Som Distilleries and Breweries

Joined their AGM today. Mr. Arora did not join and their finance director, Nakul Sethi, chaired the meeting. He seems to be the only public person for the company interacting with shareholders of late. Also, no good questions asked. 3-4 shareholders who spoke seemed to be planted by the management as they only showered very random praises at the company.

That said, I can see first hand that their brand Hunter is doing very well in Delhi - kind of like how Kingfisher strong used to do back in the day. Woodpecker is actually one of the best beers I have had and when I learned that an Indian listed company makes it, I bought their shares.

While the management appears to have solid transparency issues, their products are strong. A conundrum for me personally.

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Same could been said about Vijay Mallya’s United Spirits and United Breweries. Still both the stocks have been a multibagger despite questionable management.
Disc- Invested

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Absolutely bang on Dr Harshil Rohit… Even I believe the same at the end of the day if company’s product is of good quality and reasonable price just what customers like…company shareholders are going to be benefited in the long term

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So funny. Only 20 days suspension and the government says we are punishing the violators. Permanent suspension should have been done.

I think SOM distelleries’s valuation has taken into account all the management issues and hence has a lower PE than peers like Tilaknagar.
Current promoters can just stay as stakeholders but should change the management, that can give a value boost to Som. Till then I’m out

Everything has been going right with the company… Growth, Capex, WC reduction, Decent ROE, newer brands, Higher penetration in the existing and new states, … Managmennt is dubious but i dont think stock deserves this valuation…

Disc… will sit on sidelines for some MF to come in

whatever mutual funds/ FIIs were there have exited in September 2024… it seems it will take a long time for them to come. only retail investors are holding…
as if doubtful governance was not enough… investor calls/ AGMs are extremely poor…

Discl - Following but not invested.

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Thought of sharing the below videos, which may be good for an understanding of the industry.

Looking at the whole thing, SOM does seem to have some potential and doing some right things recently, which are reflected in their numbers, also the Hunter and Woodpecker beers are pretty good.

Regarding, the management don’t expect them to be like that of U Breweries or U Spirits, as they are not in the same league altogether.

Still haven’t made a investment decision yet.

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This is the best summary on management of Micro cap companies.

Acquisition of 1,515,150 equity shares by promoters, good signs!!

this is conversion of warrants not bought from market. this allotment was done at Rs. 110 (post split) lower than market price at that time of Rs. 130. this says a lot about the intention of promoters. thankfully price has come down to 110.
companies with poor corporate governance will not get the right value as investors dont know what is going in the company.

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Thanks for the feedback.

Surprised at the relative stability in SDBL’s share price after the Madhya Pradesh government decided to ban liquor sales in 17 religious cities. The MP CM also hinted at eventually implementing a total ban in the state. Article: Madhya Pradesh bans liquor in 17 religious places; CM says move to be implemented across State gradually - The Hindu.
Could this be because the banned towns are relatively smaller and don’t contribute much to overall revenues?

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This was pointed out in the concall

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