12 Dec Subscribe for long term to Sula Vineyards: ICICI Direct
ICICI Direct has come out with its report on Sula Vineyards. The research firm has recommended to “ Subscribe for long term” the ipo in its research report as on December 11, 2022.
Broker Research
December 12, 2022 / 12:14 PM IST
Uniparts India IPO
ICICI Direct IPO report on Sula Vineyards
Sula Vineyards is India’s largest wine producer and seller (52% market share in FY22). The company produces 56 different labels of wine at four owned and two leased production facilities in Maharashtra and Karnataka. Sula has the largest distribution network among wine companies in India (~13000 retail touchpoints in India). On-trade, off-trade, D2C contributed 73%, 23%, 4%, respectively, in FY22 net revenues • Own brands, third party brands, wine tourism, others contributed 84%, 8%, 8%, 1%, respectively, in FY22 net revenues.
Valuation and Outlook
The stock is a pure play on the wine sector, which currently sits on a low base (less than 1% of alcobev industry) but is expected to surpass industry growth due to higher acceptability, affordability, perceived health benefits, etc. We assign a rating of SUBSCRIBE with a long term horizon to the IPO as the industry is currently in a nascent stage and demand centres remain concentrated mainly in a few metros.
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