Shares of Som Distilleries & Breweries Ltd tanked over 7 percent on November 7 following reports of an income tax search operation at the company premises but later recouped some losses.
At 11.20am, the stock was trading at Rs 310 on the BSE, down 5.3 percent from its previous close, while the benchmark Sensex fell 0.15 percent to 64,859 points.
According to CNBC TV-18, the income tax department began a search operation at the various premises of Som Group of Companies across the country, including Bhopal, Jabalpur and Indore, on November 7.
The company recently called off its Rs 350-crore QIP offer because of poor demand. It had planned to raise funds for expanding the beer facility in Karnataka by 60 lakh cases annually. In April, they also announced a Rs 300-crore investment in a new unit in Maharashtra. Som Distilleries and Breweries is a prominent producer of various alcoholic beverages.
For the quarter ended September, Som Distilleries consolidated total income surged 72 percent on-year to Rs 464 crore from Rs 269 crore a year ago. However, on a sequential basis, the company's total income declined 38 percent from Rs 760 crore in Q1FY24.
The company’s consolidated net profit, too, slipped 56 percent quarter-on-quarter (QoQ) to Rs 14 crore in Q2FY24 from Rs 33 crore in Q1FY24. Its net profit spiked 80 percent from Rs 8 crore in Q2FY23.
HDFC Securities analysts issued a bullish call, upgrading the FY24 and FY25 estimates. The company's core markets are Madhya Pradesh, Karnataka, and Odisha, with a focus on entering new markets and strengthening existing ones to boost market share in the medium to long term.
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