Sula Vineyards, India’s biggest wine maker by revenue, reported a 5 per cent drop in fourth-quarter profit on Wednesday (May 8), as mounting expenses overshadowed steady demand for its premium brands such as Rasa and Dindori.
The Mumbai-headquartered company’s consolidated net profit fell to 135.5 million rupees (S$2.2 million) in January-March from 142.4 million rupees a year ago.
Rapid growth of restaurants and increasing incomes have nudged India’s rising well-to-do young crowd towards wine consumption.
Sula’s revenue rose nearly 10 per cent to 1.32 billion rupees in the quarter on a 14 per cent jump in wine sales.
However, the cost of raw materials, which include grapes, sugar and yeast, surged nearly 9 per cent to 888.8 million rupees, hurting its profit.
The winemaker’s earnings before interest, tax, depreciation and amortisation margin contracted to 25.3 per cent from 26.4 per cent a year ago.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The company’s wine tourism segment grew more than 31 per cent.
“Wine tourism is a top priority and we are expanding fast,” CEO Rajeev Samant said in a statement.
Sula recommended a final dividend of 4.50 rupees per share. Its shares closed up 1 per cent ahead of results. REUTERS
