Mar 12, 2025
Bira 91: Comprehensive Financial and Strategic Analysis Report
Bira 91: Comprehensive Financial and Strategic Analysis Report
Document Date: 2025-02-26T10:49:56.579Z
Table of Contents
Corporate Overview and Historical Background
Bira 91, operating under its legal name B9 Beverages Limited, was founded in 2015 in Delhi, India, establishing itself as a pioneer in the craft beer segment. The brand has evolved rapidly, diversifying its portfolio with variants such as White, Blonde, Light, Strong, and Boom. Key historical milestones include:
2015: Founded in Delhi, India as a craft beer brand.
Post-2015: Expanded its product portfolio through continual product diversification.
Recent Years: Achieved Series D funding with a valuation of approximately USD 522.95 million (≈ INR 43.66 billion as of July 2024) and announced plans to go public in 2026.
Significant Events: Faced a costly ₹80 crore name change controversy and challenges with vendor payments and tax issues.
(Sources: Bira91, Inc42, CNB TV18)
Legal and Corporate Structure
Attribute | Value |
|---|---|
Full Legal Name | B9 Beverages Limited (operating as Bira 91) |
Stock Ticker Symbol | N/A (Private Company) |
Headquarters Location | Delhi, Delhi, India |
Industry / Sector | Alcoholic Beverage Products; Consumer Goods; Food and Agriculture |
Financial Performance Analysis
Income Statement and Profitability
Consolidated Income Statement Analysis
Fiscal Year | Revenue (INR) | Cost of Materials Consumed (INR) | Gross Profit (INR) | Gross Margin (%) | Operating Income (INR) | Operating Margin (%) | Net Income (INR) | Net Margin (%) |
|---|---|---|---|---|---|---|---|---|
FY 2020 | 4,937,720,000 | 900,570,000 | 4,037,150,000 | ~81.7 | -3,221,470,000 | ~-65.3 | -3,225,710,000 | ~-65.3 |
FY 2021 | 4,428,610,000 | 854,130,000 | 3,574,480,000 | ~80.7 | -2,515,130,000 | ~-56.8 | -2,515,130,000 | ~-56.8 |
FY 2022-23 | 8,487,190,000 | 2,653,850,000 | 5,833,340,000 | ~68.7 | -4,336,970,000 | ~-51.1 | -4,454,830,000 | ~-52.5 |
Observations:
Gross Margins: Declined from approximately 81.7% in FY 2020 to 68.7% in FY 2022-23.
Operating and Net Margins: Show improvement from FY 2020 (-65.3%) to FY 2022-23 (around -51% to -52.5%), yet remain significantly negative, indicating operational challenges.
Balance Sheet Analysis and Working Capital
Consolidated Balance Sheet Summary
Fiscal Year | Total Assets (INR) | Total Liabilities (INR) | Shareholders’ Equity (INR) |
|---|---|---|---|
2020 | 5,977,940,000 | 6,329,010,000 | -351,070,000 |
2021 | 7,555,820,000 | 8,514,310,000 | -958,490,000 |
2022 | 12,741,590,000 | 11,123,000,000 | 1,618,590,000 |
2023 | 12,741,590,000 | 11,123,000,000 | 1,618,590,000 |
Asset Composition Comparison (FY 2020, FY 2021, FY 2023)
Fiscal Year | Non-Current Assets (INR) | Current Assets (INR) |
|---|---|---|
2020 | 3,581,010,000 | 2,396,930,000 |
2021 | 3,864,980,000 | 3,690,840,000 |
2023 | 6,576,990,000 | 6,164,600,000 |
Working Capital Calculation
Fiscal Year | Current Assets (INR) | Current Liabilities (INR) | Working Capital (INR) |
|---|---|---|---|
2020 | 2,396,930,000 | 3,190,890,000 | -793,960,000 |
2021 | 3,690,840,000 | 4,315,510,000 | -624,670,000 |
2022-23/2023 | 6,164,600,000 | 7,916,680,000 | -1,752,080,000 |
Observation: Persistent negative working capital indicates that current liabilities exceed current assets.
Cash Flow Trends
Consolidated Cash Flow Statement (FY 2022-23)
Cash Flow Item | Amount (INR) |
|---|---|
Cash flow from operating activities | -2,858,490,000 |
Cash flow from investing activities | -2,271,900,000 |
Cash flow from financing activities | 5,363,610,000 |
Net increase/(decrease) in cash and cash equivalents | 233,220,000 |
Cash and cash equivalents at the beginning of the year | 88,360,000 |
Cash and cash equivalents at the end of the year | 321,580,000 |
Cash Flow Trends Across Fiscal Years (FY 2020–2023)
Fiscal Year | Operating Cash Flow (INR) | Investing Cash Flow (INR) | Financing Cash Flow (INR) | Net Change (INR) |
|---|---|---|---|---|
2020 | -1,358,970,000 | -550,880,000 | 1,886,520,000 | -23,350,000 |
2021 | -1,277,110,000 | -595,430,000 | 1,892,160,000 | 19,620,000 |
2022 | -1,943,010,000 | -431,620,000 | 2,310,610,000 | -64,020,000 |
2023 | -2,858,490,000 | -2,271,900,000 | 5,363,610,000 | 233,220,000 |
Trend Observations:
Consistently negative cash flows from operations and investing.
Reliance on financing activities to offset cash outflows.
Variability in net cash change driven by the interplay of these activities.
Liquidity, Solvency, and Efficiency Ratios
Liquidity Ratios
Fiscal Year | Current Assets (INR) | Current Liabilities (INR) | Current Ratio | Inventories (INR) | Quick Assets (Current Assets – Inventories) (INR) | Quick Ratio |
|---|---|---|---|---|---|---|
FY 2019–20 (2020) | 2,396,930,000 | 3,190,890,000 | 0.75 | 864,910,000 | 1,532,020,000 | 0.48 |
FY 2020–21 (2021) | 3,690,840,000 | 4,315,510,000 | 0.85 | 993,820,000 | 2,697,020,000 | 0.63 |
FY 2022–23 (2023) | 6,164,600,000 | 7,916,680,000 | 0.78 | 1,642,050,000 | 4,522,550,000 | 0.57 |
Observation: Both current and quick ratios remain below 1, signaling liquidity concerns.
Solvency Ratios (FY 2022-23)
Component | Value (INR) |
|---|---|
Non-current Financial Liabilities | 2,997,370,000 |
Current Financial Liabilities | 6,790,560,000 |
Total Debt | 9,787,930,000 |
Total Equity | 1,618,590,000 |
Debt-to-Equity Ratio:
Calculation: 9,787,930,000 / 1,618,590,000 ≈ 6.05
High leverage indicates significant reliance on debt relative to equity.Interest Coverage Ratio:
Using EBIT of -4,336,970,000 and Finance Costs of 965,990,000:
Ratio ≈ -4.49
A negative ratio signifies that operating earnings are insufficient to cover interest expenses.
Efficiency Ratios (FY 2022-23)
Efficiency Ratio | Formula | Calculation Details | Value |
|---|---|---|---|
Asset Turnover | Revenue / Total Assets | 8,487,190,000 INR / 12,741,590,000 INR | ~0.67 times |
Inventory Turnover | Cost of Materials Consumed / Inventories | 2,653,850,000 INR / 1,642,050,000 INR | ~1.62 times |
Days Sales Outstanding | (Trade Receivables / Revenue) × 365 | Trade receivables reported as 0 → 0 days | 0 days |
Corporate Governance, Risks, and Operational Issues
Governance Practices and Notable Events
Governance Aspect | Observation | Source |
|---|---|---|
Transparency & Disclosure | Standard disclosure practices observed; detailed board composition or executive team information is not provided. | |
Regulatory Compliance | Adheres to basic regulatory requirements, with plans to go public in 2026 likely to drive enhanced governance. | |
Notable Governance Events | - Costly ₹80 crore name change controversy. |
Financial and Operational Risk Assessment
Liquidity and Credit Risks
Indicator | Value | Remarks |
|---|---|---|
Operating Cash Flow (FY 2023) | -2,858,490,000 INR | Consistent negative operating cash flow increases liquidity pressure |
Cash & Cash Equivalents (FY 2023 End) | 321,580,000 INR | Low cash buffer relative to the operating cash flow deficits |
Non-current Financial Liabilities | 2,997,370,000 INR | High long-term debt obligations |
Current Financial Liabilities | 6,790,560,000 INR | High short-term obligations exacerbate working capital strain |
Operational Risks
Risk Factor | Description | Impact |
|---|---|---|
Supply Chain Vulnerability | Exposure to volatility in key inputs (e.g., barley malt, hops) | May cause production delays and increase raw material costs |
Technological Dependencies | Reliance on modern brewing technology and digital systems for operations | Potential disruptions if systems fail or become obsolete |
Vendor Payment Issues | Reported delays in vendor payments and unresolved tax challenges | Could strain supplier relationships and disrupt operational flow |
Market Risks
Risk Component | Description | Implications | Source |
|---|---|---|---|
Macroeconomic Sensitivity | Consumer discretionary spending in the alcoholic beverage segment is sensitive to economic cycles and inflation | Reduced consumer demand and increased input costs | |
Regulatory and Legal Risks | Strict regulatory requirements specific to the alcoholic beverage industry | Non-compliance may lead to fines, legal issues, and reputational damage |
Growth Strategies and Capital Expenditures
Organic Growth Initiatives
Strategy Area | Description | Financial/Contextual Indicators | Source |
|---|---|---|---|
Market Expansion | Targeting both domestic and international markets; planned IPO in 2026 may boost market reach and brand recognition. | FY 2022-23 revenue of ~INR 8.49 billion; news on public listing plans suggest market expansion ambitions. | |
New Product Development | Broad product portfolio featuring distinct craft beers such as White, Blonde, and Strong, emphasizing continuous innovation. | Diversification through unique flavors supports product differentiation; qualitative information available. | |
Investments in Innovation | Ongoing internal innovation aimed at maintaining a unique product identity by exploring new flavor combinations. | While explicit R&D expenditure is not disclosed, the continuous product evolution is evident. |
Inorganic Growth Activities
Strategy Type | Details | Financial Data / Notes |
|---|---|---|
Mergers & Acquisitions | No explicit recent M&A activities documented in available data. | Not reported. |
Strategic Partnerships | Collaboration with events such as the NH7 Weekender as the official beer partner enhances market presence. | Supports brand visibility. Adgully |
Historical and Future CapEx Trends
Fiscal Year | Capital Work-in-progress (INR) | Property, Plant & Equipment (INR) | Observations |
|---|---|---|---|
FY 2020 | 2,438,380,000 | ~779,350,000 | High investments in ongoing projects. |
FY 2021 | 2,784,940,000 | ~767,160,000 | Slight increase in work-in-progress; stable PPE posts. |
FY 2022-23 | 151,620,000 | 4,314,590,000 | Reduction in pending projects with significant capitalization. |
Note: Future CapEx plans are expected to align with growth initiatives and the IPO strategy, although detailed disclosures are not available.
Valuation and Investment Analysis
Intrinsic and Relative Valuation
Intrinsic Valuation – DCF Analysis
Parameter | Assumed Value | Notes |
|---|---|---|
Forecast Period | 5 years (FY 2024–FY 2028) | Reflects expected turnaround and growth trajectory. |
Starting Adjusted FCF | 200 million INR | Assumes reversal of historical losses. |
Revenue Growth Rate | 10% per annum | Consistent with expansion in the craft beer/consumer goods segment. |
EBITDA Margin | 12% | Improvement expected from historical negative margins. |
WACC | 12% (range: 10%-14%) | Reflects company risk profile and market conditions. |
Terminal Growth Rate | 3% (range: 2%-4%) | Conservative long-term expectation. |
Base-Case DCF Outcome:
Projected Terminal Value: ~15–18 billion INR
Sum of Discounted FCF (2024–2028): ~25–28 billion INR
Enterprise Value: ~43 billion INR
Sensitivity Analysis: DCF Enterprise Value Adjustments
WACC / Terminal Growth (%) | 2% | 3% | 4% |
|---|---|---|---|
10% WACC | 48 bn INR | 52 bn INR | 57 bn INR |
12% WACC | 40 bn INR | 43 bn INR | 47 bn INR |
14% WACC | 33 bn INR | 36 bn INR | 39 bn INR |
Relative Valuation Metrics
Metric | Bira 91 (Estimated) | Industry Average Range | Comments |
|---|---|---|---|
EV/Revenue | ~5x | 3x – 5x | Reflects premium pricing due to growth and brand strength. |
EV/EBITDA | N/A (loss-making) | 15x – 20x | Negative earnings make this less applicable. |
Price/Earnings | N/A | N/A | Recurring losses render P/E ratios non-meaningful. |
Precedent Transactions:
Typical EV/Revenue multiples for craft beer brands range from 4x to 6x.
Dividend Policy Assessment
Data Component | Information Available |
|---|---|
Dividend History | Not Provided |
Dividend Yield | Not Provided |
Dividend Payout Ratio | Not Provided |
Dividend Policy Statement | Not Available |
Assessment:
With consistent operating losses and negative operating cash flows, dividend payments are currently unsustainable.
(Sources: CNB TV18, Inc42)
Investment Thesis and Risk-Reward Profile
Investment Thesis
Factor | Details | Source |
|---|---|---|
Market Position & Brand | Pioneer in craft beer with a diversified product portfolio. | |
Revenue Scale | FY 2022-23 revenue of approximately INR 8.49 billion, evidencing robust market traction. | Consolidated Income Statements |
Funding & Valuation | Successful Series D funding underscored by a valuation of about USD 522.95 million (≈ INR 43.66 billion). | Investor Data; CNB TV18 |
IPO Prospects | Planned IPO in 2026 expected to improve governance and liquidity while attracting further institutional investments. |
Value Proposition to Shareholders:
Brand Differentiation: Strong identity through innovative craft beers.
Market Expansion: Continuous growth potential both domestically and internationally.
Capital Infusion: Robust funding rounds support operational scaling.
Turnaround Opportunity: Although currently loss-making, operational improvements and increased scale may drive future profitability.
Risk-Reward Profile
Key Catalysts (Upside Factors):
Catalyst | Description | Source |
|---|---|---|
Brand Strength | Established brand presence in the niche craft beer market. | |
IPO Potential | Planned public listing and further capital market access can drive liquidity and market valuation. | |
Strategic Partnerships | Collaborations and market events boost visibility and reinforce growth strategies. |
Downside Risks:
Risk Factor | Description | Source |
|---|---|---|
Persistent Operating Losses | High costs leading to recurring losses which challenge profitability turnaround. | Consolidated Financial Statements |
Negative Cash Flow | Consistently negative operating and investing cash flows imply heavy reliance on financing. | Cash Flow Data |
Competitive and Regulatory Pressure | Intense market rivalry and strict regulatory frameworks could stifle growth. |
Investment Recommendation
Recommendation | Rationale |
|---|---|
HOLD | Strong brand and growth potential balanced by current losses and liquidity challenges warrant a cautious hold until financial performance improves. |
Industry Overview and Competitive Landscape
Industry Overview
Parameter | Detail / Value |
|---|---|
Product | Flavored & Craft Beer |
Bira 91’s Revenue (FY 2023) | INR 8,487,190,000 (~USD 105.75 million) |
Growth Trends | Industry estimates project a CAGR of 15–20% in India's craft beer segment CNB TV18 |
Technological Trends | Adoption of digital marketing, automated production processes, and data analytics for consumer insights. |
Regulatory Challenges | Stringent alcohol advertising rules, state-specific licensing, high excise duties. |
Competitive Landscape
Competitors:
Detailed competitive data is not provided. There is no explicit information on market share comparisons with other brands such as Kingfisher, Budweiser, Heineken, or other craft beer players.Competitive Analysis:
Due to the lack of competitor data, a definitive comparison is not available. Bira 91’s unique value proposition rests on its brand differentiation and diversified product offerings.
Porter’s Five Forces Analysis
Force | Impact Level | Explanation |
|---|---|---|
Threat of New Entrants | Moderate | Brand strength and regulatory barriers offer some protection, although evolving consumer trends reduce entry hurdles. Inc42 |
Bargaining Power of Suppliers | Low to Moderate | Commoditized inputs provide multiple sourcing options; however, quality requirements limit supplier leverage. CNB TV18 |
Bargaining Power of Buyers | Moderate | Consumers are price-sensitive, yet brand loyalty and product uniqueness mitigate extreme buyer power. |
Threat of Substitutes | High | Extensive substitute options exist including wines, liquors, and non-alcoholic beverages. |
Industry Rivalry | High | Intense competition, both from local craft brands and established international players, intensifies the need for continuous innovation. |
Conclusion and Investment Recommendation
Bira 91 has carved out a niche in the rapidly evolving craft beer segment in India. With a robust brand identity, diversified product offerings, and significant Series D funding backing its growth—along with an anticipated IPO in 2026—the company positions itself for market expansion. However, persistent operating losses, negative cash flows, high financial leverage, and liquidity constraints remain critical concerns.
The intrinsic valuation through DCF analysis (with an estimated Enterprise Value of ~43 billion INR) and relative valuation metrics (approximately 5x EV/Revenue) suggest that the current market valuation is fair given the growth potential. Nonetheless, the absence of profitability and the challenging liquidity profile necessitate a prudent investment approach.
Final Recommendation: HOLD
Investors should maintain their current positions while monitoring key catalysts such as improvements in operating efficiency, progress towards profitability, and the upcoming IPO for clearer market validation. Continued operational and financial discipline will be essential to mitigate downside risks and eventually drive long-term shareholder value.
Citations:
Bira91 | Inc42 | CNB TV18 | Livemint | Adgully
This report is based solely on the provided research data and is meant for presentation-ready financial and strategic analysis of Bira 91.
