Sula Vineyards Ltd

Dear Shareholders,

FY24 has been momentous for us as we mark the completion of 25 years of Sula. I am pleased to reflect on our journey and the significant strides we have made along the way. Revisiting our humble beginnings, it's incredible to see how far we've come. What started as a passionate endeavour to bring high-quality wine to India has transformed into a pioneering force in the Indian wine industry.

From the setup of our first vineyard in 1996 to becoming India's leading wine producer, our journey has been marked by a relentless pursuit of quality and a deep understanding of consumer preferences.

We persisted in our commitment to driving premiumisation and enhancing the quality of our wines—firmly positioning Sula as a leading name not just in India but on the global stage. We have consistently prioritised enriching our portfolio by curating authentic wines that cater to discerning consumers.

Our commitment to innovation has seen as we introduce new varietals and blends, pushing the boundaries of Indian winemaking.

Spotlight on our financial highlights

We achieved an all-time high Net Revenue of 616.4 Cr. growing at 10.7% YoY. We recorded our highest ever EBITDA at 183.6 Cr. growing 14.0%

YoY and highest ever PAT at 93.3 Cr. growing at 11% YoY.

FY24 has been a record year, especially in terms of improvements in our margins. We achieved our highest ever EBITDA margin at 30.2% from 29.1% last year. Our PAT margins stood at 15.3% this year.

Prudent financial management, as evidenced by our healthy debt-to- equity and net debt-to-EBITDA ratios, has fuelled this strong performance.

Our Return on Capital Employed (ROCE) stood at a robust 25.2% this year, growth of 221 bps over the last year; and I am glad to share that it is

among the highest in the Alcoholic Beverages industry. This demonstrates our commitment to consistently improve our financial metrics in tandem with our growth.

Spotlight on our business highlights

Our Own Brands have been the stars of the show, now accounting for over 87.8% of our revenue. Revenue from Own Brands was at INR 534.2 Cr. growing at 11.1% YoY. Our premiumization efforts have succeeded in raising our Elite and Premium wine share to an all-time high of 75.2%. Our Elite and Premium wines achieved a revenue growth of 15.5%, at INR 401.5 Cr. and we posted a volume growth of 13.4% for this category. Apart from our traditional markets of Maharashtra and Karnataka, we are particularly encouraged by high double-digit growth in non-traditional wine markets, such as Telangana, Rajasthan and CSD, placing us in a sweet spot for sustained success in the years to come.

To support the growth of our premium wines, we have expanded The Source range by adding a new wine, bringing the portfolio to six. We have launched The Source Pinot Noir, an elegant and refined wine, it is the finest expression of an Indian Pinot Noir and is sure to delight consumers. In the realm of new product development, we recently unveiled Sula in a Can, making our most popular wines more accessible. These cans are perfect for getting new audiences to try our wines and cater to the increasing demand for convenience and individual portions.

Our Wine Tourism business recorded a revenue of 54.7 Cr. a 21.7% growth YoY and continues to be one of the most visited vineyards in the world, and indubitably the place where most consumers taste their first glass of wine. This strong performance can be attributed to the growing number of visitors we host, which is second to none in the world today.

We have conducted over 2.5 Lac+ tastings this year, an impressive 42% growth over last year.

I recall how, when we opened the first winery tasting room in India in 2005, we started with a humble beginning of a small set of wine enthusiasts. Today,

I marvel at just how far we've come, now hosting over 4.3Lac + visitors to our vineyards. Looking ahead, we remain extremely bullish about the future of our Wine Tourism business.

In other developments, we have successfully acquired N D Wines within record time, showcasing our team's exceptional operational efficiency. This move presented us with an opportunity to strengthen our Wine Tourism business as well. The prime location of N D wines, just 45 kms from the Maharashtra-Gujarat border, makes it an ideal Wine Tourism destination. We also opened our 1st standalone tasting room outside our campus - Milestone Cellars by Sula. This marks beginning of many more to come.

Sustainability is a conscious choice at Sula

At Sula, sustainability is not a value, it is a commitment that we have been living every day since our inception. We are one of the most sustainable wine businesses worldwide. We're proud to be the only Asian winery to become a Gold member of the International Wineries for Climate Action (IWCA), a prestigious group of like-minded wineries globally.

Our efforts can be seen across our facilities as we generate ~4 million kWh of solar energy, conserve water through rainwater harvesting, reduce waste by using recyclable packaging, and cut down emissions by moving towards electric transportation. 59% of our energy needs are met by our solar PV installations. We are committed to achieving 75% renewable energy usage in the future. We have already begun laying the groundwork to make this vision a reality.

An exciting future beckons!

Looking ahead, we remain confident in our long-term prospects. Our focus remains to onboard more wine consumers, increase our reach, and expand our market penetration- bringing lakhs of Indian consumers into the wine- fold. Having already secured the No. 11 spot on the Top Wineries on Instagram list, we're just getting started. We were also recognised as a Great Place To Work? for the third consecutive year in a row, a strong testament to the people first culture of Sula.

This year's great harvest promises ample supply, especially for our Elite and Premium wines. Additionally, our recent product launches have garnered a positive consumer response.

The growing demand for our wines, booming wine tourism, and consumer preferences for our premium Indian wines point to a bright future for Sula!

Sula's journey is not just about wine; it's about building a legacy of passion, perseverance, and progress. The upcoming years promise even greater achievements as we continue to innovate, grow, and inspire.

Here's to raising a toast to our journey of 25 years and to many more fruitful vintages ahead!