SULA VINEYARDS LIMITED

Recommendation history

• 2025-08-08HoldHold: Q1 adjusted revenue was flat at INR 118 crore, with own-brand growth constrained by weak urban demand and Maharashtra disruption, while wine tourism grew over 20% and premium/Elite mix reached 75%. The recovery case rests on normalized gross margin near 80% and a couple-hundred-basis-point operating-margin improvement in H2, but management offered no timeline for returning to double-digit growth and acknowledged severe HoReCa discounting.
• 2024-06-26HoldHold: Sula delivered a strong FY24 with double-digit revenue growth, 22% growth in wine-tourism revenue, ROCE above 25%, and more than 50% share of India’s grape-wine segment. However, the AGM provided no forward financial guidance, while shareholder pushback highlighted material issues—top-five customer concentration of roughly 43% of revenue, government grants contributing about 25% of EBITDA, ₹283 crore of borrowings, and ₹19.34 crore of receivables overdue by more than six months—without sufficiently quantified answers.
• 2023-06-23No clear callSula reported a strong FY23: net revenue rose approximately 22% to ₹556 crore, EBITDA exceeded ₹160 crore with a margin above 29%, own brands reached 86% of revenue, and wine tourism revenue grew about 30%. The brand, distribution, premiumization, farmer relationships, and roughly 55% domestic wine-market share are compelling, but this AGM offered no formal near-term guidance, valuation framework, or independent analyst pushback; the evidence supports a high-quality business view, not a clean buy decision.
• —HoldHold: Sula’s Q2 showed flat revenue and a 24% YoY EBITDA decline to Rs. 34 crore despite gross margin improving to 74%; elite/premium grew 7%, but economy/popular fell 18%. The recovery case rests on Q4 demand, Andhra Pradesh reopening, BSF shipments, premium tourism and SulaFest, while borrowings rose to Rs. 330 crore from Rs. 260 crore and management offered limited quantification of the rebound.
• —HoldHold: Q3 was weak, with own-brand revenue up only 1%, EBITDA down 26% to INR 54 crore, and EBITDA margin at 25%—despite premium/elite value growth of 5.5% and Wine Tourism revenue growth of 12%. The bull case is that roughly 200 bps of margin pressure came from temporary WIPS leakage, with 100% eligibility expected from FY26; however, soft urban demand, elevated selling costs, and working-capital stress make the recovery unproven.
• —HoldHold: Sula delivered a strong Q1 FY24, with revenue up 22% to INR118 crore, own-brand growth of 30%, volumes up 15%, and EBITDA margin of about 27%. The growth is encouragingly premium-led, but management expects the unusually large value-versus-volume uplift to normalize and sees limited further margin expansion; the outstanding Maharashtra VAT refund and more than INR100 crore excise-duty demand remain material overhangs.
• —BuyBuy: Sula delivered a strong Q2 with revenue up 11.6% to ₹142.8 crore, own-brand revenue up just over 12%, Elite & Premium up 15%, EBITDA margin at a record 31.6%, and H1 PAT up 21%. Premiumization, wine tourism growth of 27%, and falling Maharashtra exposure support the thesis, but valuation, near-peak gross margins, unresolved Maharashtra matters, and high capacity utilization remain the key tensions.