Sula vineyards - pioneers in indian wines

First Tasting Room outside Sula’s Wineries
Record 2024 grape harvest
300K footprint for testing

PressReleaseSula.pdf (694.7 KB)


Hi I have QQ -For the below highlighted figure ,is the Purchase of PP&E is a real purchase of the plant and machinery or its just an general raw material and repairing of the machinery .

I want to understand like are they purchasing PP&E for growth so that they can increase production capacity Or its just a maintenance no Capacity increase .

Looking at the balance sheet ,it seems to be main reason behind reducing free cash flow.

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For that you have to search elsewhere. Try to get a judgement of how much fresh capacity creation costs or what may be the maintenance capex for the company given its gross block. Listen to the concall, see the investor presentation or compare the production capacity last year vs. current year in the Annual Report. If it is not given anywhere write to the company or ask a question in the concall / AGM.

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Sula vineyards has approved the acquisition of N D VINES PRIVATE LIMITED. N D VINES HAS A TURNOVER OF INR 2.30 CRORE IN F.Y 2023

Great move considering that the VAT refund is based on number of wineries.

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Interesting to see at what price to sales the final acquisition would be done.

Its 6xsales. Minimum 20 characters

Completion of acquisition of N D Wines Private Limited
SULA WINE.pdf (277.3 KB)


Sula Vineyards reported a 4.2% drop in fourth-quarter profit.
Sula’s revenue rose nearly 10% to ₹131.7 crore in the quarter on a 14% jump in wine sales.The company’s wine tourism segment grew more than 31%. However, the cost of raw materials, which include grapes, sugar and yeast, surged nearly 9% to ₹88.8 crore, hurting its profit.

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Why there is drop in revenue in the 4th Quarter of every year?

Revenue Rose 10%, but the profit is down 4.2%.

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I mean QOQ is there any seasonality effect

Yeah, in comparison to the December Quarter to the March Quarter, Sula’s Wine tourism boosts their sales in the December Quarter.

It may not be only Wine Tourism is the driver for seasonality. Tourism reported revenues actually are largest in the Mar quarter. There is a seasonality in the wine business - primarily due higher consumption during ‘festival’ season. See revenues by quarter (INR mn) and segment for the last two financial years. The Mar quarter is the largest quarter for wine tourism

Segment revenues Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24
Own brands 783 1,133 1,856 1,035 1,017 1,268 1,928 1,129
Wine Tourism 103 96 124 127 115 121 147 164
Others 86 48 103 38 34 39 100 24

However, please note that the wine tourism reported revenues are primarily revenues for hospitality. There is also an element of wine sales (e.g. through their shops) that are captured as part of wine sales (rather than tourism sales). In the call yesterday they indicated this number is ~15% of wine sales.


Yep I second the holiday season point, wine is supposed to be a celebratory drink, hence the boost in income during the December quarter.

Sula Reminds me of KRBL, but they’re in a slightly Sexier biz with a bigger TAM/Growth.

The ageing part and working capital intensity is similar to basmati rice.


Can you pls elaborate this analogy! Thanks

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Sula and KRBL Similarities

Ageing is critical for both the businesses.

Longer you age grape - Better the wine, better the pricing.

Longer you age basmati - Longer product better aroma, better the pricing.

KRBL Cons inventory Days 2023 - 404 Days
Sula Cons Inventory Days 2024 - 540 Days

In their best of days 2014-15-16 (ROE) for KRBL was touching 30% when the working capital (Inventory being aged ) was funded by debt.

When the company went debt free inventory was funded by retained profits / equity and that started hurting ROE.

Because equity has been cheap for Sula it has been funding wine ageing from equity.

Ideally these business require some sort of LEVERAGE for good ROEs in my opinion.

Only exception would be when the end product is AAA in quality / niche so the company has very strong pricing power.

If Sula wants to Scale up and become the kingfisher of wines without compromising on ROEs then I think they may have to -
Outsource ageing of Grapes
Reduce inventory days (compromise product quality?)
Fund working capital with debt
Somehow manage to get high pricing power with economies of scale

PS - I have not worked in depth @ Sula…these are just observations I made. I was invested in KRBL but was seeing a serious ROE drop due to competition & Promoters unwilling to take debt. Hence Exited.


Thanks for the interesting comparison. Sula’s usp and success has been because of the vineyards ecosystem which it sells as tourism as well. Is it possible to outsource parts of wine making process and just hold the farms i.e. production and later marketing/selling/distribution? Has some other global wine company done that?

Aslo the issue with ROE, competetion, inventory you mentioned…is it same for beer and spirits company also? For spirits the same thing of ageing also applies…would be good to know your thoughts.

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Sula Vineyard phasing out low-priced segment; to focus on premiumization