GM Breweries Q1 Results FY26: EBITDA Falls to ₹309 Million, Margins Narrow to 4.84%

GM Breweries Q1 Results FY26: Slight Dip in Profitability Reflects Cost Pressures

July 15, 2025 | Mumbai – Mumbai-based GM Breweries Ltd., a leading manufacturer of country liquor in India, released its Q1 FY26 financial results, showing a modest decline in profitability despite stable operational performance. The company reported an EBITDA of ₹309 million, compared to ₹314 million in the same quarter last year. EBITDA margin also saw a dip to 4.84%, down from 5.24% year-on-year (YoY).

While revenue numbers are yet to be publicly disclosed, the lower EBITDA indicates cost-related headwinds, particularly in raw materials and packaging, which have impacted operating margins.

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📊 Key Highlights: GM Breweries Q1 FY26 Performance

• EBITDA: ₹309 million vs ₹314 million YoY

• EBITDA Margin: 4.84% vs 5.24% YoY

• Decline in margin: 40 basis points YoY

This performance suggests that the company is facing marginal pressure on operating efficiencies, despite stable topline activity.

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🧃 Segment Overview: Country Liquor Continues to Dominate

GM Breweries primarily operates in the country liquor segment, a volume-driven market catering to lower and middle-income consumers in Maharashtra. Its popular brands, including “Santra”, “Lal Gola”, and “Dilbahar”, continue to maintain strong brand loyalty.

Despite rising competition and input inflation, GM Breweries has managed to preserve its market share. However, input costs—especially for molasses and glass—have pressured margins this quarter.

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💡 Management Commentary

While the company has not yet released a formal investor statement, analysts suggest that:

“The small decline in EBITDA and margin may reflect temporary cost increases rather than structural issues. However, consistent margin erosion could become a concern if raw material costs continue to rise in the coming quarters,” said an independent liquor industry analyst.

The company is also expected to provide commentary on capacity utilization and sales volume in its upcoming investor call.

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📈 Historical Comparison

The YoY comparison clearly shows a 1.6% drop in absolute EBITDA and a 40 basis point compression in margin.

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🏭 Cost Pressures and Margin Outlook

GM Breweries has long enjoyed a stronghold in Maharashtra’s liquor distribution chain, but input inflation continues to pose a challenge. Key cost factors include:

• Molasses prices (a key raw material for alcohol production) have seen volatility.

• Packaging costs have risen due to global glass and logistics constraints.

• Labour and fuel expenses have also increased marginally.

The company’s future margins will depend on its ability to manage input procurement and pass on costs without affecting demand.

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🧾 Balance Sheet & Cash Flow (Expected Update)

GM Breweries is known for its debt-free balance sheet and conservative financial management. Despite short-term earnings volatility, its strong cash reserves and low leverage remain a positive for investors looking for consistent dividend payouts and long-term sustainability.

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📈 Stock Market Reaction

As of midday trading on July 15, GM Breweries stock showed muted movement, with a marginal dip of 0.3% in early trade. This suggests that the market had already priced in moderate earnings or that investors are waiting for more detailed guidance from management.

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🧐 What to Watch Going Forward

• Volume growth: Can GM maintain or grow its volume amid rising prices?

• Input cost inflation: Will costs stabilize or increase further?

• New product launches: Will the company expand its portfolio beyond country liquor?

• Policy/regulatory changes: Any excise or taxation updates in Maharashtra can directly impact revenue.

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🧠 Analyst Opinions

Most analysts consider GM Breweries a stable defensive stock with long-term value due to:

• Debt-free operations

• Strong regional brand presence

• Consistent dividend history

However, margin pressures could keep earnings growth subdued in the short term.

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❓ FAQs on GM Breweries Q1 Results FY26

Q1. What was GM Breweries’ EBITDA in Q1 FY26?
GM Breweries reported ₹309 million in EBITDA, down from ₹314 million YoY.

Q2. What caused the dip in EBITDA margin?
The EBITDA margin fell due to higher input and packaging costs, shrinking from 5.24% to 4.84%.

Q3. Is the company still profitable?
Yes. Although EBITDA declined slightly, the company remains profitable and operationally stable.

Q4. Does GM Breweries have any debt?
No. GM Breweries has consistently maintained a debt-free balance sheet.

Q5. Will margins recover in upcoming quarters?
Margin recovery will depend on raw material cost stability and the company’s pricing power in the market.

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