Recent Price Movements and Market Context
On the latest trading day, Sula Vineyards recorded a decline of 0.90%, underperforming the Sensex which moved down by 0.17%. This marks the fifth consecutive day of losses for the stock, accumulating a negative return of 3.75% over this period. The stock’s performance relative to its sector also shows underperformance, with a day’s lag of 0.38% compared to the beverages sector.
The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a persistent bearish trend. This technical positioning reflects the challenges faced by the company in regaining upward momentum in the market.
Performance Over Various Time Frames
Examining Sula Vineyards’ returns over multiple time horizons reveals a consistent pattern of underperformance. Over the past week, the stock has declined by 3.46%, while the Sensex has recorded a smaller fall of 0.48%. The one-month return shows a sharper drop of 15.02%, contrasting with the Sensex’s marginal decline of 0.31%.
Over a three-month period, the stock’s return stands at -26.83%, whereas the Sensex has gained 1.69%. The disparity becomes more pronounced over the one-year and year-to-date periods, with Sula Vineyards posting losses of 50.57% and 49.87% respectively, while the Sensex has delivered positive returns of 5.28% and 8.03% in the same intervals.
Longer-term data indicates that the stock has not generated returns over the past three, five, and ten years, contrasting sharply with the Sensex’s cumulative gains of 37.62%, 79.75%, and 230.78% respectively. This highlights the stock’s relative stagnation compared to the broader market’s growth trajectory.
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Financial Results and Profitability Trends
The company’s financial results have reflected a challenging environment. The profit before tax (PBT) for the quarter stood at ₹7.44 crore, representing a decline of 56.1% compared to the average of the previous four quarters. Correspondingly, the profit after tax (PAT) for the quarter was ₹6.02 crore, down by 58.1% relative to the prior four-quarter average.
Operating cash flow for the year was recorded at ₹64.03 crore, marking the lowest level in recent periods. Over the last five years, operating profit has shown a negative compound annual growth rate of 10.18%, indicating subdued growth in core earnings.
Valuation and Capital Efficiency
Sula Vineyards’ return on capital employed (ROCE) is reported at 9.4%, which is considered attractive within its sector. The enterprise value to capital employed ratio stands at 2.3, suggesting the stock is trading at a discount relative to its peers’ historical valuations. Despite this, the stock’s price performance and profit trends have not aligned favourably over the past year, with profits falling by 42.7% alongside a 50.57% decline in stock returns.
Shareholding and Market Position
Institutional investors hold a significant stake in Sula Vineyards, accounting for 22.06% of the shareholding. These investors typically possess greater resources and analytical capabilities to assess company fundamentals compared to retail investors. The stock’s market capitalisation grade is noted as 3, reflecting its relative size and liquidity in the market.
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Summary of Market Performance
The stock’s performance over the last year and beyond has been notably below par when compared to the broader market and its sector. While the Sensex has delivered positive returns across one, three, five, and ten-year periods, Sula Vineyards has not recorded gains over these intervals. The stock’s recent all-time low price of ₹207.75 underscores the extent of its decline.
Trading below all major moving averages and with consecutive days of negative returns, the stock’s current market position reflects a period of sustained pressure. The company’s financial metrics, including declining profits and operating cash flow, further illustrate the challenges faced in recent times.
Despite an attractive valuation on certain capital efficiency measures, the stock’s price and earnings trajectory have not aligned with broader market trends, resulting in a significant gap in performance relative to benchmarks.
Conclusion
Sula Vineyards’ stock reaching an all-time low is a significant event that highlights the company’s ongoing difficulties in the market. The data presents a clear picture of subdued financial results, extended periods of negative returns, and valuation metrics that contrast with the stock’s price performance. Investors and market participants observing this stock will note the divergence between its capital efficiency ratios and its market valuation, set against a backdrop of persistent declines in profitability and share price.
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