading players in the Alcohol industry in North India.
The stock is currently trading at Rs.80/- levels. Although comparision with McDowell or any of the premium brands is completely uncalled for since the branding is very rural and countryside hence the kind of premium associated with McDowell or any of the imported liquor will never be achieved by this company. Also many of the analysts point out that the penetration in Indian market is very low. To that my argument is simple - one, it is true of India for each of the industry such as Auto, retail or for that matter cigerrates as well. India historically always had lower penetration levels for almost every industry due to our local consumption pattern rather than a national one. Only in few consumption goods we have been able to achieve some sort of a national pattern. Also the income distribution or its inequality to be specific plays a role in this pattern. Secondly, even if there is an increase in per capita spending on liquor in India, Globus Spirits would not be best positioned to capitalise as the new consumers are normally attracted by premium imported brands and not really the local ones which are perceived to be of low standard.
Despite making the arguments above and considering that margins of Globus have been under pressure for some time resulting in lower year on year profits, the company has a lot of intrinsic value. The EPS for last year was 14.5/- which implies a very low P/E ratio of 5 levels. Also the book value of the stock is 120/- implying a P/Bookvalue of around .67 which implies that the stock has very limited downside. This might be the precise reason the stock has attracted significant institutional interest.
SBI and IDFC are particularly keen on the counter having holdings of around 8% each in the counter.
Shareholding belonging to the category : "Public and holding more than 1% of the Total No.of Shares"
No.
|
Name of the Shareholder
|
Total Shares held
|
Shares as % of Total No. of Shares
|
1
|
SBI Emerging Business Fund
|
1,916,091
|
8.33
|
2
|
IDFC Premier Equity Fund
|
1,823,068
|
7.93
|
3
|
Templeton Strategic Markets Fund IV, LDC
|
0
|
0
|
Total
|
3,739,159
|
16.26
|
Also the promoter holding is healthy 67% which gives a lot of comfort to the investors in the stock. For anybody having a long term view can take position in the counter and take advantage of the consumption story. Again I am recommending a stock keeping in mind that there are substantial institutional investors around making the stock less risk prone to accounting frauds.
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