India's Sula Vineyards posts Q1 profit rise on higher demand for cheaper wine

Sula Vineyards

07/08/2024 13:58

BENGALURU, Aug 7 (Reuters) - 
    India's Sula Vineyards  SULA.NS  reported a rise in
quarterly profit on Wednesday as consumers snapped up more of
its cheaper wine, outpacing feeble demand for its premium
offerings due to national elections and heatwaves during the
period.
  
    The country's biggest wine maker's consolidated net profit
rose 7% year-on-year to 146.3 million rupees ($1.7 million) for
the quarter ended June 30.
    Its profit had fallen in the previous quarter.
    About 70% of the company's sales come from its key states of
Maharashtra and Karnataka. Sula is also expanding its operations
in other states including Telangana and Rajasthan, where sales
have picked up pace.
    Sula's revenue grew more than 10% during the quarter to 1.28
billion rupees, its second straight quarter of growth, aided by
a 24.4% jump in its cheaper wine segment.
    Its elite and premium segment, however, logged a 7.4%
decline in sales volume. The business accounts for 71% of its
revenue.
        National elections led to restrictions on the alcohol
beverage industry and, this, coupled with heatwaves, hurt the
company's sales during the quarter, CEO Rajeev Samant said in a
statement.
  
    Sula, the only listed winemaker in India, did not provide
the sales volume of its cheaper segment or the revenue numbers
for its more expensive segment.
    Wine sales make up about 88% of its net revenue.
    The smaller wine tourism segment logged an 2.3% fall in
revenue as fewer people visited its vineyards during the quarter
due to heatwaves. 
        In July, the company said it 
    plans
     to broaden its wine tourism business and will launch a
resort at York Winery, situated at its Nashik property in
Maharashtra in 2026.
  

($1 = 83.9230 Indian rupees)

 (Reporting by Varun Hebbalalu and Ashna Teresa Britto in
Bengaluru; Editing by Sonia Cheema)
 ((AshnaTeresa.Britto@thomsonreuters.com;))