Sula Vineyards shares crack 6% on weak Q2 earnings show

Over the past 12 months, shares of Sula has fallen around 20 percent.

Shares of Sula Vineyards took a sharp tumble on the bourses during the morning session on November 13, after the wine player reported a weak earnings show for the quarter ended September.

Sula Vineyards 's consolidated net profit fell 37 percent on-year to Rs 14.48 crore in the quarter ended September 30, from Rs 23.09 crore a year ago.

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.

At 9.19 am, shares of Sula Vineyards were quoting Rs 390.85 on the NSE, lower by 6.1 percent compared to the previous session's closing price.

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"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.

Over the past 12 months, shares of Sula has fallen around 20 percent as against a 25 percent jump in the benchmark Nifty 50 during the same time period.

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