🟡 1. At a Glance
Shri Gang Industries started off as a struggling, unknown entity that barely had ₹1 Cr in sales a few years ago. Today, it bottles for Diageo’s United Spirits, sells its own brands in UP, and clocked ₹353 Cr in FY25. ROCE? 44%. Stock P/E? 6. Sounds like a multibagger recipe. But then… you notice the promoter holding is just 35%, and Q4 loss came out of nowhere. Is this a liquor miracle or a hangover waiting to happen?
🎬 2. Introduction with Hook
Golden Cascade or Golden Trap?
SGIAPL (fancy name, we know) is one of those rare “Bharatiya bottlers” that pulled off a ₹0-to-hero growth story.
✔️ Tied up with Diageo.
✔️ Manufactures IMFL for United Spirits.
✔️ Own brands in UP: Bulldozer and Golden Cascade.
✔️ ₹29 Cr profit in FY25 vs ₹-4 Cr loss in FY21.
But hold the shot glass—because Q4 FY25 saw a loss. And the stock is trading at 19x book value with low promoter skin in the game.
🏭 3. Business Model – WTF Do They Even Do?
SGIAPL is in the liquor business, but in multiple avatars:
🛢️ B2B bottling for Diageo / United Spirits
→ Long-term agreement in UP for bottling & ENA supply
🥃 Own brands under UPML
→ Golden Cascade and Bulldozer sold under state liquor scheme
🍾 Distillery operations
→ Produces Extra Neutral Alcohol (ENA), a key raw material in IMFL
🛢️ Also trades in edible oil
→ Yes. Because why not confuse everyone?
📊 4. Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | ₹32 Cr | ₹80 Cr | ₹139 Cr | ₹266 Cr | ₹353 Cr |
| Net Profit | ₹-4 Cr | ₹5 Cr | ₹13 Cr | ₹15 Cr | ₹29 Cr |
| OPM % | -1% | 10% | 13% | 11% | 14% |
| ROCE | -9% | 19% | 22% | 27% | 44% |
| EPS | ₹-4.45 | ₹5.95 | ₹7.34 | ₹8.25 | ₹16.36 |
✅ Sales up 11x in 4 years
✅ Profits up from negative to ₹29 Cr
✅ ROCE at PSU-dream levels
🚨 Q4 FY25 net profit = ₹-1.4 Cr → first loss after 8 quarters
💸 5. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹98.1 |
| P/E (TTM) | 5.99x |
| Book Value | ₹5.09 |
| P/B | 19.3x |
| Market Cap | ₹176 Cr |
| Fair Value | ₹85–₹125 |
🟢 P/E is dirt cheap
🔴 But P/B is criminally expensive
📦 They don’t hold any brands (Diageo owns it), so no brand IP valuation benefit
🎯 EduInvesting FV Range: ₹85–₹125
– 6–8x earnings multiple on core profit
– Adjusted for Diageo stickiness but capped due to low promoter holding
🧨 6. What’s Cooking – News, Triggers, Drama
🔥 Tied with Diageo for ENA supply and bottling
📉 Q4 FY25 loss: ₹1.4 Cr → first in 2 years
🔁 CCPS worth ₹1.47 Cr issued in April 2025
🧾 Reclassification of Promoters to Public approved by BSE
📦 Edible oil biz continues but contributes little
Big trigger?
– New Diageo contracts
– Entry into neighbouring states
– Capacity expansion in ENA
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY21 | FY23 | FY25 |
|---|---|---|---|
| Debt | ₹92 Cr | ₹130 Cr | ₹86 Cr |
| Reserves | ₹-81 Cr | ₹-63 Cr | ₹-9 Cr |
| Equity Capital | ₹8 Cr | ₹18 Cr | ₹18 Cr |
| Fixed Assets | ₹53 Cr | ₹123 Cr | ₹126 Cr |
✅ Debt has reduced by ₹44 Cr
✅ Fixed assets stable
🟥 Still carrying negative retained earnings until FY25
🟠 High leverage until FY24; FY25 showing recovery
💵 8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY23 | ₹13 Cr | ₹-26 Cr | ₹13 Cr | ₹0 Cr |
| FY25 | ₹45 Cr | ₹-6 Cr | ₹-40 Cr | ₹-1 Cr |
🟢 Strong operational cash flow
🔴 Financing cash flow negative = debt repayment
🟠 Investing cash flow low = no new capex
📉 9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 44.0% |
| OPM (FY25) | 14.0% |
| Interest Cover | 3.5x |
| Debt / Equity | 0.9x |
| P/E | 5.99x |
| Promoter Holding | 35.6% |
✅ High ROCE
✅ Great margins
❌ Very low promoter holding
❌ Book value absurdly low at ₹5.09 vs ₹98 CMP
📊 10. P&L Breakdown – Show Me the Money
Quarterly Rollercoaster:
| Quarter | Sales | Net Profit | EPS | OPM % |
|---|---|---|---|---|
| Jun ’24 | ₹79.9 Cr | ₹2.35 Cr | ₹1.31 | 9.0% |
| Sep ’24 | ₹105 Cr | ₹18.0 Cr | ₹10.1 | 21.7% |
| Dec ’24 | ₹99.5 Cr | ₹10.4 Cr | ₹5.78 | 14.6% |
| Mar ’25 | ₹62.7 Cr | ₹-1.4 Cr | ₹-0.78 | 5.9% |
That Q3 FY25 spike (₹18 Cr PAT) looks like a one-time Diageo refill
Q4 crash suggests normalization or some contract glitch
🧩 11. Peer Comparison – Who Else in the Game?
| Company | P/E | ROCE | OPM | CMP/BV | ROE |
|---|---|---|---|---|---|
| United Spirits | 61.7x | 28.6% | 18.5% | 12.4x | 21.4% |
| Radico Khaitan | 97.6x | 16.2% | 13.8% | 12.5x | 13.6% |
| Tilaknagar Inds. | 28.9x | 28.4% | 17.7% | 7.5x | 29.9% |
| Shri Gang | 5.9x | 44.0% | 14.0% | 19.3x | — |
💡 Clearly the cheapest on P/E, and strongest ROCE,
but valuation distortion due to ultra-low book value
🕵️ 12. Miscellaneous – Shareholding, Promoters
| Category | Jun ’22 | Mar ’25 |
|---|---|---|
| Promoter | 32.6% | 35.6% |
| Public | 65.2% | 63.8% |
| DIIs | 2.14% | 0.63% |
🔻 Promoter holding is low and stagnant
🔄 Reclassification of promoters into public category – neutral or slightly negative
👥 ~13,800 shareholders
🧠 13. EduInvesting Verdict™
Shri Gang Industries is the kind of company that makes you go “Wait, how did I miss this 10x move?” And then you look deeper.
✅ Mega growth
✅ High ROCE, low P/E
✅ Sticky Diageo relationship
But…
❌ Weak promoter skin
❌ Q4 loss = scary
❌ Extremely low book value = no margin of safety
🎯 Fair Value Range: ₹85 – ₹125
Bottling revenues are steady, but valuation isn’t screaming “safety”.
Think of it as a solid peg of whisky — enjoy responsibly, and don’t drink it all at once.
✍️ Written by Prashant | 📅 July 3, 2025
Tags: Shri Gang Industries, Diageo, IMFL bottling, liquor stocks, UPML, smallcap FMCG, value stock, EduInvesting
