Is Globus Spirits Stock A Good Buy Now? Best Insights [2025]

Is Globus Spirits Stock a Good Buy Now?

If you’re looking to invest in the Indian alcoholic beverage industry, but are concerned about the elevated valuation of these alcohol stocks in India, Globus Spirits could be a strong contender.

I’m bullish on Globus Spirits as a stock for investment purposes. The company is both fundamentally as well as technically strong at the current price of 988. My preference for Globus Spirits Stock at this price is based on its deceptively cheap valuation, strong forward guidance, and overwhelmingly favorable analyst outlook.

InCred Equities sets a target of ₹1,588, while InCred Research values the company at ₹1,599. The most important, the company maintains a healthy debt-equity ratio of 0.3x, indicating a strong financial position that could positively impact its valuation.

Overall, Gobus Spirits has carved a unique position for itself in both the consumer and manufacturing segments in alcohol and ethanol business. But the real question remains: is it a good buy right now? Let’s break down the reasons why it could be an attractive investment and what challenges lie ahead.

When comparing Globus Spirits to its fellow alcohol stocks, I found it cheaper than its peers. For example, United Spirits trades for 75.9x, and Radico Khaitan trades for 105x of September 2024 earnings. Globus Spirits is trading at 38.77x of September 2024 earnings. That’s the reason to feel optimistic about the Globus spirit.

Certainly, Globus Spirits is a smaller company related to United Spirit and Radico Khaitan. These companies have well-known brands and hence they deserve higher multiples than GSL. However, Globus Spirits is focusing on higher-margin categories like whisky, gin, and vodka while premiumization is in IMFL and IMIL products. It aims to create a wider portfolio to cater to evolving consumer preferences towards premium products.

GSL is also planning to launch RTD (Ready to Drink) products like “NOT OUT” in Delhi signaling a move towards catering to younger consumers, a high-growth category within the alcoholic beverages market.

Apart from new product launches, the company is also focusing on entering large markets like UP, driven by the potential for high volumes will help the company to boost its reach. GSL aims to replicate its success in established markets like Rajasthan, which continues to be a stronghold for its IMIL and regular IMFL offerings.

Globus Spirits Share Price analysis

Management’s Discussion on Future Outlook

The management remains optimistic about future growth, driven by capacity expansions, entry into new markets, and strategic product launches in premium categories. They expect profitability to improve with increased volumes and better state-wise penetration.
GSL has been shifting its raw material base from rice to maize, which has improved margins and cost efficiency, with the potential for a 15-20% increase in profitability by Q3 FY25.

Globus Spirits Peer Analysis

Industry Positioning: Globus Spirits is one of the largest grain-based distilleries in India, focusing on high-margin segments such as ethanol and IMIL while competing with players like BCL Industries and United Spirits in the IMIL and premium alcohol space.
Competitive Advantage: GSL has a significant advantage due to its integrated 360° business model, which allows higher utilization rates, greater control over product quality, and reduced operating cycles compared to IMFL-focused competitors.
The IMIL segment has a market share of ~30% in India’s alco-beverage industry, characterized by a faster cash cycle and lower entry barriers, benefiting GSL.

Strong Revenue Mix

Globus Spirits has a well-diversified revenue base. In FY24, about 34% of its revenue came from the consumer segment.
The manufacturing segment contributes 66%. This balance gives it a stable foundation, allowing it to leverage growth in both consumer demand and government-backed ethanol blending mandates.
The Premium IMFL segment, although a smaller contributor, is growing fast. This segment recorded a 292% YoY growth in Q1FY25. The company plans to expand its premium brands like Mountain Oak Whisky and Snoski Vodka to more states, which indicates a clear strategy to capture high-margin markets.

Growth in Value Segments

Globus Spirits has maintained a stronghold in the IMIL segment, targeting bottom-of-the-pyramid consumers with affordable pricing and better-quality products. Its “Regular & Others” segment continues to generate steady cash flow, with plans to scale further in large markets like Uttar Pradesh, where demand is high.
The company’s recent launch of “GR8 Times” Whisky and Vodka in UP reflects its aggressive expansion into high-volume markets, focusing on a fast-moving cash cycle and low asset base.

Ethanol Blending Opportunity

The ethanol blending mandate offers a stable growth driver. As India pushes for a 20% ethanol blend, Globus Spirits stands to gain significantly.
With ongoing capacity additions and strong government support, the manufacturing segment looks set for sustained growth.

Potential Risks and Challenges

While the growth outlook is promising, there are a few challenges that investors should be aware of:

Regulatory Risks: The alcoholic beverage industry is highly regulated, with state-specific taxes and excise policies that can change unexpectedly. These regulatory changes could impact the company’s margins and sales in certain regions.
Raw Material Volatility: The company relies heavily on maize for its ENA production. Any disruptions in the maize supply chain or price volatility could impact its margins. However, Globus Spirits’ focus on securing raw material supply and shifting to maize is aimed at mitigating this risk.
Competition from IMFL Brands: While Globus Spirits has a strong presence in the value segment, competition is increasing from both domestic and international players entering India’s premium alcohol market. This could put pressure on the company’s IMFL segment as it tries to establish itself among premium brands.

Outlook: Is Globus Spirits Stock a Good Buy Now?

Overall, Globus Spirits is a good investment opportunity, especially for those looking to tap into both consumer alcohol and ethanol stocks. The company’s strategic focus on premiumization, capacity expansion, and ethanol production aligns well with current market dynamics. The rapid growth in its Prestige & Above segment, coupled with strong demand for ethanol, indicates that the company is well-positioned to deliver substantial growth in the coming years.

However, potential investors should keep an eye on regulatory changes and raw material price volatility. Despite these risks, Globus Spirits appears to be a strong buy for long-term investors who believe in India’s evolving alcoholic beverage industry and the push toward ethanol blending.

In short, if you’re looking for a mix of steady cash flow, growth in premium alcohol, and a solid play on ethanol demand, Globus Spirits could be worth adding to your portfolio.

A Few Facts: Globus Spirits News

Globus Spirits operates primarily in three segments:

Consumer Segment: This includes Indian Made Indian Liquor (IMIL) and Indian Made Foreign Liquor (IMFL).
Regular & Others Segment: Consisting of entry-level IMIL and value IMFL brands.
Manufacturing Segment: Focused on the production of Extra Neutral Alcohol (ENA) and ethanol for blending with petrol.

With this diversified model, the company caters to a wide range of consumers while also tapping into government-led ethanol demand.

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Let me share some facts and figures about the company to help you in deciding the Globus Spirits Share Price Target 2025. The websites who are giving a forecast number without any justification does not make any sense of it.

See the valuation of the company, financial performance, and expansion plan to decide the Globus Spirits Share Price Target 2025. However, my personal believe is it will double from here.

Now to decide Is Globus Spirits Stock a Good Buy Now? let us analyse the below facts one by one.

Financial Performance: Globus Spirits Share Price Analysis

Q1 FY25: The company recorded robust growth across segments:
- Prestige & Above (P&A) revenue reached INR 272 million, a significant YoY growth of 272%.
- The Regular & Others segment generated INR 2,114 million in revenue, with YoY growth of 11%.
- The manufacturing segment reported INR 4,036 million, reflecting an improvement due to better maize crop yield and increased ENA production.
FY24 Overview: Revenue grew by 15%, primarily driven by the manufacturing and consumer segments. The company achieved INR 2,415 crore in net revenues, but EBITDA margins were constrained to 8% due to rising input costs and IMFL investments.
Future Outlook: EBITDA margin is expected to improve to 16.2% in FY25, fueled by price hikes, new launches, and a shift to maize as a raw material, which is less expensive than rice.

Globus Spirits Capacity Expansion in Manufacturing

The company is on track to nearly double its production capacity by FY25.
Total current installed capacity: 301 million liters as of Q1 FY25. This capacity is spread across six manufacturing facilities:
- Rajasthan: 54.4 million liters
- West Bengal: 102 million liters
- Haryana: 47.6 million liters
- Bihar: 28.9 million liters
- Jharkhand: 68 million liters
- Uttar Pradesh: Bottling only (commenced in April 2024)
The company achieved capacity utilization of 90% in FY24, producing ~208 million liters of bulk alcohol.
In Q4 FY24, Globus Spirits enhanced its capacity by 60 KLPD at both its West Bengal and Jharkhand facilities. This additional capacity will be operational from Q1 FY25.
In Q1 FY25, the company commenced commercial production at its new bottling plant in Uttar Pradesh with a capacity of 25,000 cases per line per month.
Construction of a new distillery in Uttar Pradesh is set to begin after the monsoon season. This facility will have a capacity of 80 KLPD and the flexibility to use molasses or grain as raw material. The expected CAPEX for this project is ₹120 crores, and it is expected to be operational in 14-16 months.
The company is undertaking a greenfield expansion of 200 KLPD at a new facility in Odisha. Construction is expected to start in Q4 FY24. The total CAPEX for this project is ₹160 crore, with ₹120 crore funded through debt and the remainder through internal accruals.
Globus Spirits is also exploring a second greenfield expansion of 200 KLPD in Uttar Pradesh, although the approval process is still underway.

Analyst reports suggest the company’s ethanol/ENA capacity could double from 765 KLPD to 1,344 KLPD by FY25.
By shifting from rice to maize as the primary raw material, the company is also aiming to reduce costs and ensure a more consistent supply. This move is expected to improve margins in the coming quarters.

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