Sula Vineyards posts lower Q2 profit on tepid urban demand

The company also faced technical issues with accessing New Delhi's Excise portal-used to place orders and update liquor stock-towards the end of the quarter, hurting sales, it said.

India's biggest winemaker Sula Vineyards, reported a 37 percent fall in second-quarter profit on Tuesday, as a slowdown in discretionary spending, especially in urban areas, dampened demand.

Sula's consolidated net profit fell to Rs 14.48 crore in the quarter ended September 30, from Rs 23.09 crore a year ago.

"Q2 was a subdued quarter, due to a slowdown in consumer discretionary demand, particularly in urban areas where 90 percent of our sales are concentrated," Chief Executive Officer Rajeev Samant said in a statement.

The company also faced technical issues with accessing New Delhi's Excise portal-used to place orders and update liquor stock-towards the end of the quarter, hurting sales, it said.

Sula's own brands segment, which contributes about 90 percent of the total revenue, saw a marginal 0.3 percent rise in revenue during the quarter. Its smaller wine tourism segment saw a 0.8 percent increase in revenue.

Sula's total revenue fell 1.1 percent during the quarter, while total expenses rose about 10 percent.

The winemaker's earnings before interest, tax, depreciation, and amortization margin contracted to 24.2 percent from 31.4 percent a year ago.