India’s biggest winemaker, Sula Vineyards, saw a 17.30% increase in its stock price today following an upgrade to a ‘Buy’ recommendation and a boost in target price from international brokerage CLSA.
After an 11.40% increase in the previous trading session, Sula Vineyards, the biggest winemaker in India, witnessed a tremendous increase in its stock price today, rising by nearly 17.30% to hit a new historic high of ₹649.95 apiece.
The increase today was a reaction to the optimistic assessment of the company by international brokerage firm CLSA. As reported by CNBV-TV18, the brokerage has raised the target price for the stock to ₹863 per share from ₹571 per share and improved the stock rating to ‘Buy’ from ‘Neutral’ in its most recent note.
The stock has increased by 55.77% from its previous closing price of ₹554 according to this revised target price. According to the brokerage, the growing middle class, the rapid expansion of restaurants, and rising earnings will propel wine consumption in India to increase at a compound annual growth rate (CAGR) of 15% over the next ten years.
Sula Vineyards, with its market share leadership in the wine sector and its leading position in wine tourism, stands to gain a great deal from this trend, the brokerage emphasizes.
As the brokerage points out, wine tourism is a source of income for the business and also acts as a stimulant to increase consumer interest in wines in a legal environment that restricts alcohol advertising.
The company announced in an exchange filing on December 27 that over the extended Christmas weekend, its Wine Tourism division broke records for visits, sales, and tastings.
On December 24, 5,300 people, for the first time ever passed through the gates of Sula in one day. With nearly 12,000 visitors between December 23 and 25, Sula’s Nashik and Bengaluru wine tourism facilities established records for single-day, two-day, and three-day visitor counts, “the firm claimed in an exchange filing.
A record revenue of ₹2.28 crore was reportedly recorded by the company during this period.
Expansion for Wineries
The Maharashtra government is planning to bring back the Wine Industry Promotion Scheme (WIPS), according to recent media reports. On January 4, this decision was made in the state cabinet. In 2009, the state created WIPS, an incentive program, to support the wine industry. It is applicable to anyone who makes wine from grapes cultivated in Maharashtra.
However, in the wake of the successive lockdowns implemented to contain the COVID-19 epidemic in June 2020, the plan to alleviate the financial crunch was momentarily shelved.
Furthermore, vineyards receive a 16% rebate on the 20% VAT. Maharashtra’s wine growers were greatly relieved to hear this news, especially Sula Vineyards, where the company is well-established.
Run Record
Sula Vineyards is a company that produces, buys, and sells fine wine and other alcoholic drinks. Under the ‘Elite’ and ‘Premium’ categories, Sula currently produces and markets the widest range of wines available in the Indian wine market under 34 different labels.
According to Mint, the company’s shares debuted on the exchanges on December 22, 2022, at 331.2 per share, a 7.2% drop from the issue price of 357. But the stock bounced back quickly, rising 57% over the next seven months.
The stock has continued on its upward trajectory, gaining 78% above its IPO price while retaining pace. As of 12:45 PM, the stock was trading at ₹636.70 per share, having gained 14.85%.
