Sula Vineyards Stock Price Surge on Strong Q2FY24 Sales Update

Sula Vineyards share price, India's largest wine producer, surged by 4% in early trading on Thursday, reaching ₹485 per share. This surge was a direct response to the impressive sales update for Q2FY24. In an exchange filing on Wednesday, Sula Vineyards reported substantial revenue growth in Q2FY24. Revenue from its own brands increased by 14% Year-on-Year (YoY), reaching ₹116.2 crore, and its wine tourism business saw a YoY surge of 26%, totaling ₹12.1 crore. For the first half of FY24, the company posted a 22% YoY increase in revenue from its own brands, totaling ₹209.3 crore, and a 19% YoY improvement in revenue from wine tourism, amounting to ₹23.3 crore.

Expansion and CEO's Comments

During the quarter, Sula expanded its Nasik Winery Tasting Room to accommodate the growing number of visitors. Sula's CEO, Rajeev Samant, commented on the Q2 update, expressing his satisfaction with the double-digit growth in both their Own Brands and Wine Tourism businesses. He attributed this success to their focus on premiumization. Elite and Premium wines led the way with 18% YoY growth in Q2 and 24% YoY growth in H1, despite a slowdown in discretionary spending in the overall economy during Q2.

He also announced the launch of Sula's first Pinot Noir, the company's fastest-growing premium wine brand. Pinot Noir is now available in Maharashtra and will be introduced in other key markets in FY25.

Wine Tourism Success

He also stated that Sula's world-renowned wine tourism business continued to shine brightly, growing at 26% in Q2. Highlighted a massive 43% increase in tastings, with over 49,000 recorded in this quarter compared to Q2 FY23. Notably, Sula achieved its highest-ever footfall on October 1, 2023, with a record-breaking 3,8501 wine enthusiasts visiting the vineyards.

Stock Performance

Sula Vineyards' shares were listed on the exchanges in December 2022 at ₹331.2 per share, 7.2% lower than the issue price of ₹357. However, the stock quickly recovered in the following month, gaining 14%. It continued its winning streak for the next seven months, reaching an all-time high of ₹535 per share. As of the latest data, the stock is trading 36% higher than its IPO price. In August.  Over the past month, Sula's stock has remained relatively stable, with a minimal 1% decrease in value. However, when looking at a slightly longer timeframe of the last six months, the stock has given an impressive 23% return to its investors.

stock peaked at ₹535 in July 2023, and is now trading at ₹473, indicating investors are booking profits. The Relative Strength Index (RSI) is at 56, indicating a balanced condition, not overbought or oversold. If the stock's price falls, it may find support at around ₹449.

Sula's Industry Focus

Sula Vineyards is committed to exploring the untapped potential of the Indian wine industry by offering the widest product range in the market. As per brokerage reports wine consumption in India accounted for less than 1% of total alcohol consumption in CY21.

In summary, Sula Vineyards is thriving with impressive growth in its brands and wine tourism. The company's expansion and premiumization efforts, along with the launch of new products, have contributed to its success. The stock has also performed exceptionally well, and analysts are bullish about its future prospects in the Indian wine industry.