Sula Vineyards, the largest wine producer in India, saw a notable rise in its stock price, increasing by around 4% to reach ₹485 apiece in early trade on Thursday. This surge came in response to the company’s strong Q2FY24 sales update.
In an exchange filing on Wednesday, the company said that its revenue growth (estimated) from its own brands rose by 14% YoY to ₹116.2 crore, while it reported the revenue growth (estimated) from its wine tourism business at ₹12.1 crore, a surge of 26% YoY. For H1FY24, the company posted a 22% YoY surge in revenue to ₹209.3 crore from its own brands and a 19% YoY improvement to ₹23.3 crore from wine tourism.
During the quarter, Sula also expanded the iconic Nasik Winery Tasting Room to keep up with the continuing surge in visitor numbers.
Commenting on the Q2 trading update, Sula CEO Rajeev Samant said, “We are pleased to announce yet another quarter of double-digit growth, both in our all-important Own Brands and Wine Tourism businesses. Our focus on premiumization continues to pay off, with our Elite and Premium wines leading the way with 18% YoY growth in Q2 and 24% YoY growth in H1, bucking the slowing trend in discretionary spending in the overall economy during Q2.
“I am also very pleased to announce the launch of our first Pinot Noir from The Source range, Sula’s fastest-growing premium wine brand. The Source Pinot Noir is now available in Maharashtra and will be launched in other key markets in FY25.”
Rajeev further added, “Our world-renowned wine tourism business continues to shine brightly, growing at 26% in Q2, and I am especially happy to note a massive 43% jump in tastings to over 49,000 this quarter over Q2 FY23. The future looks even brighter as we achieved our highest ever footfall on October 1, 2023, with a record 3,8501 wine adventurers passing through our gates.”
Sula Vineyards is engaged in the manufacture, purchase, and sale of premium wine and other alcoholic beverages. The company’s shares were listed on the exchanges on December 22, 2022, at a price of ₹331.2 apiece, 7.2% lower than the issue price of ₹357.
However, the stock quickly recovered in the following month with a gain of 14% and extended its winning streak for the next seven months to mark a new all-time high of ₹535 apiece. At current levels, the stock is trading 36% higher than its IPO price.
Earlier in August, domestic brokerage firm Hem Securities initiated coverage on the stock with a buy call, setting a target price of ₹587 apiece.
Sula aims to tap the potential of the under-penetrated wine industry in India with an offering of the widest product range in the Indian wine market. The share of wine as a form of alcohol consumption in India in CY21 was less than 1%, said the brokerage.
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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Updated: 12 Oct 2023, 10:20 AM IST