GM Breweries Upper Circuit At 20%

GM Breweries share price surged 20% intraday from days

low of Rs. 470 and closed at Rs 546.65. The stock showed
a huge jump in volume by 10.50 times of its average 20
days volume. The stock was trading below its 9 month low
of Rs. 489.60 and made low of Rs. 442.55 on 4th Aug
2016. The 52 weeks high for the stock was at Rs. 936 on
8th Jan 2016.

Reason for fall in GM Breweries

Weak Quarterly Result: The Company registered a decline of 10.52% in its Net profit
from Rs. 14.06 crores (Before Exceptional Item) in FY16 March Quarter to Rs. 12.58
crores in FY17 June Quarter. GM Breweries revenue has gone down by 2.91% from
Rs. 91.70 to Rs.89.03 crores QoQ.

Bad news in Sector: The liquor companies were not included in the list of GST, the
benefit that liquor companies were expecting because of GST implementation has not
been granted by the government. Many states banned alcohol which has impacted the
overall growth of the industry.

Liquor Price went up: Liquor price increased by 20% due to increase in tax.

Reason for investing in GM Breweries

Zero Debt: GM Breweries is a Zero debt company.

Profit margin: GM brew has an excellent operating profit margin of 22.40% and the
net profit margin is at 16.24%.

Valuation: GM Brew is trading at very low PE multiple of 12.13 where the industry PE
ratio is 30 (approx).

Delivery Position: GM Brew showed tremendous surged in volume on 9th Aug 2016
by 100774 shares where the 20- day average volume for the stock is 38215 shares,
however, had the delivery position for 28734 shares and the stock traded in a range of
Rs. 489.95 to Rs. 445.00. On 4th Aug GM Brew had a huge delivery position of 14425
and share traded in a range of Rs. 480.00 to Rs. 442. Therefore Rs. 442 becomes a
good support for the stock.

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Investment Opinion
GM Breweries share price fell by 36% from its recent high of Rs. 691 made on 29th June
2016. Looks like that worse is over for the stock; however, Rs. 442 will act as a crucial
support for the same. We suggest buying in GM Breweries at correction of Rs. 480 to
Rs. 500 levels.

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Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways
are solely the personal views of the research team. Users are advised to use the data for the
purpose of information and rely on their own judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022
Disclosure
Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also
engaged in Investment Advisory Services and Portfolio Management Services. Dynamic
Commodities Pvt. Ltd., associate company, is a member of MCX & NCDEX. We declare that our
activities were neither suspended nor we have defaulted with any stock exchange authority with
whom we are registered. SEBI, Exchanges and Depositories have conducted the routine inspection
and based on their observations have issued advise letters or levied minor penalty on for certain
operational deviations.
Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst:
DYNAMIC/its Associates/ Research Analyst/ his Relative:

Do not have any financial interest / any actual/beneficial ownership in the subject
company.

Do not have any other material conflict of interest at the time of publication of the
research report

Have not received any compensation from the subject company in the past twelve months

Have not managed or co-managed public offering of securities for the subject company.

Have not received any compensation for brokerage services or any products / services or
any compensation or other benefits from the subject company, nor engaged in market
making activity for the subject company

Have not served as an officer, director or employee of the subject company

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