Sula Vineyards (SULA) Q2 24/25 earnings summary

Executive summary

• Achieved tenth consecutive quarter of growth in own brand segment, maintaining nearly 60% market share in premium wines and national leadership, despite modest overall revenue growth due to challenging demand and disruptions in key states.

• Winery capacity stands at 16.7 million liters, among Asia's top 5, sourcing from over 2,800 acres, and recognized as a Great Place to Work for three consecutive years.

• Strong sustainability focus, with over 60% of energy needs met by solar in H1 FY25.

• Wine tourism business faced headwinds from lower footfalls and increased outbound travel, but higher spend per visitor and new facility openings are expected to support future growth.

• Leadership changes include the resignation of the COO, new board appointments, and a new Company Secretary and Compliance Officer.

Financial highlights

• Q2 FY25 consolidated revenue from operations was ₹141.21 crore, down from ₹142.83 crore in Q2 FY24; H1 FY25 revenue was ₹269.65 crore, up 3.7% YoY.

• Q2 FY25 EBITDA at ₹34.4 crore, down 23.8% YoY; PAT at ₹14.5 crore, down 37.3% YoY; gross margin improved to 74%, up 178 bps YoY.

• Elite and premium portfolio grew 7% YoY in Q2, with their share in own brands at an all-time high of 78.5%.

• Total borrowings increased to ₹330 crore, mainly due to higher receivables from Telangana and acquisition-related needs.

• Net profit for Q2 FY25 was ₹14.48 crore, and for H1 FY25 was ₹29.11 crore, both lower than the prior year.

Outlook and guidance

• Cautiously optimistic for H2 FY25, expecting benefits from festive demand, Andhra Pradesh reopening, new CSD brands, BSF shipments, and SulaFest.

• Planned expansions in wine tourism and a new resort to boost future performance.

• Wine tourism revenues expected to improve in December due to strong wedding season bookings and new facility launches.