Associated Alcohols & Breweries Ltd.
➡️ First Recommended – 300/304
Old Link for Reference 👇👇👇
➡️ Face Value – 10
➡️ Script Code – 507526.
➡️Target 24 months – 750
➡️Target 36 to 48 Months – 1200+
➡️From our first Recommendation at Rs.300 stock already made a 52 Week High at 419,Giving 40% Returns in less than one month.
➡️We expect Company to give good set of numbers on 28th May.
👉Associated Alcohols & Breweries Ltd. is one of the largest distilleries in India and the flagship company of the Associated Kedia Group – a Rs. 1000 million liquor conglomerate with interests in liquor manufacturing and bottling.
👉The company was set up by its founder Chairman — the Late Bhagwati Prasad Kedia. Incorporated in 1989, AABL took over the existing distillery of the promoter group in 1990 and expanded activities into manufacturing of highest grade liquors.Extra Neutral Alcohol is a vital ingredient in the making of an alcoholic beverage.
👉AABL supplies this vital ingredient to many leading manufacturers under a special agreement. In the IMFL ( Indian made Foreign Liquor) segment, the company has an agreement to Supply with reputed companies like Diageo (owner of brands like Smirnoff vodka and Johnnie Walker Scotch Whisky), Mason & Summers and Diageo-Radico.
These companies buy a total of 55-60% of the total IMFL produced by AABL.
👉The balance production is used for direct supplies to the branded suppliers across the country, apart from manufacturing its own branded products.
👉In house brands manufactured and marketed by AABL include consumer favourites such as Red & White, James McGill, Bombay Special (in the whisky segment)
Poised to benefit from the opportunities
These changes and trends mean many things to a company like AABL.
- Increasing demographics translates into greater demand for ABBL brands and feedstock.
- Up-trading will result in greater margins as sales of premium brands increasing.
- Deregulation will (over time, perhaps) allow access to restricted markets.
- Increasing competition from International brands will sharpen ABBL competitive edge and increase overall quality regimen.
- The global play will result in the maturing of the industry and expose the Indian industry to international best practices.
- Sustained double digit growth assures ready market for expanded capacity.
- No Indian party can be completed without Liquor.
- Trending change & increasing liquor consumption in India can benefit AABL.
EXPANSION PLANS & FINANCIAL ;
👉Currently Company is Running at capacity of 45 million liters and by FY19 Company is planning to Double its capacity to 90 million liters.
👉Expansion is done by internal funding and that shows Management is confident to generate free cash flows and its Vision.
👉Company is also Agressively marketing there products in South India which would boost its Topline in coming years.
👉Company has Debt Of only 32cr as of March 2018.By next year Company can become debt free. Debt to Equity ratio is just 0.32 Times.
👉ROCE are Highest at 28.58%.
👉Company can Report Eps Of 18 for FY18 & Expected Eps For FY19 is 25 & For FY20 is the game changer where we can expect Eps of 40.
Expanding global footprints ;
👉Apart from serving the domestic market, Indian alcohol beverage companies are increasingly looking at expanding their global footprint. Today there is distinct trend of Indian alcohol majors building their product portfolio through international brand launches and acquisitions.
Scrapping additional excise duty on imports
👉With the reduction of additional duty on imports of spirits, premium international brands are now available via the legal imported route. This effectively brings the parallel market existing until now into the mainstream and helps in expanding the consumer base. To players such as AABL, it is also an opportunity as every major liquor manufacturer will require increasing amounts offeedstock.
👉Disc – All data are for Study purpose only. Consult your Financial advisor before investing.