Som Distilleries & Breweries‘ shares took a hit on Tuesday following reports of an income tax search operation at the company’s premises.
What Happened: The income tax department has initiated a search operation at various locations of Som Group of Companies across the country, including Bhopal, Jabalpur and Indore, CNBC TV-18 reported.
The alcoholic beverage maker had recently cancelled its ₹350 crore qualified institutional placement offer due to lacklustre demand. The funds were intended for the expansion of their beer facility in Karnataka by 60 lakh cases annually. In April, the company also announced a ₹300 crore investment in a new unit in Maharashtra.
Recent Performance: For the quarter ended September, Som Distilleries witnessed a remarkable 72% increase in consolidated total income, reaching ₹464 crore compared to ₹269 crore a year ago. However, on a sequential basis, the company’s total income saw a 38% decline from ₹760 crore in the first quarter.
During the same period, the company’s consolidated net profit dropped by 56% quarter-on-quarter to ₹14 crore in the second quarter, down from ₹33 crore. Nonetheless, there was an 80% year-on-year increase in net profit from ₹8 crore in the September quarter.
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HDFC Securities analysts had issued a bullish call, upgrading the estimates for fiscal 2024 and 2025. Som Distilleries & Breweries primarily operates in core markets including Madhya Pradesh, Karnataka and Odisha.
Price Action: Som Distilleries’ share price was down 6.83% at ₹305.60 around noon on Tuesday.
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