Som Distilleries clarifies on child labour issues; stock dives 16% today

Som Distilleries & Breweries Ltd shares plunged 15.83 per cent to hit a low of Rs 105 in Tuesday's trade. The stock heavy trading volume on BSE today as around 11.47 lakh shares changed hands at the time of writing this story. The figure was way more than the two-week average volume of 1.57 lakh shares.

Turnover on the counter came at Rs 12.78 crore, commanding a market capitalisation (m-cap) of Rs 2,220.68 crore.

The company has recently issued a clarification over reports of child labour. The government's child rights agency announced it had found children working at a distillery. The National Commission for Protection Of Child Rights (NCPCR) said it had found more than 50 children at a plant in Raisen district of Madhya Pradesh.

"In response to media reports concerning child labour issues at our company we wish to clarify that these concerns are not related to Som Distilleries and Breweries Ltd but relate to our associate Pvt Ltd company which deals in country liquor primarily, and not the listed company as reported," it stated.

"Also we wanted to clarify that labour for the associate company is supplied by contractors. It may be the fault of the contractors who may not have got proper age verification done of the workers being allowed to work at that company. That company has extended full cooperation to the authorities regarding the issue and have terminated the services of the vendor through the directors of that company," Som Distilleries added.

On technical setup, the counter was trading lower than the 5-day, 10-, 20-, 30-, 50-day and 200-day simple moving averages (SMAs) but higher than the 100-day and 150-day SMAs. The counter's 14-day relative strength index (RSI) came at 40.36. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 20.63 against a price-to-book (P/B) value of 1.90. Earnings per share (EPS) stood at 6.05 with a return on equity of 9.22.

As of March 2024, promoters held a 35.26 per cent stake in the company.