Sula Vineyards share drops 7% on weak Q4 performance

The fall came on the back of weak quarter-ending March performance by the winemaker. Its net profit fell over 4 per cent on a year-on-year (Y-o-Y) basis to 13.6 crore in Q4FY24

Shares of Sula Vineyards fell as much as 6.67 per cent to hit an intraday low of Rs 505.55 per share. 

The fall came on the back of weak quarter-ending March performance by the winemaker. Its net profit fell over 4 per cent on a year-on-year (Y-o-Y) basis to 13.6 crore in the March quarter of financial year 2024 (Q4FY24), from Rs 14.2 crore in the same quarter a year ago (Q4FY23).

However, Sula Vineyards’ revenue soared 8 per cent to Rs 131.7 crore in Q4FY24, from Rs 120 crore in Q4FY23.

The Mumbai-based company’s earnings before interest, taxes, depreciation and amortisation (Ebitda), also known as operating profit, dropped 4.2 per cent on a year-on-year basis to Rs 29.5 crore in the March quarter of FY24, from Rs 30.8 crore in the March quarter a year ago. 

The Ebitda margin, meanwhile, squeezed 310 basis points (bps) to 24.1 per cent, as against 27.2 per cent a year ago.

Additionally, the board of directors have recommended a final dividend of Rs 4.50 per share. 

Sula Vineyards’ revenue from its own brands rose 9.1 per cent Y-o-Y to Rs 112.9 crore. Its elite and premium wine revenue rose 14.3 per cent to Rs 84.9 crore, while elite and premium volume grew 18.3 per cent in Q4FY24.

“Our premiumisation efforts have succeeded in raising our Elite and Premium wine share to an all-time high of 75.1 per cent in Q4, up from 71.7 per cent a year ago. Our Elite and Premium wines achieved 15.5 per cent growth this year, contributing to an over 110 bps increase in our EBITDA margin to an all-time high in FY24. Our wine tourism revenues grew in double digits, for the fifth quarter in a row, said Rajeev Samant, chief executive officer of Sula Vineyards.

The company further said that wine tourism is its top priority. On future prospects, Samant added, “Last week we opened Milestone Cellars by Sula, our first standalone Tasting Room/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. We are pleased to announce the completion of ND wines acquisition in record time. ND wines is now a part of Sula and the site has tremendous wine tourism potential and work is about to begin on expanding the current 120 sq ft bottle shop to a 3,600 sq ft wine tourism destination less than 50 km from the Gujarat border.” 

At 11:40 AM, Sula Vineyards’ stock was trading 6.48 per cent lower at Rs 506.60 apiece. By comparison, S&P BSE Sensex was trading 0.59 per cent lower at 73,032.53 levels.