GM Breweries Q4 Net Profit Drops 30% to Rs 60 Crore, Announces Rs 7.5 Dividend
GM Breweries
GM Breweries Q4 FY25 Results: A Tough Quarter as Net Profit Plummets 30%, but Rs 7.5 Dividend Proposed
Mumbai, April 15, 2025 – GM Breweries, one of India’s well-established alcoholic beverage manufacturers, is facing significant headwinds, as revealed by its financial results for the fourth quarter (Q4) of FY25.
The Mumbai-headquartered company, known for its range of country liquor (CL) and Indian-made foreign liquor (IMFL), reported a sharp 30% decline in net profit for the period, despite a rise in revenues.
The company’s earnings were impacted by rising operational costs, which outpaced the increase in sales, leading to a considerable dent in profitability.
A Decline in Net Profit Amid Modest Revenue Growth
GM Breweries reported a net profit of Rs 60.46 crore for Q4 FY25, down from Rs 87 crore in Q4 FY24. This marks a stark 30% drop in profitability, indicating that the company has faced significant challenges during the quarter.
The decline in net profit is primarily attributed to a rise in expenses, which have eroded the benefits of higher revenues.
On the positive side, the company’s revenue from operations grew by 6% year-on-year (YoY) to Rs 663 crore in Q4 FY25.
This revenue growth demonstrates that GM Breweries has continued to see strong sales despite a challenging economic environment.
The increase in sales can be attributed to both price hikes and continued demand for the company’s alcoholic beverages, which are popular in India’s thriving liquor market.
However, the uptick in revenue was not enough to counterbalance the pressures on the cost side of the business, which has affected overall profitability.
Rising Costs Outpace Revenue Growth
While revenue growth is typically a positive indicator, GM Breweries’ total expenses grew by nearly 6% YoY to Rs 635 crore in Q4 FY25.
The increase in costs was driven by a combination of factors, including higher raw material prices, distribution costs, and administrative expenses.
These rising operational expenses have weighed heavily on the company’s profitability, resulting in a lower margin for the quarter.
Despite the revenue growth, the fact that expenses have risen at nearly the same pace indicates that the company is struggling to maintain cost efficiency, which is crucial in a highly competitive and cost-sensitive sector like alcoholic beverages.
The failure to leverage higher sales into improved profitability underscores the challenges GM Breweries faces in managing its operational costs.
Earnings Per Share (EPS) Takes a Hit
The sharp decline in net profit has naturally led to a significant drop in GM Breweries’ Earnings Per Share (EPS).
The company’s EPS for Q4 FY25 nearly halved to Rs 26.47, compared to Rs 51.29 in the same quarter last year. EPS is a key indicator of a company’s profitability and is often closely watched by investors.
A drop in EPS of this magnitude reflects the severity of the challenges the company is encountering in terms of cost management and overall financial performance.
The halving of EPS also puts into perspective the tough operating conditions that GM Breweries is grappling with.
Despite higher sales, the company has struggled to maintain its profit margins, indicating that the rise in revenue has not been sufficient to offset the rising costs associated with its operations.
The decline in EPS could also potentially impact investor sentiment, as a lower EPS may signal weaker future earnings prospects.
Dividend Proposal Amid Financial Struggles
In a move to reassure shareholders and retain investor confidence, GM Breweries has proposed a dividend of Rs 7.5 per equity share for Q4 FY25.
The dividend, which is subject to approval at the upcoming Annual General Meeting (AGM), will be seen as an effort to maintain a sense of stability and shareholder value, even as the company’s overall profitability has declined.
The dividend proposal is noteworthy, especially given the reduced profits. Dividends are often seen as a key indicator of a company’s financial health and its commitment to returning value to shareholders.
Despite the weaker financial results, GM Breweries is making an effort to demonstrate its shareholder-friendly approach, which could help mitigate some of the concerns investors might have about the company’s future growth trajectory.
Stock Performance: A Mixed Picture
Despite the decline in net profit, GM Breweries’ stock saw a positive uptick of over 2% in the afternoon session, trading at Rs 655 per share.
This uptick occurred against the backdrop of a general bullish sentiment in the broader market, with both the Sensex and Nifty showing strong gains on the day.
However, this short-term rise should be viewed in the context of a much broader downtrend in the company’s stock performance over the past several months.
In 2025, GM Breweries’ stock has fallen nearly 21%, a sharp decline that reflects broader investor concerns.
The stock had earlier hit a fresh 52-week low of Rs 579.95 per share in March, signaling a period of uncertainty for the company.
Even though the stock has seen some recovery in recent days, it remains well below its 52-week high of Rs 1,049 per share, which was recorded in September 2024.
This sharp decline in the stock price underscores ongoing concerns about the company’s ability to navigate its financial challenges.
Investor Sentiment and Market Outlook
The performance of GM Breweries’ stock in 2025 paints a picture of investor caution. The company’s weaker-than-expected financial results, coupled with declining profitability and rising costs, have raised concerns about its ability to maintain strong growth in the short term.
However, the modest rise in stock price following the dividend announcement indicates that there is still some optimism among investors, particularly in the context of the overall market rally.
In the broader market context, the positive market sentiment, driven by a strong performance in both the Sensex and Nifty, has likely provided some cushion to GM Breweries’ stock.
However, the company’s poor performance in recent months suggests that the stock will continue to face volatility until there is a clear indication of a recovery in its financials.
Long-Term Outlook and Challenges Ahead
The key challenge for GM Breweries going forward will be to manage its rising costs while sustaining revenue growth. Given the pressures on profitability, the company will need to find ways to improve operational efficiency and reduce expenses without sacrificing sales growth.
It will also be critical for the company to focus on innovation and brand differentiation, especially in a highly competitive market where consumer preferences are constantly evolving.
The company will also need to closely monitor regulatory changes in the alcoholic beverages sector, as these could impact both production costs and sales potential.
Additionally, external economic factors such as inflation, taxation, and shifts in consumer spending habits could have a profound impact on GM Breweries’ financial performance in the coming quarters.
Final Remarks
GM Breweries’ Q4 FY25 results reflect the difficult operating environment the company is currently facing. While revenue growth is a positive sign, the sharp decline in net profit and EPS highlights the challenges posed by rising costs.
The proposed dividend is a strategic move to retain shareholder trust, but the stock’s performance in 2025 suggests that investors remain cautious about the company’s future prospects.
Moving forward, GM Breweries will need to address its cost management issues and continue driving revenue growth to stabilize its financial position and restore investor confidence.
