Sula Vineyards hits new high; soars 30% in 2 days on healthy biz outlook

A combined 6.95 million equity shares representing 8 per cent of total equity of Sula had changed hands on the NSE and BSE till 10:09 AM.

Shares of Sula Vineyards, India’s largest and only listed wine producer, hit a new high of Rs 648.75, surging 17 per cent on the BSE in Monday’s intra-day trade in an otherwise subdued market. The rally was backed  by heavy volumes on healthy business outlook. In past two trading days, the stock price of breweries & distilleries company has zoomed 30 per cent. In past 11 trading days, it rallied 41 per cent.

The average trading volumes at counter more than doubled today. A combined 6.95 million equity shares representing 8 per cent of total equity of Sula changed hands on the NSE and BSE. In comparison, the S&P BSE Sensex was down 0.11 per cent at 71,948 at 10:09 AM.

Meanwhile, global brokerage firm CLSA recommended a 'Buy' rating on Sula and raised the target price of the winery to Rs 863 per share from Rs 571 per share.

Highlighting the rationale behind the target upgrade, analysts at CLSA believe that Sula is best placed to benefit from wine catch-up penetration. The brokerage firm has raised FY24-26 estimates up to 4 percent, Moneycontrol reported.

Meanwhile, on December 27, 2023, Sula said that their iconic Wine Tourism business set new records for visitor numbers, revenues and tastings over the long Christmas weekend.

Analysts at Kotak Securities expect 9-10 per cent year-on-year (YoY) growth in net revenue in December quarter (Q3FY24), led by high-teen growth in elite and premium segment wines and robust growth in the hospitality business in the holiday season. Salience of premium and elite wines is expected to increase further as economy and popular are expected to grow in mid-single digit (value terms), the brokerage firm said in earning preview.

Analysts model 69.5% GM (in-line with seasonality), up 135 bps YoY, led by product mix improvement and no material inflation in grape wine prices. The brokerage firm expect EBITDA margin to be range bound (32-33 per cent band).