Sula Vineyards Q2 results: PAT falls 37% to Rs 14.48 cr on low urban demand

India's biggest winemaker Sula Vineyards, reported a 37 per cent 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 ($1.72 million) in the quarter ended Sept. 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 per cent 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 per cent of the total revenue, saw a marginal 0.3 per cent rise in revenue during the quarter. Its smaller wine tourism segment saw a 0.8 per cent increase in revenue.

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

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