(Reuters) -India’s Sula Vineyards reported a 58% slump in quarterly profit on Monday, hurt by sales disruption in the southern state of Telangana – the winemaker’s third largest market.
Liquor stores in Telangana have not been restocking ahead of the expiry of the current licenses in November, Sula said. The license auction process is ongoing, which the company expects will drive “a good recovery” towards the fourth quarter of the current fiscal year.
Consolidated net profit slumped to 60.2 million rupees ($684,908.13) for the second quarter ended September 30, compared to 144.8 million rupees a year earlier.
Revenue from Sula’s “own brands” segment, which houses its Dindori and eponymous wines and makes up roughly 90% of revenue, declined nearly 3%, the company said.
“Own brands’ performance was subdued, primarily due to a short-term … disruption in Telangana,” CEO Rajeev Samant said in a statement.
Excluding Telangana, however, the “own brands” segment posted revenue growth in the low single-digit percentage range, becoming the latest consumer goods maker to show signs of sales revival in urban India after a prolonged lull.
Total revenue fell 1% to 1.4 billion rupees.
Expenses rose about 7%, with core earnings margin shrinking 557 basis points to 18.2%.
($1 = 87.8950 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai and Ananta Agarwal in Bengaluru; Editing by Eileen Soreng)
