Tag: sula vineyards

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IndiGo Posts Rs 3,091Cr Profit in Q1 – Top Indian Market Updates

indigo

Here are some of the major updates that could move the markets tomorrow:

IndiGo Q1 Results: Net profit at ₹3,091 crore

InterGlobe Aviation (IndiGo) reported a consolidated net profit of ₹3,091 crore for the quarter ended June (Q1 FY24); beating street estimates. This is the highest-ever quarterly net profit reported by the budget carrier. The airline posted a loss of ₹1,064 crore in Q1 FY23. Its revenue from operations rose 30% YoY to ₹16,683 crore during the same period. IndiGo’s passenger ticket revenues were at Rs 14,996 crore, up 31% YoY.

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Carlyle to acquire 5.91% stake in SpiceJet at Rs 48 per share

SpiceJet Ltd has sought shareholder approval to issue a 5.91% stake in the low-cost airline to Carlyle Aviation Partners (CAP). CAP is the aircraft financing unit of global private equity giant Carlyle Group. The company will also issue equity shares of 20% to promoter Ajay Singh (the airline’s CEO) at ₹10 per share.

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Titan Q1 Results: Net profit falls 2% YoY to ₹777 crore

Titan reported a 2% YoY decline in net profit of ₹777 crore for the quarter ended June (Q1 FY24). Its revenue from operations rose 19% YoY to ₹10,306 crore during the same period. The company’s jewellery segment posted revenue of ₹9,070 corre in Q1, up 19% YoY. Titan’s watches and wearables business recorded a total income of ₹890 crore, up 13% YoY.

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Tata Power RE signs PPAs with MSEDCL for solar projects

Tata Power Renewable Energy Limited (TPREL) has signed two power purchase agreements (PPAs) with Maharashtra State Electricity Distribution Company Ltd. (MSEDCL) for commissioning two solar power projects. Located in Maharashtra, these projects of 200 MW and 150 MW will play a crucial role in fulfilling the state’s renewable energy target.

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Gujarat Gas Q1 Results: Net profit falls 43% YoY to ₹216 crore

Gujarat Gas reported a 43% YoY fall in consolidated net profit to ₹216 crore for the quarter ended June (Q1 FY24). Its revenue from operations fell 26% YoY to ₹3,923.7 crore during the same period. EBITDA fell 36% YoY to ₹388 crore in Q1. Its total gas sales volume for the quarter stood at 9.22 million metric standard cubic meters per day (mmscmd), compared to 8.86 mmscmd in Q1 FY23.

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Ambuja-ACC is frontrunner to acquire Sanghi Cements

Adani Group’s Ambuja-ACC has emerged as the frontrunner to acquire Sanghi Cements after deal negotiations moved forward over the past week. The group has come close to the expected enterprise value of ₹6000 crore that Sanghi Cement’s promoters have demanded as consideration for the sale of the company.

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Sula Vineyards receives excise duty notice of ₹116 crore from Maharashtra govt

Sula Vineyards Ltd (SVL) has received an excise duty notice of ₹116 crore from the Maharashtra excise department. This comes after the minister (State Excise Revenue) vacated the interim stay granted on the demand notice issued by the Nashik collector for recovery of excise duty from SVL. Sula Vineyards has been recognised as the market leader across wine variants, including red, white, and sparkling wines.

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Ambuja Cements Q1 Results: Net profit rises 31% YoY to ₹1,135 crore

Ambuja Cements reported a 31% YoY rise in consolidated net profit to ₹1,135 crore for the quarter ended June (Q1 FY24). Its revenue from operations rose 9% YoY to ₹8,713 crore during the same period. The company’s EBITDA stood at ₹948.8 crore in Q1, up 38% YoY. Its total sales volume rose 23% YoY to ₹9.1 million tonnes (MT).

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Brookfield India REIT raises ₹2,305 crore via sale of units

Brookfield India Real Estate Trust has raised ₹2,305 crore by selling units to institutional investors on a private placement basis. The firm will mainly use this fund for the acquisition of two assets in Gurugram and Mumbai. The company has approved the allotment of 9.13 crore units to 64 successful eligible institutional investors at the issue price of ₹252.50 per unit.

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Market News Top 10 News

India’s Retail Inflation Eases to 5.66% – Top Indian Market Updates

Here are some of the major updates that could move the markets tomorrow:

Retail inflation eases to 5.66% in March

Retail inflation in India eased to a 16-month low of 5.66% in March 2023 from 6.75% in March 2022 as food inflation moderated on account of falling vegetable prices. The consumer food price index (CFPI) eased to 4.79%, down from 5.95% in February 2023 and 7.68% in March 2022. Rural inflation stood at 5.51%, while urban inflation stood at 5.89%. Retail inflation in India fell marginally but remained above RBI’s 6% upper tolerance band for the second straight month in February 2023.

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IIP data: India’s industrial output rises 5.6% in February

India’s industrial output, as measured by the Index of Industrial Production (IIP) rose 5.6% year-on-year (YoY) in Feb 2023. For the 11-month period from April 2022 to February 2023, industrial output registered a growth of 5.5%. The January IIP growth was revised to 5.2%. 

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TCS Q4 Results: Net profit rises 15% YoY to Rs 11,392 crore 

Tata Consultancy Services (TCS) reported a 16.9% YoY increase in revenue at Rs 59,162 crore while profit rose 14.76% YoY to Rs 11,392 crore in Q4 FY22. Both revenue and profit figures were below Street estimates. The order book for the quarter stood at $10 billion. The IT company’s board has announced a final dividend of Rs 24 per share.

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HDFC Bank signs agreement with Export-Import Bank of Korea for $300M credit line

HDFC Bank has signed a “Master Inter Bank Credit Agreement” with the Export-Import Bank of Korea for a $300 million line of credit. The pact was signed by the two entities at GIFT City in Gujarat. This agreement will help HDFC Bank raise foreign currency funds that it would extend to Korea-related businesses.

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Karnataka Bank authorised to collect direct, indirect taxes

Karnataka Bank has been authorised to collect direct and indirect taxes on behalf of the Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC). This authorisation is provided by the Reserve Bank of India. The RBI gave this authorisation on the recommendation from the Controller General of Accounts (CGA).

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Canara Bank, Bharat BillPay partner for cross-border bill payments

Canara Bank and NPCI Bharat BillPay Ltd (NBBL) have announced the launch of cross-border inward bill payment services for Indians based in Oman. NRIs can now leverage the robust platform offered by the Bharat Bill Payment System (BBPS) to make bill payments on behalf of their families through the Musandam Exchange. Canara Bank has become the first Indian public sector bank to offer inbound cross-border bill payments through BBPS.

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Puravankara achieves highest-ever annual and quarterly sales

Puravankara has achieved the highest-ever annual and quarterly sales of any financial year since its inception. The firm has clocked Rs 1,007 crore in sale value in Q4 and a total of Rs 3,107 crore for FY23. The company also recorded a 57% jump in customer collections from the real estate business to Rs 2,258 crore.

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RIL readies $2.4-3 billion InvIT for retail warehousing assets: Report

According to an ET report, Reliance Industries Ltd (RIL) has initiated a process that could see the group unlock value in the backend warehousing and related logistics assets of its retail business through an infrastructure investment trust (InvIT). Reliance Retail Ltd has already started laying the groundwork for the proposed InvIT of its warehousing assets. It registered a trust and Intelligent Supply Chain Infrastructure Trust with the Securities and Exchange Board of India (SEBI) at the end of February.

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BHEL signs MoU with NPCIL for nuclear power plants business

Nuclear Power Corporation of India Ltd (NPCIL) and Bharat Heavy Electricals Ltd (BHEL) entered into a Memorandum of Understanding (MoU) for collaboration for Pressurised Heavy Water Reactor (PHWR) technology-based Nuclear Power Plants. A pressurized heavy-water reactor (PHWR) is a nuclear reactor that uses heavy water (deuterium oxide D2O) as its coolant and neutron moderator.

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Sula Vineyards’ own brand sales volumes cross 1 million cases mark in FY23

Sula Vineyards Ltd said sales volume from its own brands crossed 1 million cases in FY23. Sales volumes in elite & premium wines went past the 5 lakh cases mark for the first time. On a provisional basis, Sula Vineyards said its net revenue for Q4 stood at Rs 104.3 crore from its own brands. For the financial year 2022-23 (FY23), net revenue from own brands stood at Rs 482.5 crore and Rs 45 crore from wine tourism. 

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Editorial

Sula Vineyards Ltd IPO: All You Need to Know

Here’s a special IPO for all you wine lovers out there! Popular winemaker Sula Vineyards Ltd has launched its initial public offering (IPO) today— Dec 12. In this article, we’ll dive into the company and its IPO.

Company Profile – Sula Vineyards Ltd

Sula Vineyards Ltd (SVL) is India’s largest wine producer and seller as of March 31, 2022 (FY22). It’s been a market leader (with >50% share) in our country’s wine industry in terms of volume and sales value since the financial year 2008-09. The company’s business can be classified into two:

  1. Production, distribution, and import of wines & spirits.
  2. Sale of services from its wine tourism venues, including vineyard resorts & tasting rooms.

Factsheet:

  • SVL distributes white, red, and sparkling wines under its flagship brand ‘SULA’. It also offers wines under the RASA, Dindori, The Source, Satori, Madera, and Dia brands. 
  • The company produces 56 different wine labels at four owned and two leased production facilities in Maharashtra and Karnataka. [These states offer subsidies for grape production and tax rebates on wine.]
  • The company leads the market in all four price segments: ‘Elite’ (₹950+), ‘Premium’ (₹700-950), ‘Economy’ (₹400-700), and ‘Popular’ (₹400). In FY22, it had a market share of nearly 61% in the ‘Elite’ and ‘Premium’ segments (in terms of sales value).
  • It has built the largest distribution network among Indian wine companies, with nearly 13,000 retail touchpoints! 
  • They have entered into long-term supply arrangements (of up to 12 years) with grape growers for 2,290 acres as of September 30, 2022.
  • SVL offers its services across 8,000 hotels, restaurants, and caterers.

Sula’s wines and vineyards have a huge fan following on social media!

About the IPO

Sula Vineyards Ltd’s public issue opens on December 12 and closes on Dec 14. The company has fixed ₹340-357 per share as the price band for the IPO.

The IPO is purely an offer for sale (OFS) of 2.69 crore equity shares by promoters and early investors, aggregating to ₹960.35 crore. Individual investors can bid for a minimum of 42 equity shares (1 lot) and in multiples of 42 shares thereafter. You will need a minimum of ₹14,994 (at the cut-off price) to apply for this IPO. The maximum number of shares a retail investor can apply is 546 equity shares (13 lots).

The primary objective of the IPO is to provide an exit strategy (or liquidity) for SVL’s promoters. The company aims to achieve the benefits of listing the equity shares on NSE and BSE. The total promoter holding in Sula Vineyards will decline from 28.44% to 27.33% post the IPO.

[The low promoter holding is quite concerning— could indicate that promoters may not have much faith in the company’s future prospects.]

Financial Performance

After posting a loss of ₹15.94 crore in FY20, Sula Vineyards turned profitable with healthy EBITDA margins over the next two years. Its revenue fell nearly 20% YoY in FY21 and increased by 8.6% YoY in FY22. Off-trade sales contributed 72.25% of SVL’s secondary sales during FY22, compared to 61.33% in FY20. SVL has been able to reduce its total borrowings from ₹368.24 crore in FY20 to ₹228.93 crore in FY22.

In the half-year period ended September 2022 (H1 FY23), profit jumped 577% YoY to ₹30.5 crore, and revenue rose 40.8% YoY to ₹224 crore.

Risk Factors

  • All companies operating in India’s alcohol industry are subject to strict licensing and excise regimes. SVL’s business and financial performance could be severely affected due to changes in regulations, tax laws, and legal uncertainties.
  • Any adverse climatic conditions may impact the quality of wine grapes (SVL’s key raw material). 
  • Consumers’ tastes and preferences may change, and they may not prefer wines in the future. SVL’s sales could decline if it fails to adapt to changing market trends and consumer spending patterns. The company may also not be able to maintain its competitive position in the alcohol/wine industry. 
  • The company benefits from high duties imposed on imports of international wines in India. These duties could be reduced or eliminated in the future, adversely impacting SVL’s wine business.
  • SVL depends heavily on its brand portfolio. The success of its business strategy depends on its ability to enhance brands.

IPO Details in a Nutshell

Sula Vineyards filed the Red Herring Prospectus (RHP) for its IPO on Dec 5. You can read it here. Out of the total offer, 50% is reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 35% for retail investors.

Ahead of the IPO, SVL raised ₹288.10 crore from anchor investors. The marquee investors include Abu Dhabi Investment Authority (ADIA), Goldman Sachs, Morgan Stanley, BNP Paribas Arbitrage, and Citigroup Global Markets Mauritius.

Conclusion

Let’s look at some facts: Of the ₹2.4 lakh crore alcoholic beverage market, wine only has a mere 1% share! The per capita consumption of wine in India is just 40 ml per year. Even then, Sula has been able to make its wines appealing to Indians, mostly millennials. They’re the pioneer of wine tourism in India. It launched the first wine tasting room in India, the first vineyard resort, the first wine music festival, and the first winery tours at its facility in Nashik! 

Going forward, SVL will continue to focus on its own brands over third-party brands that they import and distribute. It will leverage its distribution capability to launch new products under the ‘Elite’ and ‘Premium’ categories to increase revenue and market share in the Indian wine market.

SVL will be facing competition from listed peers such as United Spirits, Radico Khaitan, and United Breweries. Fratelli and Grover Zampa are two of Sula Vineyards’ unlisted domestic rivals.

The company has received some interest from investors in the grey market. SVL’s IPO shares are trading at a premium of ₹34 in the unofficial market. Before applying to this IPO, we will wait to see if the portion reserved for institutional investors gets oversubscribed. Do consider the risks associated with the company and come to your own conclusion.

What are your views on Sula Vineyards Ltd’s IPO? Will you apply for it? Let us know in the comments section of the marketfeed app!