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India’s Sula Vineyards announced a prominent increase in quarterly profit on Wednesday, driven by robust consumer demand for its more affordable wine options. This surge in demand comes despite weaker interest in its premium offerings, impacted by national elections and heatwaves during the period.
The country’s largest winemaker reported a consolidated net profit increase of 7% year-on-year, amounting to 146.3 million rupees ($1.7 million) for the quarter ending June 30. This marks a recovery from the previous quarter, where the company saw a decline in profit.
A significant portion of Sula’s sales, about 70%, is concentrated in the key states of Maharashtra and Karnataka. However, the company is expanding its presence in other regions, including Telangana and Rajasthan, where sales momentum has picked up.
Revenue for the quarter grew by more than 10% to 1.28 billion rupees, marking the second consecutive quarter of growth for Sula Vineyards. This growth was largely driven by a 24.4% increase in sales of its cheaper wine segment. Conversely, the elite and premium wine segment experienced a 7.4% decline in sales volume, though it still accounts for 71% of the company’s total revenue.
CEO Rajeev Samant attributed the challenges in the premium segment to restrictions on the alcohol beverage industry due to national elections, combined with the adverse effects of heatwaves during the quarter. These factors significantly impacted overall sales.
While Sula did not disclose the sales volume for its cheaper wine segment or the exact revenue figures for its premium segment, it did reveal that wine sales contribute approximately 88% to its net revenue. Meanwhile, the smaller wine tourism segment reported a 2.3% drop in revenue, as fewer visitors frequented the vineyards due to the extreme weather conditions.
In a forward-looking statement, Sula Vineyards mentioned plans to expand its wine tourism business. The company announced the launch of a resort at York Winery, located at its Nashik property in Maharashtra, slated to open in 2026.