RATING

RECOMMENDATION

Neutral

  • ROFR Required
  • Available in Depository:

  • NSDL

  • CDSL

  • Available for Investment:

  • Primary

  • Secondary

RATING

RECOMMENDATION

Neutral

Business Type

Traditional Business

RATING

RECOMMENDATION

Neutral

Business Type

Traditional Business

Get info on Blossom Industries stock price before buying, selling and investing - Read our Research report on Blossom Industries management For Information like - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News.

ISIN

INE264D01026

Face Value

₹3.00

Total Share

3,68,91,700

Total Income

₹218.16 Cr

Profit After Tax

₹11.53 Cr

EPS

₹3.13

P/E

47.92

P/B

3.73

Market Capitalisation

₹553.38 Cr

Enterprise Value

₹641.94 Cr

Book Value

₹40.25

Earnings Yield

2.09 %

Sector

Consumer Staples

Sub-sector

Agro Products

Category

Delisted

Cashflow - Operations

₹0.50 Cr

Cashflow - Financing

-₹46.12 Cr

Blossom Industries Growth

Compounded Sales Growth

  • -41.55%

    1 Year

  • -15.14%

    3 Year

  • -9.96%

    4 Year

Pro Only

Compounded Profit Growth

  • -44.51%

    1 Year

  • -10.07%

    3 Year

  • -9.27%

    4 Year

Pro Only

Return On Equity

  • 7.77%

    2021

  • 22.52%

    2019

  • 17.76%

    2018

Pro Only

About Blossom Industries

  • The company is primarily engaged in manufacturing of beer business. The manufacture the beer under the name of TAG. The Khemani Group acquired Blossom Breweries Ltd. in March 2000. 
  • The manufacturing plant is located at Daman.
  • The company was incorporated on August 10, 1989, under the Companies Act of 1956.


  • Blossom Industries IPO Details

Currently, the company has no plans to go public.

  • Blossom Industries Merger & Acquisition

Acquisition

  • Blossom Industries Limited (BIL) began brewing operations in 1994 under separate management. It was acquired by Khemani Group in 2000 and has continued to grow since then. 
  • Blossom Industries Subsidiaries

The company does not have any Subsidiary/Joint Venture/ Associate Companies

Blossom Industries Business Model

The company has its own manufacturing facility, which allows it to collaborate with third-party licensees to produce beer.

  • Blossom Industries Revenue Segmentation

  • Revenue generated from manufacturing of beer
  • Other Income
  • Blossom Industries Product & Services

Manufacturing Of Beer:

Under a license agreement with United Breweries Limited and Anheuser-Busch Inbev Ltd. (previously known as SAB Miller), the company manufactures beer under a variety of brands.

  • Blossom Industries Assets

Tangible Assets as on March 31 2021:

Assets Rs. in (Cr.)
Freehold Land1.4
Lease hold Land0.14
Buildings177
Plant and Equipment's1186
Office Equipment's0.6
Furniture2.1
Vehicles1.5
Computer Equipment's.0.45

Intangible Assets as on March 31 2021:

AssetsRs. in (Cr.)
Computer software0.37


 

  • Blossom Industries Industry Overview

Industry Statistics

  • Beer is one of the most popular alcoholic beverages produced by extracting malted cereal grain, flavored with hops, and brewed by slow fermentation.
  • The beer market was valued at 5,533.73 Mn ltrs in terms of volume in FY20 and is expected to reach 9,004.74 Mn ltrs by FY25, expanding at a CAGR of 11% during the FY21 – FY25 period.
  • The maximum levels of beer consumption in India are observed in the southern states. The healthy growth rate for the beer industry is an indication of the huge potential of opportunities open for breweries and beer brands marketing and/or manufacturers in India.

Based on type, the market is segmented into strong beer, mild beer, and craft beer.

Strong Beer:

  • Strong beer contributed the largest revenue share in FY20, while the craft beer segment is estimated to be the fastest-growing segment over the forecast period.
  • In terms of volume of strong beer, the market was valued at 4,379.87 Mn ltrs in2020 and is expected to reach 5,728.16 mn ltrs by FY25, expanding at a CAGR of 5% during the FY21 – FY25 period.
  • The Indian beer market continues to grow in line with expectations. Industry volumes grew at a CAGR of 8% during the last five years. There has been a trend of emergence of brew pubs in large cities such as Bengaluru, Pune and Gurgaon over the last few years.
  • The Indian beer market continues to grow in line with expectations. Industry volumes grew at a CAGR of 8% during the last five years. There has been a trend of emergence of brew pubs in large cities such as Bengaluru, Pune and Gurgaon over the last few years.

Mild Beer:

  • The mild beer segment was valued at 1,098.53 Mn ltrs in FY20 and is expected to reach 1,599.79 Mn ltrs by FY25, expanding at a CAGR of 8%.
  • A significant number of young consumers are showing preference for low or no alcohol content variants of beer over strong beer due to their increased health concerns.

Craft Beer:

  • According to a study conducted in FY18, more than half of Indian consumers like experimenting with new alcoholic drinks, and majority of them are willing to pay more for better quality alcoholic drinks.

Impact of Covid-19

  • In the wake of the pandemic the beer market was severely impacted. There was a ban on the sale of alcoholic beverages for about 40 days during the first two phases of the lockdown. The ban had affected both retail sellers as well as the manufacturers of beer.
  • Furthermore, the World Health Organization (WHO) associated alcohol consumption to weakening of immunity, which demotivated the consumers from buying beer.
  • The entire market experienced about 25% decline in sales in the first quarter of FY20 from the last quarter of FY19.
  • Various states introduced COVID cess (an additional cess to fund extra spending due to the pandemic) on liquor, between 10% and 75%, which increased the overall prices of the alcohol including beer by a high margin.
  • In India, beer is taxed 60% higher than stronger spirits in spite of having a low alcohol level.
  • Due to the statewide lockdown, imports and exports also decreased dramatically following the March FY20 quarter. Imports and exports were at their lowest in the June FY20 quarter, at 1832 kilolitres and 1918 kilolitres, respectively. According to CMIE data, beer imports are predicted to increase by 9% in FY22, while exports are expected to increase by 36%. Beer has a -13% CAGR till FY21, and a 10% CAGR is expected from FY21 to FY26.


Trends:

  • Tapping into the health & wellness trend, the low- and no- alcohol category is likely to see some of the most innovation and evolution across the whole industry, offering consumers more variety, better tasting and higher quality products. The biggest challenge will come to wine producers, who will need to invest in R&D to create an alcohol-alternative that appeals in terms of both quality and taste.
  • Primarily driven by a demand for convenience, the e-commerce channel to be worth US $45.5 bn by FY24, significantly outpacing the growth rate of total trade over the next five years. China remains by far the biggest online market for alcoholic drinks, with a turnover of over three times the size of the next largest markets, France and the US.

Peers:

  • Some of the company's competitors include Carlsberg India Pvt Ltd, Mohan Meakin Ltd, and United Spirits Ltd.

Future Prospects

  • India is one of the fastest growing alcoholic beverages markets globally with an estimated market size of 52.5 bn dollars (about Rs 3.9 lakh crore), the Indian Council for Research on International Economic Relations (ICRIER) has said.
  • The number of people consuming alcohol increased from 21.9Cr in FY05 to 29.3Cr. in FY18 and is projected to increase to Rs38.6Cr. by FY30.
  • Pub and bar culture in India is escalating at significant pace, and is becoming more popular in the age group of 20-45 yrs. Further, the market is anticipated to grow at a CAGR of 11% over the forecast period as alcohol consumption is growing in urban areas of the country.
  • The global alcoholic-beverages market is expected to grow from $515.2 bn in 2019 to $528.5 bn in FY20 at a (CAGR) of 3%. The low growth is mainly due to economic slowdown across countries owing to the COVID-19 outbreak and the measures to contain it. The market is then expected to recover and grow at a CAGR of 7% from FY21 and reach $647.7 bn in FY23.
  • Based on product type, non-craft beers accounted for the largest market share. On the other hand, craft beers being the niche concepts in India have started growing for past few years and are beginning to take shape now.
  • Further, the craft beer segment is expected to reach US 900 mn by the end of the FY30.  
  • The share of the upper-middle income group in alcohol consumption has increased steadily from 7% to 21% and is expected to increase to 44% by FY30.

Some of the projects that are expected to get commissioned by the end of the current financial year are as follows :

  • Uttam Sugar Mills is going to commission molasses based distillery plant with capacity to produce 16.5 thousand kilo ltrs of alcohol per annum. The project also includes setting up of co-generation power plant of three mw capacity. The project will entail a cost of Rs.650 Mn. The project is likely to come up by year end.
  • Ganpati Sugar Industries will set up molasses based distillery unit in Chowtkur, Telangana with a capacity to produce 9.9 thousand kilo litres of alcohol per annum. It will also commission an electricity unit of two mw. This project is likely to come up by March 2021 and will cost Rs.574.5 Mn.
  • Centurion Industries is setting up a molasses/grain-based distillery at Abdulpur Munna in Uttar Pradesh. The plant will have the capacity to produce 19.8 thousand kilolitres of alcohol in a year.

Government Initiatives

  • High Taxation: Alcohol is a state subject and the aim of most state policies is to earn revenue from alcohol products. Most states derive around one-fifth of their revenue from alcohol taxation, which is their second largest source of income after sales tax. All this is true of many emerging economies of the world, but what is markedly different in India is that beer (4-7% alcohol) gets taxed at the same rate as other spirits that have over 40% alcohol. This means lesser value for money for beer drinkers. Beer in India is thus much more expensive compared to other comparable countries inhibiting growth of the category. Excise increases by some states are extremely steep, and thus even if the rise is passed on to consumers, there is an adverse impact on volumes which can even last for a couple of years. On the other hand, if companies do not pass on the excise increase, it leaves them with a hit on the EBITDA margin front
  • Ban on Advertisement:  Advertisement for alcoholic brands is banned in India and companies has to use surrogate advertisement as the last reost. Surrogate advertising involves advertising for products (non-alcoholic) that use the same brand name as the alcohol products. For example, many alcohol companies advertise music CDs, packaged drinking water and other items under the same brand name as their alcohol product. 
  • The Ministry of Food Processing Industries which is the Central Government Nodal Agency on Alcohol Policy had set up a “Joint Working Group on Rationalization of Excise Policy and Taxation” in December 2001 and came out with a “Model Excise Policy and Excise Act” to be adopted and implemented in all the States and Union Territories in the Country. The Ministry has called for public opinion on the new Model Policy through press advertisements in June FY05. However, the Government is yet to take a final decision with regard to the Draft Model Policy and Excise Act.
  • The Ministry of Social Justice and Empowerment which is the Central Government Nodal Agency on Demand Reduction had set up a Sub Committee under the National Consultative Committee on De-addiction and Rehabilitation (NCCDR) in February FY09 to prepare a National Policy on Substance Use. A Draft Policy was developed and after being reviewed by expert groups, it was submitted to the Parliament Subject Committee in FY12 and awaits final approval of the Government.

Government Regulator:

  • The Food Safety and Standards Authority of India (FSSAI) regulates alcoholic beverages in India to guarantee that they are consumed in a safe and legal manner.

Blossom Industries Strengths

  • The company has long been a beer manufacturing partner of United Breweries and AbinBev demonstrates the huge organizations' trustworthiness.

Blossom Industries Shortcomings

  • In FY20,the company has taken a higher long-term loan from Axis Finance Limited on the Company's entire movables and immovable properties, current and future, including an inter-corporate loan of Rs.130Cr. It is important for the company to repay the loan in the given period.
  • Company needs to look after the cash flow management, company is not earning sufficient amount of cash from its operations to cover its expenses.

Blossom Industries Opportunities

  • The beer market was valued at 5,533.73 Mn ltrs in terms of volume in FY20 and is expected to reach 9,004.74 Mn ltrs by FY25, expanding at a CAGR of 10.89% during the FY21 – FY25 period, hence provides a great market opportunity. 
  • In India, beer is the second-most popular alcoholic beverage in the country, after whisky.
  • The total market consumption was about 100Mn. cases in FY05 which has crossed over 300Mn. cases in FY19.

Blossom Industries Threats

  • The governance and pricing models for alcoholic beverages vary widely across the states. The states through their excise policies, control the entire supply chain of alcoholic beverages from manufacturing and distribution to registration and retail.
  • Unlike other consumer products, advertising of alcohol is not permitted in the media. This restricts awareness of products and new launches. Alcoholic beverage companies have to take the resort of surrogate advertising, hoardings at alcohol vending outlets and sponsorship of sports/ music events, but the impact of ban on direct advertising does affect growth.
Blossom Industries Rating

  • RECOMMENDATION

    Neutral

  • Blossom Industries Detail Info

Industry Statistics

PRIVATE LIMITED

Registered In

India

last Updated

18/02/2022

Registered Date

10/08/1989

Planify Ticker

BIL

Reg Office: Village Jani Vankad, Mr. Girikrishna Maniar Nani Daman, Daman - 396210 (U.T.)

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