Mohan Meakin Limited (Old Monk) Unlisted Stocks

About the Company


  • Mohan Meakin Limited (MML) is a large group of companies that started with Asia's first brewery. The Company is engaged in the business of manufacturing alcoholic and non-alcoholic beverages.
  • MML was incorporated in the year 1855 (but established much earlier) by Edward Dyer at Kasauli in the Himalayan Mountains in India under the name Dyer Breweries.
  • The Company has various factories located in Solan, Kasauli, Mohan Gram, Mohan Nagar and Lucknow.
  • MML owns brands such as Old Monk in the rum segment and Meakin 10000, Asia 72, and Golden Eagle in the beer segment.
  • MML has two manufacturing facilities to manufacture beer, spirit, and food products (largely grain flakes) at Mohan Nagar in UP and Kasauli/Solan in Himachal Pradesh (HP). In addition, it has bottling plants at Mohangram in Punjab and Solan in HP.

History & Evolution


  • The Company’s remarkable performance is not limited to liquor; its business interests are manifold. Turning foresight into reality is the Fruit juices, Breakfast Foods, Mineral Water and Glass Factory – a strategic diversification to further reinforce its business interests.
  • Edward Dyer established a Brewery at Kasauli 1855. He realized for the first time that there were a few spots on earth where a really good drink was more welcome.
  • Consequently, he scaled the whole width of this subcontinent and established breweries and distilleries at Shimla, Solan, Lucknow and Mandalay (Burma).
  • In 1935 the name of the Company with Indian assets and liabilities was changed to Dyer Meakin Breweries Ltd., from Dyer Meakin & Co. Ltd., and the assets and liabilities of Burma Brewery were separated
  • Thereafter the Company’s name was changed from Dyer Meakin Breweries Ltd., to Mohan Meakin Breweries Ltd., in 1966 and in 1980 the name was further changed to Mohan Meakin Ltd., and as such the Company is now known as Mohan Meakin Limited

Financial Highlights- Comparison with Peers

 

Mohan Meakin Financial Highlights

 

  • Mohan Meakin has maintained a greater Earning per share for two consecutive years as compared to its listed peers.
  • The Company has also been able to generate and grow its book value better than peers.
  • With an average PB ratio of ~7-8x, Mohan Meakin is selling a favorable price as compared to its relatively highly-priced listed peers.
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    Notes and disclaimer: EPS and BVPS basis – Mar 31, 2021.Share prices as on Nov 24, 2021. The above analysis is based on market available data.

     

     

    Mohan Meakin Shareholding Pattern

     

    Equity Shares outstanding – 85,08,479 shares of INR 5 each

     

    Industry Opportunities


    • In 2020, the global market size of alcoholic beverages amounted to over 1.49 trillion U.S. dollars. However, the Statista Consumer Market Outlook estimates that by 2025 the global market size of alcoholic beverages will increase to over 2.2 trillion U.S. dollars
    • India is one of the fastest-growing alcoholic beverages markets globally with an estimated market size of 52.5 billion dollars (about Rs 3.9 lakh crore), the Indian Council for Research on International Economic Relations (ICRIER) has said.
    • ICRIER said over 70 percent of the growth in alcoholic beverages consumption in India in the next decade will be driven by the lower middle and upper-middle-income groups, and there is a growing trend towards product premiumization. .
    • The market is expected to grow at a CAGR of 6.8 percent till 2023, ICRIER added.
    • The Indian packaged juices market is projected to grow at a CAGR of 15 percent over the next three years. – Business Standard.
    • IMARC Group expects the global Vinegar market to reach a value of US$ 2.55 Billion by 2026
    • India Breakfast Cereals Market is expected to grow at CAGR of 6.50% - Mordor Intelligence

    Investment Rationale


    • Mohan Meakin Limited, which enjoys a 166 years of legacy, has a strong brand recognition and established position with the brand - ‘Old Monk’ in the domestic Indian-Made Foreign Liquor (IMFL) market. The company has a long operational track record and an established pan-India operations along with an international presence.
    • MML has shown growth in various financial parameters YoY basis, including but not limited to, 7.5% growth in Operational revenue, 52% growth in Profit after Tax, and a stellar 53% growth in Earning per share
    • The Company is virtually Debt-free and has reduced over 89% of its debt burden in FY21.
    • The operating cash flow is positive and increasing. This is a positive indication towards the Company’s ability to generate cash from its business activities which is a crucial aspect of any cash-demanding manufacturing entity.
    • MML has better EPS, Book value per share, and price multiples as compared to listed peers as of FY21.
    • India is one of the fastest-growing alcoholic beverages markets globally with an estimated market size of 52.5 billion dollars
    • LIC holds 8.38% stake of the Company.
    • MML owns substantial land parcel which holds a hidden value for the firm