As Quant Mutual Fund picked up a 0.66% stake in India’s largest wine producer, Sula Vineyards shares gained shares.

Quant Mutual Funds purchased additional 5 lakh shares, raising its stake to 3.1% at an average price of Rs 471 per unit.

The stock was up 1.67% on the NSE at Rs 477.45 at 11:23 am.

In 2009, the Maharashtra government started a Wine Industry Promotion Scheme (WIPS) for subsidies for industrial promotion. Almost 80% of Value Added Tax on wine sales is refunded under this subsidy. For Sula, the WIPS subsidy of the VAT refund accounted for 28% of its earnings before interest, taxes, depreciation, and amortisation (EBITDA) in FY23.

Sula Vineyards’ revenue for FY23 rose 21% over the previous year to Rs 519.8 crore, and net profit rose 61% during the same period. Sula’s operating margin plunged 378 bps to 30.30%.

The share price plunged 44.62% from the year beginning. It touched a 52-week high of Rs 490 and a 52-week low of Rs 305.

Kotak estimates an average revenue growth rate of 135% during FY24-26. The domestic broking firm anticipates volumes to record a CAGR of 10% in its own brands.