Skip to 14th min for the interview with Mr.Jagdish Arora. https://www.youtube.com/watch?v=E5uMIG4TDdg
Mgmt. spoke about aspirational targets of growing 10x in next 6-7 years !! First requirement for growth is aspiration ?
Som is now in 4th place in the overall beer market (behind UB+Heinkein, Budweiser, Calrsberg) even though their geographical presence is limited to only few states. it’s the fastest growing beer brand in last 2-3 years. Wherever they are present, they are no.2 and have gained market share over last few years. They have eyes set on large potential markets like MH, RJ, UP, Telengana, Andhra, TN, which all are 30mn+ cases market.
Capacity : Already using 100% in MP, 110% in Karnataka, Odisha completed capex in July but utilizing >50% (also had tie up with Carlsberg which will take utilization to 100%). Beer as a product is viable mainly with local state production. Possible only via acquisition or greenfield. UP – Planning a greenfield (6th largest country in the world in terms of market size !!)
Debt : Reduced from 250 to 150 cr. QIP coming in this month for 350 cr.
Margins: Raw material – Malt (impacted as it comes from Ukraine), Packaging material was impacted due to HNG (Produced 70% of glass bottles for beer industry) went into NCLT. So price increases taken will stay, raw material pressure will ease, profitability will increase. Plus operating leverage from capacity utilization.
Market Size : 370 Mn cases all India. Som has sold around 15Mn cases in FY23. Total 400 Mn cases market estimate for FY24. Our market share is 12% in the markets Som is present. In 5-6 years this 400 Mn market will increase 700-800 Mn cases. Assuming we can get 20% market share on all India basis in this time, we can be a 10,000 cr. revenue company in 5-6 years.
Disc: Invested and transaction in last month
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