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3 Alcohol Stocks Trading at the ‘Cheapest Valuation’!

The market for alcoholic beverages in India is amongst the biggest in the world. The industry is consistently growing year-on-year primarily on account of two factors – growing disposable incomes and a gigantic young population. The demographically younger population, which seems to be at the forefront of alcohol consumption makes investing in this sector a good option for the long term.

However, one also needs to consider the valuation of these stocks before adding them to their portfolio. In that vein, here’s a list of 3 such stocks that are not just profitable but also trading at the lowest P/E.

IFB Agro Industries Limited

IFB Agro Industries Ltd (NS:) is a diversified business with three main divisions – Marine, Animal healthcare & Alcohol and bottling. It is the largest manufacturer of Indian Made Indian Liquor (IMIL) in West Bengal and has a market capitalization of INR 523.57 crores. In FY22, the company clocked a revenue of INR 1,027.21 crores, crossing the INR 1,000 mark for the first time ever.

Consequently, the profit surged 26.22% on a YoY basis to INR 58.54 crores in the last fiscal, which is again the highest. FIIs have also increased their holdings from 0.22% in September 2021 to 0.29% in September 2022. In the last one year, the stock has remained almost flat, with a -5.5% return but the earnings jump lowered the P/E ratio to 8.94, which is the lowest amongst all profitable listed-liquor stocks.

Aurangabad Distillery Limited

You might not have heard of Aurangabad Distillery Ltd (NS:), as it’s quite a small distillery, having a market capitalization of just INR 107 crores. It makes Rectified spirit, Denatured Spirit, Neutral Alcohol, Potash, Bio-potash, etc, catering to other industries such as pharma, aromatic industry, etc.

The FY22 revenue surged to the highest ever, at INR 102.82 crores, while net income jumped over 194% to INR 8.98 crores. As it’s a very small company, the stock is also illiquid and not suited for regular trading. It trades at a P/E ratio of 12.02, despite a 1-year rally of 71.9%. Currently, the stock is trading around INR 129.65 and has decent support at around INR 110.

GM Breweries Limited 

The last stock on the list is G M Breweries Ltd (NS:) which is engaged in the manufacturing and sales of country liquor (CL) and Indian-made foreign liquor (IMFL). The company has a market capitalization of INR 1,131 crores. It is doing good on the financial front, clocking a 31.4% YoY growth in revenue to INR 487.05 crores in FY22, which also led to a 16.5% profit jump to INR 93.37 crores.

In FY17, the company was operating on a profit margin of 23.86%, which more than doubled to 51.06% by FY22. It’s rare to come across companies that operate at 50% margins. FIIs have also increased their stake, from 1.38% in June 2021 to 1.78% in September 2022. Due to a 9.2% decline in the share price in the last one year, and an earnings jump, the P/E ratio is a lucrative 12.12.

Source: Investing.com

The above news was originally posted on news.google.com

Aabkari Times Editorial Teamhttps://aabkaritimes.com
Aabkari Times is a monthly news magazine on Liquor, Excise and Alcohol allied industry; being published since 2009 by the expertise of retired excise dept. associates and alco-bev industry professionals as our editorial team. Our magazine contains different new alco-bev strategic and new brand launch articles as well as news on recent govt. policies, trends on alcohol industry and other important data relevant to the distilleries and industry at the mass.

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