Som Distilleries & Breweries woos Street with strong Q2 performance; should you buy/sell/hold shares now?

Som Distilleries & Breweries shares were in high demand on Monday after the liquor maker reported a strong set of financial numbers. The stock of Som Distilleries & Breweries, traded with the symbol SDBL, gained by as much as Rs 9.1, or 2.6 per cent, to Rs 355.3 apiece in morning deals on BSE. 

 After market hours on Friday, the company reported a standalone net profit of Rs 5.4 crore for the quarter ended September 30, marking a jump of 2.8 times compared with the corresponding period a year ago. Its quarterly revenue increased 83.7 per cent on a year-on-year basis to Rs 171.8 crore, according to a regulatory filing.

Its cost of materials consumed for the three-month period increased to Rs 82 crore from Rs 61.7 crore a year ago. 

Its margin improved by 640 basis points to 8.8 per cent for the September quarter.

Som Distilleries & Breweries expects the second half of the financial year to be better than the first, its founder and CMD JK Arora told Zee Business. Customers have accepted the company’s brands, he said. 

Arora also said that Som Distilleries is among the country’s top companies in the beverage sector. The company’s spirits unit is likely to benefit from the government’s move to reduce the GST applicable to molasses from 18 per cent to five per cent, he added.

Should you buy, sell or hold Som Distilleries & Breweries shares now?

Positive on the liquor maker’s growth prospects, Zee Business analyst Ashish Chaturvedi has a ‘buy’ call on Som Distilleries shares with a price target of Rs 360 and a stop loss at Rs 340. His target implies an upside of four per cent from the previous close.

 

(This story will be updated shortly)

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