Synopsis: Som Distilleries shares fell 11% after Q3 profit plunged 74% YoY to Rs 5.5 crore amid declining revenue and elevated costs. Revenue dropped 17% YoY, while high material expenses and excise duties compressed margins. Despite trading at a PE of 20.7, earnings weakness weighed heavily on investor sentiment.
The shares of this company, which is one of the leading alcoholic beverage manufacturers in India engaged in the manufacturing and sale of beer and Indian-made foreign liquor, had its shares tumble after the company reported muted results with a fall in both revenue and profit.
With the market cap of Rs 1,712 crore, the shares of Som Distilleries & Breweries Ltd have fallen by about 11% and reached a low at Rs 85.35, compared to their previous day’s closing price of Rs 96.03. The shares are trading at a PE of 20.7, whereas its industry PE is at 35.4. Ace investor Dolly Khanna owns about a 2.07% stake in the company.
Q3 Result highlights
The revenue from operation for the company stood at Rs 250.55 crore when compared to Rs 301.12 crore in Q3 FY25, falling by about 17 per cent on a YoY basis and on a QoQ basis falling by 7 per cent from Rs 269.59 crore in Q2 FY26 (this is excluding the state Excise duty)
The PAT fell by about 74 per cent on a YoY basis when you compare the Q3 FY26 profit at Rs 5.5 crore to Rs 21.52 crore in Q3 FY25 and on a QoQ basis has fallen 72 per cent from Rs 19.5 crore in Q2 FY26.
Why the drop in profits?
Profit has reduced considerably during the quarter due primarily to lower revenues and high costs. Revenue for the quarter ended was Rs 482.55 crore compared to Rs 561.96 crore for the same quarter last year. The revenue has reduced, but expenses during the period were high at Rs 478.82 crore. Because of high expenses, even lower revenue does not enable a significant operating margin, and profit before tax has reduced considerably to Rs 7.41 crore from Rs 29.16 crore for the same quarter last year.
Further, the pressure was mainly due to the higher costs of material expenses of Rs 201.71 crore and state excise duties of Rs 232.00 crore, both of which constituted a major part of the costs of the company. As the expenses did not reduce commensurately with the revenue decrease, the margins were squeezed tight. This led the profit after tax for the company to dip to Rs 5.48 crore, as against Rs 21.51 crore in the same quarter the previous year.
SOM Group began as a white-label bottling operation in the mid-1980s and has transformed into a diversified alcoholic beverages enterprise with operations at several locations in India. The company has an extensive range of alcoholic beverages, which include beer, spirits, RTDs, Rectified Spirit (RS), and Ethyl Neutral Alcohol (ENA). The company is popular for its premium beer brand ‘Hunter’, wheat beer ‘Woodpecker’, and spirits, which range from whisky, vodka, brandy, rum, and others.
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