Multibagger share: Globus Spirits share price rose from ??316.90 to ??1,439 each (as of 2:24 p.m. today) over the past six months, delivering an approximate 350% return to its shareholders during that time. However, with the aggressive product launch and expanding geographic presence coupled with an experienced management team, HDFC Securities believes that the brewery stock still has the potential to generate a clear bullish movement and move up to ??1,761 levels per share over the next two quarters.
Highlighting fundamentals that could drive a further rise in the multi-bagger share price, the HDFC Securities report states, âGlobus Spirits has successfully grown from a grain-based bulk alcohol manufacturer to a player in 360 degree alcoholic drinks. While the company’s manufacturing activity (ethanol / ENA) is likely to drive short-term growth given the huge tailwinds, management’s primary goal is to expand the footprint of its business from consumption, which we believe is also crucial for long-term success and the revaluation of stocks beyond a certain point. product launch and expansion of geographic presence coupled with an experienced management team, we believe GSL is well positioned to ride the rise in alcoholic beverage consumption in India, driven by the underlying demographic advantage and change perception towards alcohol. “
The HDFC Securities report says the country’s largest liquor maker and distributor is âredefiningâ country spirits in India, creating a new category called âpremium country alcoholâ or medium alcohol, with the launch of India’s first ENA-based country liquor brand – Nimboo.
âWe believe that average alcohol can be a game-changer in the future. In addition, the company is also exploring opportunities for geographic expansion to achieve a higher growth rate. Additionally, GSL has made a foray into premium IMFL through its portfolio owned a thin asset model focusing on the high growth, low volume premium segment, âsays the brokerage.
Regarding the valuations of this selection of multibagger stocks, the HDFC Securities report said: âGlobus Spirits has announced an increase in its EBITDA margin over the last 6 consecutive quarters, reaching a high of 26.5% in the first quarter of fiscal year 22. Stable working capital, lower tax disbursement than availability of MAT credit and reduced interest charges led CFO to improve ??148.4 crores to FY21 from ??30.6 crores in FY19. The company strengthened its balance sheet by reducing its debt by ??75 crore despite ongoing investments. Strong cash flow generation will further contribute to debt reduction. “
Advising stock investors to buy this multibagger stock for a six month horizon, the HDFC Securities report said, âWe believe the fair value of the stock’s baseline scenario is. ??1,619 and the bullish fair value of is ??1761. Investors can buy the in stock ??1,454 to ??1,482 strip and add more on the dips to ??1,273 to ??1,297 tapes. “
Disclaimer: The opinions and recommendations expressed above are those of individual analysts or brokerage firms, not Mint.
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