Earnings Pataka: Profit for GM Breweries was up 300% in Q2

In CNBC-TV18 new segment ‘Earnings Pataka’ Varinder Bansal takes you through a relatively unknown company or small company that has posted outstanding earnings, which the market may have missed out on. GM Breweries is one such company that came out with very good set of numbers. The company manufactures country liquor and Indian made foreign liquor. It is a largest manufacturer of country liquor in the state of Maharashtra; the brands are GM Santra, GM Doctor, GM Limbu Punch.For second quarter, the total income was up 25 percent, EBITDA was up by 220 percent. Margins, which are very critical for this company, the EBITDA margins came in at 19.3 percent compared to 7.6 percent that they reported in Q1 and profit was up 300 percent at Rs 9.5 crore.Even if you looked at the first half it would give you a better picture because total income in the first half was up 16 percent for this company. EBITDA was up and consistently up by 172 percent and for the first half itself EBITDA margins are at 22.6 percent compared to only 9.5 percent. So the company has been moving up the ladder in the first half itself. Profit was up 267 percent at Rs 25 crore.In the first half itself the company managed to report profit of Rs 25 crore for the entire year that is FY15, the profit reported by company was only 18.5 crore. So they have already done 50 percent higher of what they did in FY15. That is a performance of this company alone.If you look at the company, the current marketcap of this company is nearly Rs 550 crore, which his important because in the last one year, the stock has already moved from Rs 100 to as high as nearly Rs 500 that is five times. So the numbers are good but there are people who have bought this stock earlier as well and we have to see whether the company continues to perform or not going ahead but this stock has run up. It was up 5 percent yesterday itself.Eye on balance sheetThey went into public in 1993 and no equity dilution since then. They announced a bonus in May 2014, net debt on the books with the company is only Rs 10 crore which is a positive thing. Non-current investments which are sitting on the company books is nearly Rs 75 crore, which is a good thing for a smallcap company. Return on networth is as high as 15 percent so that is also important and it is a regular dividend paying company. So, all things are looking good for this company.