🔍 At a glance
G M Breweries (GMBREW) is the undisputed king of country liquor in Mumbai, Thane & Palghar — but its 5-year sales growth is just 6.3%, and dividend payout just 11%. Despite 0 debt, 18% ROCE, and ₹794 share price, investors are still left asking — where’s the fizz?
🏭 About the Company
- Founded: 1981
- Business: Manufacture and sale of country liquor and Indian Made Foreign Liquor (IMFL)
- Market Position: Monopoly in Mumbai, Thane, and Palghar districts
- Brand Edge: Not known for flashy branding — but dominates the mass segment
- Website: gmbreweries.com
This is your desi liquor story — one that’s all about margins, not marketing.
👔 Key Management
- CMD: Mr. Jimmy William Almeida
- Board Stability: No major resignations
- Promoter Holding: Steady at 74.43% for years (💪 trust signal)
- AGM Update: Approved 75% dividend (₹7.5/share), new Whole-Time Director added in 2025
📊 Financials: FY21 to FY25
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 340 | 458 | 594 | 615 | 637 |
| EBITDA (₹ Cr) | 75 | 96 | 117 | 107 | 118 |
| EBITDA Margin (%) | 22% | 21% | 20% | 17% | 18% |
| Net Profit (₹ Cr) | 80 | 93 | 100 | 152 | 129 |
| EPS (₹) | 35.13 | 40.95 | 43.80 | 66.46 | 56.48 |
| Dividend (₹) | 3.25 | 4.00 | 5.00 | 5.50 | 7.50 |
📉 Sales CAGR (5Y): 6.3%
📈 PAT CAGR (5Y): ~13%
💰 ROE (FY25): 14.6%
📈 Stock Performance Snapshot
| Period | Return |
|---|---|
| 1 Year | 26% 📈 |
| 3 Year | 21% CAGR |
| 5 Year | 19% CAGR |
| 10 Year | 30% CAGR |
Current Price: ₹794
Book Value: ₹411
P/E: 14.1
P/B: 1.93
🎯 Fairly valued compared to alcohol peers
🧮 Forward Fair Value (FV) Estimate
Assumptions:
- FY26 EPS = ₹65
- P/E range = 15–18x (moderate smallcap FMCG/alc rating)
➡️ Forward FV = ₹975 – ₹1,170
With CMP at ₹794, there’s room for 20–40% upside, but don’t expect fireworks.
🍶 Business Model Insights
- Product: Country liquor (cheap, high volume), IMFL (low market share)
- Volume Driver: Mass consumption in regulated districts
- Margins: Hovering around 17–22%
- Zero debt, no receivables: Literally sells on cash
- Inventory days: 46 → tight, efficient cycle
- No aggressive capex — prefers stability over growth
It’s like the conservative uncle of the liquor business — no drama, just steady cash.
🧾 Balance Sheet Snapshot
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Equity + Reserves (₹ Cr) | 505 | 591 | 681 | 822 | 939 |
| Debt (₹ Cr) | 0 | 0 | 0 | 0 | 0 |
| Cash Flow from Ops (₹ Cr) | 1 | 97 | 96 | 59 | 162 |
| Capex (Investing CF) | -72 | -95 | -87 | -48 | -149 |
| Dividend Paid (₹ Cr) | 6.5 | 7.2 | 9.0 | 9.9 | 17.3 |
🔍 Major FY25 Capex — ₹149 Cr. Yet, fixed assets increased only ₹50 Cr. The rest likely went to mutual fund investments (₹590 Cr).
🍺 Peer Comparison
| Company | P/E | ROCE | Dividend Yield | CMP (₹) |
|---|---|---|---|---|
| United Spirits | 67.1 | 28.7% | 0.60% | 1503 |
| United Breweries | 118.6 | 13.8% | 0.48% | 2064 |
| Radico Khaitan | 99.1 | 16.2% | 0.16% | 2555 |
| Allied Blenders | 60.9 | 21.1% | 0.85% | 424 |
| G M Breweries | 14.1 | 18.1% | 0.94% ✅ | 794 |
🔍 Verdict: Most undervalued player, but also least ambitious.
🧨 Red Flags
- ❌ Growth stagnation: 6.3% revenue CAGR over 5 years is weak
- ❌ Dividend payout low (~11%) despite ₹939 Cr net worth
- ❌ Dependent on one state (Maharashtra) — no national presence
- ❌ Little innovation, zero branding — survives on distribution and price
- ❌ Margins peaked in FY23, now slightly down
🍻 EduInvesting Take
“Imagine a liquor company that behaves like a PSU — makes profit, hoards it, gives you ₹7.5 and tells you to be grateful. That’s GM Breweries. While United Spirits throws parties and Radico does marketing blitzes, GM just quietly sells tharra to half of Maharashtra and builds a fortress of mutual fund investments.”
🧯 Risks
- Maharashtra policy risk — pricing, taxation, prohibition
- Lacks scale beyond Mumbai belt
- Lower dividend than expected may turn off DII/FII interest
- Rising costs (packaging, ethanol, logistics) could impact margins
📦 TL;DR
- Monopoly in Mumbai-Thane-Palghar for country liquor
- FY25 Profit = ₹129 Cr, EPS = ₹56.48
- Dividend = ₹7.5/share → <15% payout
- Zero debt, excellent cash flows
- Fair Value = ₹975–₹1,170
- CMP ₹794 = Undervalued but sleepy
Author: Prashant Marathe
Date: 12 June 2025
Tags: GM Breweries, Country Liquor, Maharashtra Monopoly, 5-Year Recap, Dividend, Mutual Fund Hoarder, EduInvesting Style
