Sula Vineyards (SULA) Q4 20/21 earnings summary

Executive summary

• FY21 began with severe Covid-related disruption, but sales and hospitality rebounded in H2; EBITDA reached a recent high and share exceeded 70% in wines above ₹700 MRP.

• Consolidated revenue fell 19.5% YoY, while EBITDA rose 23.7%; focused operations and stronger off-trade sales lifted EBITDA margin to 14.5% from 9.4%.

Financial highlights

• Consolidated revenue from operations was ₹424.2cr vs ₹529.5cr; total income was ₹427.8cr vs ₹531.1cr in FY20.

• Consolidated PBT was ₹3.2cr vs a loss of ₹17.4cr; net profit was ₹2.8cr vs a loss of ₹13.5cr, including an exceptional ₹2.2cr impairment.

• Standalone revenue was ₹339.6cr vs ₹428.0cr; EBITDA was ₹57.0cr vs ₹53.4cr, while net loss narrowed to ₹0.6cr from ₹8.2cr.

• No FY21 dividend was declared, citing Covid-19 uncertainty.

Outlook and guidance

• On-trade sales were expected to remain subdued for at least another year as home consumption and off-trade sales gained traction.

• Solar contribution target: 75% of energy needs by FY23; further water-use reduction target of 15% in FY22, with a long-term goal of 50 litres per case.

• SEO and digital marketing efforts were planned to expand further in FY22; wine tourism prospects were described as strong following new direct flights to Nashik from major Indian metros.