Globus Spirits Drops 16%, Extending Decline After Weak Q2 Results

Globus Spirits faced a challenging July-September quarter (Q2FY25), leading to a sharp drop in its stock price. The company reported an 88% year-on-year decline in standalone net profit, falling to ₹1.5 crore from ₹13 crore in the same quarter last year. Despite this, the revenue from operations grew by 18%, reaching ₹875 crore compared to ₹739 crore in Q2FY24. The mixed financial performance has caused concern among investors, as profitability issues overshadowed the revenue growth.

Key Financial Highlights: Revenue Up, Profit Down

The liquor company, known for its range of whisky, rum, vodka, and gin, struggled with profit margins despite a positive revenue increase. Standalone revenue rose 18% year-on-year, driven by domestic and export sales. However, the surge in revenue was offset by rising costs, resulting in a sharp drop in net profit. The company faced operational challenges, including higher packing costs and disruptions in Delhi dispatches, which impacted its performance during the quarter.

At the operating level, the company’s EBITDA fell to ₹30 crore, down from ₹38 crore in Q2FY24, marking a decline of 21%. The EBITDA margin contracted significantly to 3.4% in Q2FY25, compared to 5.1% in the same period last year. This decline reflects increased cost pressures and challenges in managing expenses effectively.

Market Reaction

Following the weak Q2FY25 results, shares of Globus Spirits tumbled for the second consecutive day, falling over 16% to ₹890 per share. This decline adds to the over 20% drop in the past month, underperforming the broader Nifty 50 index, which fell by only 5% in the same period. The stock had previously reached a 52-week high of ₹1,373 on September 17, 2024, indicating a steep decline from its peak.

Globus Spirits is facing a tough period marked by declining profit margins and increased cost pressures, which have weighed heavily on its stock performance. The company must address these issues to restore investor confidence and stabilise its financial outlook.

Globus Spirits Share Price Performance

Globus Spirits’ share price performance today continued its downward trend. By 3:05 PM IST on November 13, the stock price was ₹889.45, down by 5.08%. It opened at ₹927.65, reached a high of ₹954.55, and hit a low of ₹871.00 during the day’s trading session. Investors remain cautious amid concerns over the company’s profitability and operational challenges.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.