Thread by @tweetojagdish

Let's decode #Globussprit business...
Globus Sprit is a Manufacturer of IMIL, IMFL, Bulk Alcohol and Franchise bottling.

@AimInvestments

Business Segments:
Consumer Business
Manufacturing Business

Consumer Business: High Value bus
Value: IMIL (Rs 40-60 per 180ml)
Value Plus: IMIL (Rs 80-95 per 180ml)
Premium: IMFL (125-700 per 180ml)

Manufacturing Business:
Manufacturing business includes bulk sprit sale including ethanol, Franchise Bottling and By-products.

Current Production Capacity:
1. Rajasthan: 160 KLPD
2. Haryana: 160 KLPD
3. Bihar: 80 KLPD
4. West Bengal: 110 KLPD + 140 KLPD recently commissioned in Q4'22.

Upcoming Production Capacity:
1. Jharkhand: 140 KLPD in Q1'23
2. Odisha: 140 KLPD- Land acquisition in process
3. UP: 140 KLPD- Land acquisition in process
Note: Odisha nd UP Capacity cud be commissioned in next 12-14 months.

Capacity Utilization:
1. Rajasthan: 80-85% consumed internally; rest cap used for Bulk ENA sale.
2. Haryana: Consumed internally as well as ENA sale.
3. Bihar: ENA and Ethanol sale
4. WB: Internally as well as ENA and Ethanol
Note: 150 KLPD Capacity used for Ethanol supply.

5. WB new capacity (140 KLPD) can be used for both ENA nd Ethanol.
6. Jharkhand capacity can also be used for both purposes. Hence capacity utilization wud be almost 95-100% at all plants.

Revenue Split:
Consumer Business: 40-45%
Manufacturing Business: 50-55%
In Q3'22 split was 50:50 due to plant closer in Haryana nd Bihar. In longer period it wud be around 45:55%

Future Growth Drivers:
Major revenue contributions:
140 Klpd in WB coming online in Q4'22
Another 140 Klpd in Jharkhand coming online in Q1'23
140 Klpd each in Odisha and UP in next 1-2 year
Total capacity going to be 1070 Klpd from current 510 Klpd. DOUBLE in next 1-2 years.

Few more growth drivers:
Continue increasing mkt share in Rajasthan.
New IMFL launches in Haryana
Product Re-branding and re-launch in WB.
Introducing new products in selected mkts.
Product launching soon in Delhi and UP.

Q3 Results- Weak results
Revenue growth: 9.7% YoY/-9.2% QoQ
Gross margin: Maintain 48.5-49% YoY/QoQ
EBITDA: -11.5% YoY/ -32.3% QoQ
Note: Gross margin maintains in spite of Input cost increase.

EBITDA decrease:
Increased prices of Fuel (Coal and Rice husk). Increased 18% QoQ.
Repair and maintenance of plants and machinery cud be another reason. Waiting for concall updates.
EBITDA impact of 25 Cr due to shutdown of Bihar and Haryana plant.
Higher cost of purchasing ENA

How Q4'22 looks like:
Going forward into Q4 company can do 500-525 Cr revenue.
Gross margin wud be more or less same as broken rice pricess not increasing much.
EBITDA cud be around 20%. I do not think company can maintain 23-26% EBITDA as Fuel prices hve increased.

How Q1'23 looks like-
If Jharkhand capacity comes online on time. It cud easy add another 100 Cr to revenue and 20 Cr to EBITDA.

Antithesis pointers:
Continue increasing Fuel prices.
Increase of Input manufacturing cost.
Shutdown of any plant
Govt liqur policy change. Increase/decrease prices of IMIL.
Note: Manufacturing cost was around 23-24% in FY18.

Q4'22 Results:
Good sales growth.
All plants running at optimum capacity.
EBITDA at 18%; better QOQ. Seems manageable at this level.

Expected Q1'23:
140 KLPD Jharkhand capacity will start commercial production by end of Q1.
So Q1'23 looks like similar to Q4'22 Results.
EBITDA shd be around 18-19%

Status of Projects:
140 KLPD Jharkhand capacity to be operational by end of Q1'23.
WB and Jharkhand: Started work on enchancing capacity by 60 KLPD at each location. Likely to be commissioned by Q4'23
Odisha: 200 KLPD; Land acquired
UP: 200 KLPD; Land acquisition underway

After good correction company trades at 11-12 PE of FY 23 earnings.
FY 23 EPS cud be around 78-80.

Total capacity by FY24-25
From current capacity of 665 company's total capacity wud be 1325 by FY24-25.

Tie-up for strategic, technical, manufacturing and manufacturing with Tilaknagar Ind Ltd located at Maharashtra. Total capacity: 140 KLPD
Service fee: % of EBITDA
Estimated revenue: 100 CR
Est EBITDA: 16-18 CR
Let's see wat % Globus gets out of EBITDA.

#Globussprit
Jharkhand capacity of 140 KLPD commissioning news might come any day now, if work is on track. It was supposed to be commissioned in Q1'23.

#Globussprit
Jharkhand project delay: is expected to commence its commercial operations in Q2'FY23 revised from Q1'23.

#Globussprit
Q1'23 result: Bad result
Revenue with expected line
EBITDA down to 14% from 18% QoQ

#Globussprit
Key factors for EBITDA decrease:
*Raw materials and other cost spike contributed in EBITDA degrowth.

#Globussprit
How cud be Q2'23 result:
Again Revenue shd be more or less same.
EBITDA: Margin will be possibly down a little more as per mgmt. Atleast next 2 quarters. Will bottom out in Q3'23.

#Globussprit
Finally Jharkhand capacity Commercial production started.

#Globussprit
Newly added capacity will not add much revenue in Q2,23. More margin pressure.

Q3'22 wud be better both revenue and margin. Wait....

#Globussprit
Q2'23 results...as expected. Revenue in line but margin is severely hit by input cost.
Jharkhand capacity commissioned. Will show improvement in Revenue in Q3'23.
Margin shd start improving as well.

#Globussprit
May be good time to start SIP for next 2 quarters....can go wrong.

#Globussprit
Abakkus plant visit.

#Globussprit
Q3'23 result on 14th Feb. Expecting good revenue growth and little improved EBITDA margin.
Revenue cud be around 570-580 Cr.

#Globussprit
Good revenue growth. Seems full capacity utilization.
Revenue on expected lines...
Revenue: 592 Cr
Profit: 26.9 Cr

#Globussprit
Q4'23 Results...
Sales down QoQ due to planned maintenance shutdown. Capacity utilization 88% in Q4
EBITDA improved QoQ due to power nd fuel cost lowered by 27% QoQ.
Overall looking good.

Capacity expansion Updates
Incremental Capacity of 60 KLPD each at WB and Jharkhand starting in Q1'24
19 KLPD at Bihar also coming live in Q1'24
200 KLPD in Orissa; construction to start in Q3'24
200 KLPD in UP; approvals in process

How cud be Q1'24:
Revenue cud be around 600 Cr
EBITDA may improve slightly due to price hike of Rs 40 per case for value Plus and 20 for value segment.
Additional capacity may start contributing from Q2'24 onwards...