Shares of this alcohol stock rose by nearly 2 percent following Citi Group’s acquisition of shares in the company and are projected to have a 24 percent upside potential.
Share Price Trends
In Wednesday’s trading session, Sula Vineyards Limited‘s share price opened at Rs.482.6 per share and climbed to an intra-day high of Rs.490.6 per share, marking a 1.65 percent increase. The share has since fallen and is currently at Rs.485.45 per share.
What happened
On September 3, 2024, Sula Vineyards witnessed a notable block trade on the NSE. Citigroup Global Markets Mauritius Pvt Ltd. executed a purchase transaction involving 2,28,235 shares at Rs.487.9 per share.
Simultaneously, Morgan Stanley Asia (Singapore) Pte. conducted a block sale of the same quantity of shares, also at Rs.487.9 per share. This coordinated trading activity reflects significant institutional interest and liquidity in Sula Vineyards stock.
Segment Revenue
In Q1 FY25, the company derived 71 percent of its revenue from Elite and Premium segment wines, while the remaining 29 percent came from Economy and Popular segment wines.
Revenue from the company’s brands grew to 88.4 percent, up from 86.1 percent in Q1 FY24. Additionally, 8.7 percent of revenue was derived from wine tourism, while 2.9 percent came from the sale of imported wines and other business ventures.
Capacity Expansion Plans
The company plans to increase its wine production capacity to approximately 1 million liters by 2025, reflecting a 6 percent growth. During FY23-24, the plant’s capacity utilization was around 85 percent.
Price Target
Analysts at Trade Brains have issued a “Buy” recommendation for the stock, setting a target price of Rs.602 per share, based on a 44x price-to-earnings ratio for FY25 earnings estimates. This implies an upside potential of 24 percent from the stock’s current price.
Financial Performance
Turning to the company’s financials, Sula Vineyards reported Q1 FY25 revenue of Rs.118 crore, up 9.25 percent from Rs.108 crore in the same quarter last year. However, Profit After Tax (PAT) fell by 6.25 percent to Rs.15 crore, compared to Rs.16 crore in the previous year’s quarter.
Company Overview
Sula Vineyards Limited is India’s largest wine producer, offering a range of products including red, white, rosé, sparkling wines, brandy, and spirits. The company operates four owned and two leased facilities in Maharashtra and Karnataka.
With a 60 percent market share in the premium wine sector, Sula offers 68 labels across 14 brands, including 21 elite labels, 14 premium labels, 10 economy labels, 6 popular labels, and 17 imported labels.
Written by – Siddesh S Raskar
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