CLSA starts Sula Vineyards with 'buy,' cites shift in consumer preference

Sula Vineyards

21/03/2023 09:27

** Winemaker Sula Vineyards Ltd  SULA.NS  is well placed to
leverage global consumer shift towards low alcohol beverage
segment - beer and wine with huge headroom to grow, say analysts
at research firm CLSA
    ** CLSA initiates coverage with 'buy' rating and PT of 475
rupees
    ** "Healthy EBITDA margin gives SULA ability to invest in
category development, which would be key for long term growth,"
analysts say 
    ** CLSA expects ~18% revenue CAGR and ~19% EPS CAGR over
next two years, but EBITDA margins to moderate to 27.3% as
company focuses on category development
    ** Adds, "SULA's key competitive advantages include - the
largest national wine distribution network, robust manufacturing
capabilities and strong sourcing ability with respect to
long-term contracts with third-party farmers"
    ** Stock rises as much as 3.21% to 340.95 rupees
    ** Trading volume at ~279,100 shares vs 30-day avg of
~492,400 shares as of 2:45 p.m. IST
    ** Up to last close, stock was down 0.4% since its market
debut on Dec 22

 (Reporting by Biplob Kumar Das in Bengaluru)
 ((Biplobkumar.das@thomsonreuters.com))