Associated alcholols & breweries ltd

Stock Opportunities Untested - but worth a good look
21

Thanks ayush for the clarification.

A lot of jumpy guys are going to put your name to a lot of picks since you featured in the Forbes Wizard list.

Everyone needs to understand that VP is a discussion forum and not a recommendation forum. If someone makes the mistake of treating this as a Tips/Recommendation service, its obviously going to lead to a lot of unnecessary chaos & hurtburn. The headline banner has been amended for our own good to read as follows:

VALUEPICKR FORUM/RESEARCH IS NOT A RECOMMENDATION SERVICE. It is a Community engaged in Separating the Wheat from the Chaff - in Business Quality, Management Quality, Business Execution & Performance. Please make sure first to read our Privacy Policy, Terms of Service, and FAQ/Guidelines. By accessing or using any part of ValuePickr Forum or ValuePickr Research websites, you agree to become bound by our terms of service and co-operate with our community goals & guidelines.

15 Likes
22

ayush hitesh i find this clarification odd for the reason as you read the entire thread nowhere in this entire discussion we have mentioned about the share price nor anybody made any sort of tall claim nor have given any target price in the beginning itself the negative and postives was mentioned clearly and with the help of other forum members we were able to understand newer things.
and no offence to anybody just by any one person buying a stock it will not change the fundamental of the company every body who is reading this forum will also able use his discretion according to his own risk reward ability but i fail to understand when we have not discussed any sort of price or target or reccomendation then what is the problem

3 Likes
23

As you might have noticed these are cautionery statements put out by Ayush & Hitesh for the benefit of newbies who frequent ValuePickr and other forums for investible idea recommendations.

If you set alerts/search - you will be able to see that Ayush’s disclosure on this thread has been used (out of context) by several unscrupulous people on different message boards like MMB and RJ saying Forbes listed wizard Ayush (or something similar) has invested in Associated Alcohols…folks might get excited…jump in at the wrong time …you get the drift.

This is dangerous territory for newbies - we have to remain vigilant - and do our bit in educating new investors.

15 Likes
24

Dear members I only a new guy to the forum but I have one doubt I see based the historical growth in profit and sales (35%) and assuming that 30% or even 25% growth expected the sales should be 375/400 cr the raw materials expense at 62% .works to 234 cr other expense 80 cr and depreciation around 11 cr and some change in inventory 5 cr employees cost 17 cr 350 cr for any sales figure of 390 cr profit from operations 40 cr with finance cost 6 cr and tax 9 cr 25 cr profit looks possible and eps of 28 debt at 40 cr cash flow above 25 cr would this not be good bet even at 250 cr m.cap Evebita will be around 6
So what is the doubt small companies don’t give dividend but have they not grown may be iam wrong i have only minimal investment experience of 3 yrs so please explain why 250 cr m.cap is not possible I am going with the numbers available only.

25

hello guys i bought a bottle of haig whiskey to check yes the bottlers are associated alcholols indore under agreement and collabartion with haig thru diageo

26

Adrian the screener is still not updated with this fy 15 Debt roe and other things once the AR is out around end of July the screener I think will update about the debt and cash flow and roe once that is done sure it will hit many searching with that DER ROE cirteria after that yes you can expect the m.cap u mentioned

27

I want to thank indirachitra prakashiyer and ayush it is really good now with increase in volumes this has given a breakout of 52 week high and still going strong indiraji can u further post anything about the recent annual report please I think it is heading for RERATING like gm breweries

28

to Mr Adrian Prakash please as a starter of this thread I would like to mention here that even as of today all the negative concerns discussed still remain unclarified as mentioned by Mr ayush and Donald copy pasting is done to various sites about this article now the price has gone up considerably I would like to remind the readers that till date there is no annual report has been published so the clarity on the points raised in this thread remain unanswered as regards the valuation of the company it is upto individual discretion but my sincere suggestion is any sort panic buying or panic selling both are harmful in for long term investment perspective thank u.

1 Like
29

any news in associated alcohal

30

Hi guys,
I was studying the AR of 2015 and I had following concerns.

  1. Employee benefit expenses increased from 7.83 cr in FY2014 to Rs. 16.65 cr in FY2015. As per the Related Party Disclosure salary of management has increased by 6.06 cr. in Fy2015. So major increase in employee benefit expenses has gone to management.
  2. Contingent Liabilies of the company has increased from 37.32 cr in FY2014 to Rs. 63 cr in FY2015, Rs. 20.89 cr increase is due to Central Sales Tax. As per the auditor’s report cases under Central Sales Tax Act has been opened from the period 2006-07 to 2012-13.
    It would be helpful if anyone can throw some light on it.

Regards
Harshit
Disclosure: Invested

1 Like
32

The half yearly result has proven that company perform with consistency they are able to maintain opm above 12% reduced finance cost and debt even though small they are started paying dividend there is no reduction in promoter holding or pledge as of today the important thing is friends
See the SALES GROWTH IN 3 yrs > SALES GROWTH IN 7 yrs and PROFIT GROWTH IN 3 yrs > PROFIT GROWTH IN 7yrs and ROE > 15% and ROCE > 15% DER< 0.5 CURRENT RATIO> 1 NET BLOCK > NET BLOCK 3 yrs back the ROA> ROA 3 yrs back once DONALD explained this theory for Aarti drugs if I remember correctly but this fits this company very well now if they are able to maintain the historical topline growth of 30% even over next two years or assuming the growth at evn 10% we are talking about 370 cr Rev and at opm of around 12/13 EBITA of around 40/45 cr over fy/16/17 I attended the AGM in Kolkata they are decent guys but yet not aware of PRO hence awareness is lacking otherwise it is good they are able to explain about the growth prospects but not willing to dilvulge many details as to whether Mr ayush has bought or not it does not make a difference if the company fundamental is maintained the same way and top line improves than we can see some value generation in the share price

Home IHG Potential Multibaggers IHG Flashback Masters Portfolios Stock News Research Reports Articles Study Corner Guidance

Economic Times Reveals the “Other Side” of Ashish Kacholia
17 NOVEMBER 2015 POSTED BY INDIAN HIDDEN GEMS
Our Master Portfolio Member Ashish Kacholia is a person who stays away from the market spotlight. To be precise, we couldn’t even get a photo of him from internet even though we spent lot of time looking for it*. Now Economic TImes has come up with an article which shows the other side of Ashish Kacholia along with his investment strategy. The article written by Shailesh Menon details the kindness act of Ashish Kacholia.

The article details how Ashish Kacholia helped Samaritan Mission School at Tikiapara near Howrah in West Bengal. The school was a 350 sq ft room with three windows and some 25 students 13 years ago— mostly children of rickshaw-pullers, housemaids and drug addicts.

As Mamoon Akhtar of Samaritan Help Mission recalls, while departing, “Ashish bhaiya” handed the first of his numerous cheques favouring the Samaritan Mission.

Today, the school imparts digitised education to over 3,000 students, boasts a playground and a vocational training lab, all thanks to the generosity of Ashish bhaiya and his rich friends from Mumbai. Little do these kids know that their bhaiya is one of the most influential investors on Dalal Street.

Article also mentioned about the investment strategy of Kacholia who find new investment ideas in the mid- and smallcap space. This strategy paid off as companies such as Pokarna Granites, Vadilal, Camlin, Axiscades Engineering, Acrysil, Lokesh Machines, Zen Technologies, Shaily Engineering Plastics and Ashiana Housing turned multi-baggers in his portfolio. Kacholia holds investments of nearly Rs 350 crore in companies where he has more than 1 per cent shareholding. “Ashish does a lot of research before investing. He’s a risk-taker; he buys shares in chunks if he’s convinced. He meets the management if his investment is large,” says a broker who executes trades for him.

Kacholia believes in testing the strength of his portfolio. So if the overall market momentum is weak, he dumps a portion of his holding to check for price resistance patterns. If the stock manages ride out even during an “engineered selloff”, he increases his holding. Kacholia does not hold more than 25-30 stocks in his portfolio at any given time. His price target is usually 1.5-2 times the buying price. That said, if company fundamentals turn negative mid-way to target, he dumps the stock dispassionately.

It seems that ET tried to get an interview with him but failed as he does not want to be in market limelight. He humbly acknowledge that bull market creates heros and bear market creates zeros, and feels its better be anonymous!!

*One of our readers, Mr. Venu Gopal shared a pic of Asish Kacholia which is updated in his portfolio page. Thanks alot Venu!!

Found informative?..Kindly share this post
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8 comments:

AnonymousNovember 18, 2015 at 2:17 AM
Hi Sir, I have his pic. Let me know how to share it ?

Reply
Replies

Indian Hidden GemsNovember 18, 2015 at 10:53 AM
:)…You can send it to indianhiddengems@gmail.com

Reply

prakashNovember 18, 2015 at 11:37 AM
Will you please provide his latest portfolio after sept qtr as u mention that next update after 30 october in your earlier post of ashish kacholias portfolio update please reply
Thnx

Reply
Replies

Indian Hidden GemsNovember 18, 2015 at 11:44 AM

Reply

prakashNovember 19, 2015 at 4:24 AM
Thank you
We appreciate your helpful nature.
Please continue this good work.

Reply
Replies

Indian Hidden GemsNovember 22, 2015 at 12:17 AM
Thanks alot for your kind words Prakash

Reply

Venu GopalNovember 19, 2015 at 8:30 PM
Hi Sir,

What is View on Associate Alcohol and Breweries? From both business and financial perspectives.

Regards,
Venu.

Reply
Replies

Indian Hidden GemsNovember 22, 2015 at 11:36 AM
Associate Alcohol and Breweries is a buy!!

Reply

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Now is this indianhiddengems record or Ashish kacholla holding less than 1% anybody can clarify

33

try this in screener.in
3yr sales growth> 7yr sales growth
3yr profit growth > 7 yr profit growth
3yr sales growth> 20
3 yr profit growth> 40
Debt to equity < 0.7
5yr sales growth> 20
5 yr profit growth> 50
ROE> 15
Roce> 15
Roic > 20
ROA> 13
PRICE TO CASHFLOW < 10
MARKET CAP TO SALES < 0.5
Industry pe> 30
Opm> 10
Dividend last yr > 0
Change in promoter holding in 3 yr > 2
Promoter holdings> 55
Pledged percentage <1
Try this in screener than we will know the value

1 Like
34

Hi Harshit,

Yes, the points you have highlighted are concerning and one needs to investigate more and have clarity.

@adrian007 - Like i mentioned in the first post itself that I was researching on the company and hence had some shares. In our personal style of investing - we often build positions while we are doing work and may increase or reduce exposure as per our further work. As a good practice, I just mentioned that I’m invested. However, somewhere it got mentioned that I’m endorsing the idea so I clarified that I’m not recommending the same…its work in progress and just sharing the observations I have.

Regards,
Ayush

3 Likes
35

No result for this query. I tried screener first time.

36

After seeing the half yearly result there is following points
For growth
3 year sales / profit growth > 7 yr sales / profit growth this will show that a longer period time the growth is sustainable and there is no negative growth in 7 years

For returns
Average ROE 3yr > 12 and TTM ROE > 17%
AVERAGE ROA 3yr = 10 and TTM ROA > 13.5%

For capital
Average ROCE 3 yr > 11.5% and TTM ROCE > 16%
ROIC > 18%
Days receivable in outstanding < 40
Inventory days < 40
Current ratio > 1

Debt management
Debt< Debt 3 yrs back DER < 0.7 Z SCORE > 2.9

Capex growth
Net block > Net block 3yrs

Promoter
Holding increased in last 3 yrs by open market > 5.5
No dilution no bonus no pending warrant no preference capital

Sector

Has problems with government but potential to grow

Promoter quality

Not fully known but no history of non compliance no pending investor compliant and dividend started
No web site

Now as regards the remuneration part I feel that the three people put together that is Prasanna Kumar Sushil Kumar and Ashish Gadia are taking a major chunk nearly > 60%
But the good thing is they have declared it in the PL and even after huge employee cost they are able to show adecent profit in the Pl the cash flow has improved the loan and advance is reduced
The bank grantee of 30 cry to third party has to be understood

And finally as regards the investment made by them in Narmada distillery and Mount Everest has to be clarified

Finally as retail investors we should understand that when HNI like Ayush Anil Kumar Goel dolly Khanna make some investment there financial capacity to hold there ability to cut losses there timing and long term view above all there temperament is different from retail investors
As retail investors we shoul thank them for sharing there perspective on a particular company
Now by fy 17 we can finally say that this is a valuable find if same growth is maintained and promoter clarity comes that I think Ayush has nicely summed up as work in progress watch it for growth and any dieviation
Thank you

1 Like
37

Question to be asked is : Can this small company become big ?

  1. It sells in regulated markets (60% sale is to MP Govt)
  2. Operating in almost full capacity
  3. No planned capacity expansion in near future
  4. Price per unit of sale is also fixed
38

One thing that caught my eye is when you compares trade payable to trade receivables. Payables are 3 times the receivables (March15)… so the company likely has many advances from customers ( there is no note on it) & does a great job collecting receivables.The massive OCF cash it has generated as on March15 is due to how it has managed Working Cap.

However the other area of concern is Non-Current investments. It seems to have invested in many plantation & developer companies. While thats ok am not sure how its related to its core business.

When you look at ROCE its not very good b/w 11% - 13%.

It has consistently managed to grow its pre-working cap & pre-capex OCF from 749 lacs in 10-11 to 3270 lacs.

Provided it manages its working cap efficiently going forward- its valuations are great.

39

go to the below link and see the image black dog triple reserve label clearly shows the sub lesse as associated alchols

Pasted image1151×1560 1.47 MB

LIST OF BRANDS OF FOREIGN LIQUOR REGISTERD FOR SALE AND/OR MANUFACTURE
Name of the brand Kind of liquor Manufacturer Country of
manufacture Bottle Capacity Strength Primary
Legend
Secondary Glen Drummond Single
Malt 8 Years Ols
Scotch Whisky (With
Frong Label &
inscription “Export” in
back label)
Whisky
Associated Alcohols &
Breweries Ltd., Barwaha,
Dist. Khargaon , Madhya
Pradesh
Italia 750 42.8% V/V

Royal Crown Raro
Deluxe Whisky(With
Frong Label &
inscription “Export” in
back label)
Whisky
Associated Alcohols &
Breweries Ltd., Barwaha,
Dist. Khargaon , Madhya
Pradesh
Italia 750 4.8% V/V

1277
Royal Crown Raro
Deluxe Whisky(With
Frong Label &
inscription “Export” in
back label)
Whisky
Associated Alcohols &
Breweries Ltd., Barwaha,
Dist. Khargaon , Madhya
Pradesh
Italia 375 4.8% V/V

1412 Shark Tooth Extra
Vodka Vodka
M/s. Diageo India Pvt. Ltd.
Lessee at Associated
Alcohol & Breweries Ltd.,
Khodiram, Barwah, Dis.
Khargone, M.P. - 451115
India 750(Front &
Back Label ) 42.8% v/v
from the above it is clear they are bottelrs for glen drummond single malt justin raro high qualtiy premium whisky blend, and black dog whisky and extra fine tripple distelled shark tooth vodka sub lesse for diageo
but why is the company hestitaing to show this in the website

1 Like
40

Now this the profile as shown in moneyworks4me

Associated Alcohols and Breweries (AABL) is one of the largest distilleries in India and the flagship company of the Associated Kedia Group – a Rs. 100 crore liquor conglomerate with interests in liquor manufacturing and bottling. The company was set up by its founder Chairman – the Late Bhagwati Prasad Kedia. Incorporated in 1989, AABL took over the existing distillery of the promoter group in 1990 and expanded activities into manufacturing of highest grade liquors. Extra Neutral Alcohol is a vital ingredient in the making of an alcoholic beverage. AABL supplies this vital ingredient to many leading manufacturers under a special agreement. In the IMFL segment, the company has an understanding with reputed companies like Diageo (owner of brands like Smirnoff vodka and Johnnie Walker Scotch Whisky), Mason and Summers and Diageo-Radico. These companies buy a total of 55-60% of the total IMFL produced by AABL. The balance production is used for direct supplies to the branded suppliers across the country, apart from manufacturing its own branded products.
AABL’s distillery is located in Khodigram, in the Khargone district of Madhya Pradesh. It has a present distillation capacity of 42 MLPA. The distillery is presently undergoing a series of transformations that will result in increasing its expanded capacity to 65 MLPA. AABL supplies Extra Neutral Alcohol (ENA), a vital ingredient, to many leading manufacturers under a special agreement. In the IMFL segment, the company has an understanding with reputed companies like Diageo (owner of brands like Smirnoff vodka and Johnnie Walker Scotch Whisky), Mason & Summers and Diageo-Radico. AABL has for long been recognized as one of the finest suppliers of high quality ENA in the Indian market. The company’s relationships with leading international and national brands bear ample proof.
AABL has chalked out a huge greenfield expansion plan to capture domestic and international demand and serve all the segments of alcohol ranging from country liquors to IMFL. This plan includes setting up a multi-pressure ENA plant, a collector plant, a Reverse Osmosis Water Treatment Plant and a 2 MW power plant. AABL is setting up a multi pressure ENA plant. This plant will completely replace the older plant and increase its production capacity from the present 42 MLPA to 65 MLPA. The multi-pressure ENA plant cuts down the stages in the manufacture and thus improves process efficiency.
Business areas of the company:
AABL is engaged in the business of bottling vodka and scotch whisky for large reputed international brands. AABL is also one of the only liquor companies bottling single malt scotch whisky (Glen Drummond) for the leading liquor group Mason & Summers. AABL has a ten line bottling operations in two different sections. It packs about 45,000 cases per month and has a production capacity of around 42 million litres per annum (MLPA).
Brands:
London Bridge gin
James McGill whisky
Red & White whisky
Bombay Special whisky
Jamaican Magic rum

Hai Ayush can you throw some light on the liquor ban in bihar and any effect on this with relation to that even though I know bihar contributes only 5% in total liquor sales of the country and AABL sales will not be effected since it is on madhyapradesh

My query is with association with such high power brands and there ability to cater to the niche premium whisky and vodka market why the company is not putting a website with full details is there any conditions or no disclosure something like that can you please enlighten

3 Likes
41

Now with some states trying liquor ban AABL type of companies will be an added advantage because these type of companies are present in all value chain of liquor industry since they are into bottling supplying grain spirit to major brands thy will be able to sustain better than pure IMIL companies targeting a specific state
But if senior boarders has a view on this please do share it will be helpful