Sula Vineyards Jumps 11% on Q4 Sales Update; Key Details Investors Must Know

Shares of Sula Vineyards zoomed nearly 11 per cent to Rs 390 in the opening trade on April 12. The stock witnessed a steep increase as the wine producer on Tuesday said sales volume from its own brands crossed 1 million cases in FY23. Besides, sales volumes in elite & premium wines went past the 5 lakh cases mark for the first time, the company informed in its business update.

The Company, the regulatory filing added, has recorded its highest ever annual revenues both for its own brands as well as the wine tourism business. “The company witnessed a strong nearly 15 per cent growth YoY Q4FY23 for its own brands. Wine tourism grew by nearly 18 per cent YoY Q4FY23 with a nearly 30 per cent jump in FY23 over FY22,” the statement said.

On the National Stock Exchange (NSE), the stock rallied 7 per cent to Rs 377.10 in intra-day trade. It had hit a 52-week high of Rs 432 on January 23, 2023.

Sula Vineyards is India’s largest and only listed wine producer with over 60 per cent share in the Elite & Premium1 wine business.

Sula Vineyards shares were listed on the bourses on December 22 last year, wherein the company had made a muted debut. The stock was listed at Rs 361 against the issue price of Rs 357. The initial public offering of Sula Vineyards was subscribed 2.33 times during December 12-14, 2022.

The company’s own brands sales volumes crossed 1 million cases, with Elite & Premium wines surging past the 5 lakh case-mark for the first time. The company recorded its highest ever annual revenues both for its own brands as well as the wine tourism business.

Last month brokerage firm CLSA initiated coverage on Sula Vineyards with ‘Buy’ rating on the stock, and target price of Rs 475 per share.

According to analysts at CLSA, Sula is well placed to leverage global consumers shift to low-alcohol beverage segment – beer and wine.

“With strong backend capabilities and a pan-Indian distribution network, Sula is India’s market leader in wines with a > 52 per cent market share in the 100 per cent grape wine category. The company’s healthy Ebitda margin ( > 29 per cent in 9mFY23), gives Sula the ability to invest in category development which would be key for long-term growth,” the brokerage firm added.

The brokerage firm expects the company to clock 17.5 per cent revenue CAGR and an 18.6 per cent EPS CAGR over the next two years. However, they anticipate Ebitda margins to moderate to 27.3 per cent by FY25CL, as the company focusses on category development.

The company had raised Rs 960 crore through initial public offering (IPO) by issuing shares at price of Rs 357 per share. It made its stock market debut on December 22, 2022. Post debut, the stock hit a low of Rs 305.35 on December 26, 2022.

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