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RECOMMENDATION

Strong Buy

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RATING

RECOMMENDATION

Strong Buy

Business Type

Emerging Leader

Discover and get a complete analysis on Mohan Meakin Limited - Management, Business Model, Financials, Growth, Valuations, Funding Rounds, News and get latest updates on Mohan Meakin Upcoming IPO.

ISIN

INE136D01018

Face Value

₹5.00

Total Share

85,08,479

Total Income

₹1,101.87 Cr

Profit After Tax

₹40.31 Cr

EPS

₹47.38

P/E

27.86

P/B

8.13

Market Capitalisation

₹1,123.12 Cr

Enterprise Value

₹1,094.19 Cr

Book Value

₹162.31

Intrinsic Value

₹3,209.00

Earnings Yield

3.59 %

Sector

Consumer Staples

Sub-sector

Beverage- Alcoholic

Category

Upcoming IPO

Cashflow - Operations

₹29.70 Cr

Cashflow - Financing

-₹9.19 Cr

Mohan Meakin Growth

Compounded Sales Growth

  • 7.21%

    1 Year

  • 18.61%

    3 Year

  • 19.51%

    5 Year

Pro Only

Compounded Profit Growth

  • 52.62%

    1 Year

  • 38.03%

    3 Year

  • 62.52%

    5 Year

Pro Only

Return On Equity

  • 29.19%

    1 Year

  • -67.78%

    3 Year

  • 10.69%

    4 Year

Pro Only

About Mohan Meakin

  • Mohan Meakin Limited (MML) is a large conglomerate that began with Asia's first brewery. Manufacturing alcoholic and non-alcoholic beverages is the Company's main business.
  • The company has been a pioneer in the liquor industry and has made steady progress, established breweries and distilleries in various parts of the Country.
  • Solan, Kasauli, Mohangram, MohanNagar, Bhankarpur, and Lucknow are among the company's manufacturing sites.
  • Edward Dyer founded MML in 1855 (although it was founded much earlier) at Kasauli in the Himalayan Mountains of India under the name Dyer Breweries.
  • The name of the company with Indian assets and liabilities was changed from Dyer Meakin & Co. Ltd. to Dyer Meakin Breweries Ltd. in 1935, and the Burma Brewery assets and liabilities were separated.
  • Following that, the name of the company was changed from Dyer Meakin Breweries Ltd. to Mohan Meakin Breweries Ltd. in 1966, and then to Mohan Meakin Ltd. in 1980, and the company is now known as Mohan Meakin Limited.

  • Mohan Meakin IPO Details

  • The company has filed documents to re-list on the exchanges with the Metropolitan Stock Exchange (MSE).
  • The 163-year-old corporation is considering re-listing its equity shares on the Delhi and Calcutta stock exchanges, some 16 years after they were de-listed.
  • The company has not filed any DRHP for the IPO as of now.

  • Mohan Meakin Merger & Acquisition

Investments

Long Term Investment as On 31 March 2021:

(All amounts in Rs. Lacs unless otherwise stated)


  • Mohan Meakin Subsidiaries

The does not have any subsidiaries or associate companies as specified by section 129(3) of the Companies Act, 2013.

Mohan Meakin Business Model

The company makes both alcoholic and non-alcoholic products and makes money from them.

  • Mohan Meakin Revenue Segmentation

  • Revenue generated from Manufacturing of goods
  • Revenue generated from trading of goods
  • Revenue generated from other operations
  • Revenue generated from other sources
  • Mohan Meakin Product & Services

Products & Services:
The company’s segments include:
  • Alcoholic products (including Premium Rums, Whiskies, Brandy
  • Non-alcoholic product (including Juice, Vinegar, breakfast foods      
Alcoholic products:
  • Whiskies: Summer Hall, Colonel’s Special, Golden Eagle, King Castle, etc.
  • Beers: Golden Eagle Deluxe Premium Lager, Gold lager Beer, Golden Eagle Super Strong, etc.
  • Brandies: Triple Crown, Doctor’s Reserve No.1, MMB, etc.
  • Rums: Old Monk the Legend, Old Monk Supreme, Old Monk Gold Reserve, etc.


Non-Alcoholic Products:
  • Juices
  • Mineral Water
  • Breakfast Foods
  • Vinegars
Other Business:
  • Manufacturing of Glass Bottles.
  • Exports: Beer, Rum, and Whisky-the company exports some of its products like Old Monk, Lion Beer and Solan Whisky to 13 countries which include USA, UAE, and Russia.
  • Mohan Meakin Assets

Assets as on March 2021

AssetsAmount (IN Cr.)
Freehold Land 1.36
Building 6.85
Plant and Machinery 43.67
Lab Equipment's0.48
Office Equipment 0.60
Furniture 0.66
Vehicles 1.31
Computer

0.12

  • Mohan Meakin Industry Overview

Industry Statistics

  • The term "alcoholic drink" refers to a beverage made by the fermentation of grains, fruits, and other sugar sources. The fermentation process produces wine, beer, and spirits, which is a natural byproduct of yeast digestion of the sugars found in the raw materials used.Beer is one of the most well-known alcoholic beverages, and it is made out of malt, rice, hops, and maize.
  • At a compound annual growth rate (CAGR) of 2.6 %, the worldwide alcoholic beverage industry was predicted to expand from $515.2 bn in FY19 to $528.5 bn in FY20. The poor growth is primarily attributable to a global economic slowdown caused by the COVID-19 epidemic and the actions taken to combat it. From FY21 to FY23, the market is predicted to recover and increase at a CAGR of 7%,reaching $647.7 bn.
  • According to CARE Research, India's alcohol business is the world's third largest, at $35 bn. The Indian alcoholic beverage business is one of the world's largest, coming in second only to China and Russia. Whiskey, brandy, rum, and vodka are among the spirits produced in India.
  • According to the Indian Council for Research on International Economic Relations (ICRIER), India has one of the fastest growing alcoholic beverage marketplaces in the world, with a market size of $52.5 bn (about Rs 3.9 lakh crore).Till FY23,the market is estimated to increase at a CAGR of 6.8%.
  • IMFL is a byproduct of sugar production that is used as a raw material in the production of potable alcohol and ethanol. Despite high duties, India is the world's fastest-growing producer of IMFL. It is also the most appealing destination for international alcohol beverage companies. Due to the COVID-19 pandemic, IMFL production and consumption will decrease in FY20 and FY21. According to data from the Centre for Monitoring Indian Economy (CMIE), IMFL imports are predicted to increase by over 12% in FY2022, while exports are expected to increase by roughly 2.41% IMFL is expected to grow at a CAGR of 12% till FY21, and then at a CAGR of 3% from FY21 to FY26.
  • Although India had its first brewery in 1830 (in Kasauli, later transferred to Solan) and there has been consistent beer use over the centuries, beer has only recently become a popular beverage in the country. Strong beers make up the majority of the beer category (with an alcohol content of at least 8 percent ). Beer production fell by 5.2% in FY20 and is expected to fall by roughly 47.18% in FY21, owing primarily to COVID-19 lockdowns. Now that the economy is reopening in stages, we foresee an uptick in production trend. According to CMIE data, beer imports are predicted to increase by 9.42% in FY22, while exports are expected to increase by 36.38%. Beer has a CAGR of 13 % till FY21, and is expected to grow at a rate of 10% from FY21 to FY26.
  • The modern Indian wine market is modest but expanding; annual per capita wine consumption in India is only 9 millilitres, or about 1/8000th of that in France. The main reason for this is that Indians prefer hard liquor and beer, which account for about 98 %, whereas wine with low ABV accounts for barely 2% of the market. On the other hand the consumption of both local and scotch whiskies in India, which is the world's largest growth market for that spirit category, will move the whiskey market forward. According to International Wines and Spirits Record (IWSR) data, scotch is predicted to contribute 10.5 mn cases to total whiskey growth, while others (mostly Indian) are expected to increase 28.2 cases.

Emerging Trends in Alcohol Beverages Industry :

  • The Growth of Low- & No- Alcohol - Taking advantage of the health and wellness trend, the low- and no-alcohol category is expected to see the most innovation and evolution throughout the whole sector.
  • Ecommerce & Technology - The ecommerce channel is expected to be valued US$45.5 Bn by FY24, greatly exceeding the growth rate of global trade over the following five years, owing to a need for convenience. 
  • Brand Ethics & Packaging Innovation - As consumers become more environmentally conscious, firms will be asked to share their approach to ethical and sustainable living.

Government Regulator:

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

Peers:

  • United Spirits, United Breweries, Radico Khaitan, and other alcohol and non-alcohol manufacturing enterprises are among the company's main competitors.

Future Prospects

  • The global market for alcoholic beverages was estimated to be worth approximately $1.49 Tn dollars in FY20. According to Statista's Consumer Market Outlook, the global market for alcoholic beverages will grow to almost $2.2Tn dollars by FY25.


Alcohol Industry by Volume:


  • The worldwide alcoholic beverage industry is predicted to expand at a compound annual growth rate (CAGR) of 2.6 % from $515.2 Bn in FY19 to $528.5 Bn in FY20. The poor growth is primarily attributable to a global economic slowdown caused by the COVID-19 outbreak and the efforts taken to contain it. From FY21, the market is predicted to recover and increase at a CAGR of 7%, reaching $647.7 Bn in FY23.


  • 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 2020 quarter, at 1832 kilolitres and 1918 kilolitres, respectively. According to CMIE data, beer imports are predicted to increase by 9.42 % in FY22, while exports are expected to increase by 36.38%. Beer has a -13% CAGR till FY21, and a 10% CAGR is expected from FY2021 to FY2026.



Government Initiatives

  • Due to the impact of the COVID-19 epidemic, the Indian Beverage Association ("IBA"), the industry's leading non-alcoholic beverage trade association, presented a proposal to Finance Minister Nirmala Sitharaman for GST remission on the industry's products. Carbonated soft drinks are taxed at a rate of 40% under the present GST regime, as they are assigned to the 28 % GST slab plus an additional 12 % compensatory cess. If other sugar-laden food and beverage goods were transferred to lower GST slabs, colas and other carbonated soft drinks, according to the IBA, should qualify for GST reductions. As a result, the IBA requested that the Finance Ministry abolish the 12% compensation cess, relocate juice-based drinks from the 12% to the 5% GST slab, and packaged drinking water from the 18% to the 5% GST slab.
  • The FSSAI informed the beverage production industry of its new draught directive for alcohol-free beer in July 2020. The Food Safety and Standards (Alcoholic Beverages) Regulations of the FSSAI state that Alcohol-free beer is defined as beer having an alcohol-by-volume ("ABV") content of 0.0 percent or less. Beers with an alcohol by volume (ABV) of 0.5 percent to 5.0 percent are also allowed, according to the rules.Beers with an ABV of 5.0 percent to 8.0 percent are classified as Regular or Mild, whereas those with an ABV of 5.0 percent to 8.0 percent are classified as Strong.as well as strong brews The beer laws would not apply to alcoholic beverages with higher alcohol by volume (ABV).However, under existing alcoholic beverage standards, these beers can only be labelled as "low-alcoholic," not "alcohol-free."
  • 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.
  • Excise duty on alcohol is the third-largest source of own tax revenues for states, with an estimated contribution of 12.5 per cent in 2019-20. The state goods and services tax (SGST) and sales tax/value-added tax on petroleum products are the largest sources of revenues for most state governments.

Mohan Meakin Strengths

  • Observing the market trend and rising demands for Beer in Cannes. To accommodate consumer demand, the company has also installed a canning plant to meet the consumer demand.
  • According to the Indian Council for Research on International Economic Relations, India is one of the world's fastest-growing alcoholic beverage markets, with a market size of $52.5 billion (about Rs3.9 lakh crore) (ICRIER). As a result, it might be a tremendous opportunity for the company to increase their business and broaden their horizons, especially because they currently have a strong market reputation for their premium alcoholic beverages.
  • The company's "Old Monk" brand has a loyal client base, and despite the fact that the liquor business has been hampered by a few state governments' bans in recent years, liquor consumption has climbed dramatically. It accounts for roughly 80% of Mohan Meakin's overall revenue. 

Mohan Meakin Shortcomings

  • In the mid-2000s, the market began to shift toward premium (expensive) brands. McDowell's increased the price of Celebration Rum, which was strategically priced 20% higher than Old Monk. However, Mohan Meakin only produced a few premium kinds, unable to capitalise on the emerging premium brand trend..
  • Managing logistics and retail distribution is a vital component of a liquor brand's business. It must also be adaptable in order to respond to changing government policy. On both counts, The company failed. It had entrusted third-party distributors with its distribution. And neglected to keep a close eye on them. As a result, bad decisions about the trade channel were made.

Mohan Meakin Opportunities

  • The U.P. Government has revised the excise policy and made it Industrial Friendly w.e.f. 01/04/2018, as a consequence of which the company will be able to significantly raise its sales of various brands of liquor and beer in the state of U.P., which had significantly decreased over time. The effects of the shift in excise policy can be seen in the company's overall performance in recent years.
  • The development of liquor home delivery is one of the most significant changes now occurring in the alcoholic sector, as the concept of having a glass or two at a bar or lounge appears risky. As a result, some alcohol firms are researching ways to promote the trend of "liquor on your doorsteps" in conjunction with state authorities around the country. Big Basket, a popular glossary delivery platform with a pan-India reach, has listed the Company's rum items. Customers will be able to purchase things more easily as a result of this.



  • Sustainability is gaining traction in both the domestic and international alcohol beverage markets. Diageo has announced the creation of a paper-based spirits bottle that is 100% plastic-free and constructed from sustainably sourced wood. Being environmentally friendly is a necessity for the environment, and it also helps the firm boost its brand image in the market and demonstrate a positive attitude toward the environment.
  • Breakfast Cereals Market in India is predicted to develop at a 6.50 percent CAGR. Mordor Intelligence claims this. As the corporation has broadened its horizons, it has entered the cereal market under the brand name. "Mohan's New Life" is a brand of corn flakes created by Mohan Meakin. It might be a fantastic opportunity for the company to expand in the cereals sector.

Mohan Meakin Threats

  • High Taxation - In India, state governments are in charge of alcohol, and tariffs on alcohol account for more than 25% of state revenues (and up to 40% in a few states). After sales tax/VAT, it is the second greatest revenue generator for most states. Alcohol is a major source of additional money for many cash-strapped states.
  • Government control over supply, distribution and pricing - For a country with a population of 1.3 billion people, there are only 90,000 beer outlets. This is far lower than other emerging markets in terms of per capita income. In India, there is one beer outlet for every 20,000 people, whereas in China, there is one outlet for every 200 people. In 70% of the country, the government determines product pricing, and price increases are not given on a yearly basis to account for commodity cost inflation, but only once every few years. Until then, the producer must absorb the cost rise.
  • Ban on advertising - 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.
  • Surrogate advertising of alcohol products - In India, alcohol businesses can lawfully promote their brands at points of sale because advertising of liquor products is prohibited. They recognize, however, that this is insufficient to increase sales. Because alcohol businesses are prohibited from advertising their products, they use covert advertising tactics like surrogate advertising. Surrogate advertising refers to the marketing of non-alcoholic items under the same brand name as alcoholic beverages. Many alcoholic beverage firms, for example, market music CDs, packaged drinking water, and other products under the same brand name as their alcoholic beverage.
Mohan Meakin Rating

  • RECOMMENDATION

    Strong Buy

  • Mohan Meakin Detail Info

Industry Statistics

PRIVATE LIMITED

Registered In

India

last Updated

22/12/2021

Registered Date

02/11/1934

Planify Ticker

Mohan Meakin

Reg Office: Post Office Solan Brewery, Distt. Solan (H.P)-173214

Website: https://mohanmeakin.com/