The share price of the spirits company Som Distilleries ended the day on Wednesday, April 12th, 2023, slightly higher at 158.8 against its previous closing of 155. To put things in perspective, the company’s stock is currently trading close to its 52-week high but well below its all-time high level.
Som Distilleries shares have increased 30% so far in 2023 while increasing 120% in the previous year.
Why are we showcasing this spirits stock now, out of the blue?
According to Som Distilleries’ most recent shareholding data, seasoned investor Dolly Khanna has acquired a sizeable position in the business over the past quarter.
As we all know, Dolly Khanna is renowned for selecting discounted mid-caps and small-caps that are little-known. Since 1996, she has started trading stocks.
Rajiv Khanna, the manager of her portfolio, tends to favour more traditional equities in the industrial, textile, chemicals, and sugar industries. Investors have always been drawn in by this amazing stock-picking approach.
Let’s take a step further and explore the reasons for Dolly Khanna’s decision to invest in Som Distilleries during the March 2023 quarter.
Dolly Khanna’s investment in Som Distilleries: Why?
According to Som Distilleries’ most recent shareholding data, Dolly Khanna owns more than 1% of the business as of March 2023. Khanna currently owns 1.3% of the firm for 148 million (m).
Her name hadn’t been on the stockholders list up until this point. A firm is required by law to provide the names of all shareholders who possess more than 1% of its shares.
Dolly Khanna openly owns up to 15 stocks, according to the most recent corporate shareholdings declared, with an estimated net worth of more than 2.4 billion (bn).
Check out Dolly Khanna’s top five stocks and portfolio here.
Returning to the reason she invested in Som Distilleries…
Even if we don’t know the exact reason Khanna purchased shares of the brewery and alcohol company, we can make some educated guesses.
The general presumptions if corporate insiders purchase shares on the open market are as follows:
It demonstrates faith in the company’s prospects for the future.
The market will receive a signal that the company is undervalued.
That might result in more stock demand and investor confidence.
According to Som Distilleries’ most recent shareholding pattern, insiders or promoters have raised their stake for five straight quarters.
Their shareholding climbed from 24.5% in December 2021 to 33.1% for the quarter that ended on March 31, 2023.
Dolly Khanna’s purchase of a stake may have been motivated in part by the increasing promoter ownership of the business. Constantly!
The company’s ambitious expansion goal and its rights issue might be some additional factors.
A proposal to build a new canning facility and upgrade its current utilities in Bhopal with an investment of $1 billion was authorised by Som Distilleries in December 2022. (bn).
The Hasan Plant of Woodpecker Distilleries and Breweries will also have its brewing facilities expanded as part of the company’s expansion plan.
The expansion plan’s funding was also approved by the board in a rights issue. A total of 490 million fully paid-up equity shares worth 5 each will be issued by the corporation.
positive outlook
Som Distilleries recorded growth in all segments for the nine months ended in December 2022 as demand increased. In its important markets, including Karnataka, Odisha, and Madhya Pradesh, the company experienced rapid volume expansion.
Due to a 10% drop in the maximum retail prices and excise duty, Madhya Pradesh experienced notable growth.
The corporation also observed an increase in its market share this year after a sharp decline during the early pandemic days.
In order to increase its market share going forward, the company intends to take advantage of the extra capacity expansion, particularly in the canning industry.
The company stated in its conference call that it expects to repeat the feat in Q4 assuming healthy volume after producing a strong set of figures in Q3. It plans to increase by 20–25% in FY24.
How the stock price of Som Distilleries has changed over time
Over the past year, shares of Som Distilleries have increased by nearly 120%.
52-week high of 162 dollars was reached by Som Distilleries on 3 April 2023, and 52-week low of 54 dollars was reached on 12 May 2022.
Concerning Som Distilleries
Spirits, beer, and alcoholic beverages are produced and sold by Som Distilleries and Breweries in India and abroad. The business sells beer, brandy, rum, vodka, whisky, and more.
Under the brand names Cosmo Cranberry, Naughty Orange, Passion Fruit, and Tangy Lemon, it also sells ready-to-drink items.
This content is provided solely for informational reasons. It should not be seen as a stock recommendation because it is not one.
