Sula Vineyards share price slides over 5.5% on drop in Q4 net profit

Sula Vineyards, India’s largest wine producer, experienced a 5.60% decline in its shares, falling to 511.60 apiece during today’s trading session, as investors reacted negatively to the company’s performance in the March quarter. The decline in the stock price today has pushed it to trade near its lowest point in the past two months.

The company on Wednesday reported a 4.85% decrease in its consolidated net profit to 13.55 crore for Q4FY24, compared to 14.24 crore in the same period last year. This decline in profit was attributed to a notable increase in total expenses (RM costs), which rose to 116.83 crore in Q4 from 100.83 crore in the corresponding period the previous year, as per the company’s regulatory filing.

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Despite total revenue from operations during the reporting quarter increasing by 12.1% year-on-year (YoY) to 135.6 crore, it witnessed a significant decline compared to the 217.54 crore reported in the preceding quarter.

Overall, for FY24, the company achieved its highest-ever revenue, EBITDA, and PAT (Profit After Tax) of 616.4 crore (up 10.7% YoY), 183.6 crore (up 11.1% YoY), and 93.3 crore (up 11.0% YoY), respectively. 

Rajeev Samant, CEO, Sula Vineyards, said, “Our premiumization efforts have succeeded in raising our Elite and Premium wine share to an all-time high of 75.1% in Q4, up from 71.7% a year ago. Our Elite and Premium wines achieved 15.5% growth this year, contributing to an over 110 bps increase in our EBITDA margin to an all-time high in FY24.”

Rajeev said the company’s wine tourism revenues grew in double digits for the fifth quarter in a row. “Wine tourism is a top priority, and we are expanding fast. Last week, we opened Milestone Cellars by Sula, our first standalone tasting room and wine bar outside our own winery campuses, located a stone’s throw from Nashik airport. We have also signed a new resort next to our York Winery slated to open in mid-2025, which will be our first with convention facilities,” he added. 

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Meanwhile, the company announced the completion of the ND Wines acquisition. ND Wines is now a part of Sula, and the site has tremendous wine tourism potential. Work is about to begin on expanding the current 120-square-foot bottle shop to a 3,600-square-foot wine tourism destination less than 50 km from the Gujarat border.

“All these projects, and more to come, will ensure that Sula remains firmly at the forefront of wine tourism in India,” Rajeev stated. 

Sula Vineyards specialises in the production, procurement, and distribution of premium wines and other alcoholic beverages. Presently, Sula offers the largest variety of wines in the Indian market, categorised as ‘Elite’ and ‘Premium’, encompassing a total of 34 labels.

Also Read: L&T share price down 4% post Q4 results; Buy, Sell or Hold the stock?

The company’s shares commenced trading on the exchanges on December 22, 2022, at 331.2 per share, compared to the issue price of 357. With the stock closing at 541.95 apiece on Wednesday, it reflects a 52% increase from its IPO price.



Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 09 May 2024, 12:26 PM IST

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