Rough Notes from Q4 Call
MP - POS for beer has expanded, the impact is positive. Market has expanded last year and expecting further expansion.
Karnataka - higher demand than supply. Company doing it’s best to cater to it.
Odisha - Plant undergoing expansion. Planning some tie ups in short to medium term
90% of sales comes from the state where plants are present. Last year we had difficulty to cater to demand within those states.
This business is best done with a plant in the state from where demand emerges. Maharashtra & some other state(UP) may be options for expansion. Looking for various opportunity. 200-300 funds requirement.
Gross Margin decrease this Q: Cost pressure all around, specially glass bottle , last year seen 35-40% increase. Similar increase in barley prices, but it has now stabilised. It is down to Q1 level. It had increased in Q2 & Q3.
Do we procure ENA for IMFL - Yes, but it’s only 10% of revenue.
IMFL is just for complementing sales, focus is on beer.
We have taken price hikes (Beer) in MP, Karnataka, Delhi, Odisha in range of about 4-5%
Capex : Odisha. taken 25 cr. term loan from PNB. capacity enhancement from 42 to 60 lac cases.
Debt : Don’t expect any further increase in debt in current financial year.
New plants : at Bhopal & Hassan have stabilized and operating close to 85% to 90% capacity currently.
Karnataka - 90 lac cases. added 45 lac cases in Karnataka.
FY23 volume was 15 Million. FY24 volume : See 22-25% growth in sales, revenue of 1000 cr. aspiration of 13-14% margins.
Soda Ash prices have also decreased in April, so hope glass bottle prices have peaked out.
Peak Plant utilization of 85-90% possible
Gross Margins : Cans - Cost escalation in cans have been 15-20% range compared to 40% in glass bottles. Cans have higher realization compared to glass bottle. Endeavour is to improve the sales mix from bottle to cans. Current contribution of cans : KA - 10%, Bhopal - 10%
Disc: Hold from Mar’22 levels and added more in Feb’23.