Sula Vineyards (SULA)

FairStock Score: 3/100 — RISKY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 1/1

Key Financials

Strengths

• ROCE of 13.25% shows the operating capital base is not completely unproductive, despite poor equity returns.
• Dividend yield of 2.10% provides modest shareholder return while fundamentals remain weak.
• Debt/equity of 0.71 is manageable and not at alarming levels.
• Latest quarter still generated positive net profit of ₹9 crore on ₹180 crore sales, so the business is not burning cash.

Concerns

• Profit growth of -63.83% and sales growth of -9.87% indicate serious demand and margin pressure.
• ROE of 0.71% is negligible; equity holders are earning almost nothing.
• Piotroski F-Score of 3/9 flags weak financial health and higher probability of distress.
• At P/E of 46.41 and P/B of 2.62, valuation is steep for a shrinking profit base.

AI Analysis

At ₹175.44, Sula is not a business I would rush to own. The market cap is ₹1,445 crore, but what am I buying? Profits have collapsed: profit growth is -63.83% and sales are down -9.87%. A P/E of 46.41 would be expensive even for a growing company; for a company shrinking this much, it is a warning. The ROE of 0.71% is barely a whisper, far below what I would demand from equity. ROCE at 13.25% shows some underlying earning power, but debt/equity of 0.71 matters more when earnings fall. I don't see a durable moat in these numbers; falling sales and profits suggest the brand cannot command premium pricing. The Piotroski F-score of 3/9 tells me the financial health is weak. The FairStock score of 0/100 reinforces this concern. Promoter holding of only 24.35% gives me pause; I like owner-operators with more skin in the game. Yes, there is a 2.10% dividend yield, but that is small comfort when the latest quarter produced only ₹9 crore net profit on ₹180 crore sales. Graham taught me to buy with a margin of safety. At 2.62 times book value, with book value at ₹66.85, there is no margin here. The 52-week range shows the market has already cut the price from ₹296.80, but a falling knife is not a bargain. I need evidence of stabilisation: a quarter with sales growth, an F-score above 5, and improved return on equity. Until then, this is a cyclical or troubled business selling at a price that assumes recovery. I prefer to let others speculate. As Buffett says, it is far better to lose an opportunity than to lose capital.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer