Ladies and gentlemen, good day, and welcome to the Sula Vineyards Limited Q4 FY24 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I'll now hand the conference over to Ms. Runjhun Jain from EY Investor Relations. Thank you, and over to you, Ms. Jain. Thank you, Michelle. Good afternoon, everyone, and we welcome you to Q4 and FY24 earnings call of Sula Vineyards Limited. To take us through the results and to answer your questions, we have with us the top management from Sula, represented by Mr. Rajeev Samant, Chief Executive Officer, Mr. Karan Vasani, Chief Operating Officer, and Mr. Abhishek Kapoor, the Chief Financial Officer. We'll start with a brief overview from the management, and then we will open the floor to Q&A. But before that, a disclaimer read: Numerous factors could cause actual results to differ from those in the forward-looking statements. New factors emerge from time to time, and it's not possible for the management to predict all of them, including the extent to which any combination of factors may impact the business or cause results to differ materially from those contained in any statement. Sula also undertakes no obligation to update any forward-looking statement to reflect developments that occur after the statement is made. Now I hand over to Rajeev. Thanks a lot, Runjhun. Good afternoon to all of you. I welcome you all to our Q4 and FY24 earnings conference call, and thanks to all of you for taking the time to join us this afternoon. We come to the end of another successful financial year. We grew by double digits in FY24 and once again had a record year in terms of margins. We are also thrilled to be celebrating our silver jubilee this year, marking 25 years since our first harvest, which happened back in 1999. We've come a really long way since then. The last 25 years have been tremendously fulfilling, and out of that, the last three or four years particularly have been, I would say, the most fulfilling and really have taken our company to a different level, including navigating the pandemic, completing our IPO, and now completing one year since our IPO. Since then, we've shown some tremendous results, both in our own brands as well as the wine tourism segments, our two most important lines of business. This is our eighth consecutive quarter of top-line growth. However, what I find most encouraging when we start looking into these numbers is the terrific growth that we are seeing in non-traditional wine markets beyond our most important markets of Maharashtra and Karnataka. That has really been the story of this financial year as well as of Q4. For example, states like Telangana and Rajasthan have shown particularly strong performance. Our CSD business is the strongest performer this year, with more than 50% growth, and it's become our biggest growth segment and shows no signs of slowing down. This diversification positions us really well for continued success in the future. One of the questions that we always face is: How are we doing with penetration in terms of wine consumption in markets, in non-metro markets and markets where we have not done traditionally really well, where we do 70% of our sales, which is Maharashtra and Karnataka, and this shows that this potential is alive and well. Having said that, Mumbai and Goa, two very important markets for us, Mumbai, of course, has traditionally been our most important markets, have been challenging this year in FY 2024, flat to negative growth. We do expect some softness in these two major markets to continue in FY 2025 as well. Backed by the double-digit revenue growth and improving profitability, I'm very happy to share that we've been improving our returns to stakeholders. In FY 2024, our ROCE is 25%, 25.2% to be exact, which is one of the highest in the Alcobev industry and just shows our strong focus on financial metrics as we grow. One of the big questions over the last couple of years has been the Maharashtra WIPS program, which is the VAT refund scheme, and I would like to just say a word here for some clarification. As you are all aware, the Maharashtra government recently revived the scheme, and we are very thankful to them for that. The scheme was revived for 8 years, 4 years, which are retrospective until FY24, and another 4 years after FY24 until the end of FY28. There is a little bit of a difference in the scheme for the prospective 4 years, as a cap has been imposed of INR 20 crore per unit as against no cap earlier. This does impact Sula out of all the wine companies. Though we currently have 3 units which qualify as per the definition for the VAT refund, we do expect some impact in FY25 of this cap, and possibly the total refund that we will receive will be slightly lower than the refund amount that we received in FY24. However, we are putting plans in place to bounce back in FY 2026 and beyond. And we have some good strong plans for this. Requires a little bit of, reshuffling of our thinking, but, we are well-placed to carry this out. Quick word on the acquisition of ND Wines, which we've just completed in record time. I want to thank our our team for having completed this acquisition from start to finish in, less than a couple of months, really speaking. So we've acquired one more winery, ND, which does constitute a separate unit in terms of the whole, WIPS mechanism, and that is going to help us in minimizing the impact of the lower refunds. We have been leasing this unit for a number of years, and now we have taken it under complete ownership. What is most exciting about this acquisition is the tremendous scope for wine tourism. When we look at acquisitions, we are always very... What is a real priority for us is the wine tourism potential for these acquisitions, and in the case of ND, it's a fantastic site. It's just about 45 km from the Maharashtra-Gujarat border, and already we have a small bottle shop there, and now we're gonna be, we've already begun the work of expanding this massively to create one more wine tourism destination. So we've been open to acquisition opportunities. This just highlights that, but we like to go selectively and strategically. Moving forward, I would like to highlight one slight change in our priorities, that we are not going to be necessarily limiting our potential opportunities for acquisitions to only wine. There are some very interesting and exciting opportunities even in the rest of alcobev, and we would be taking a look at that. Let's take our attention to wine tourism. This is a business where we are by far and away the leader. We've been the pioneers in this really exciting business. It is an extremely crucial pillar for us, and apart from the turnover, it's also an extremely profitable business. You know, it's the place where most people taste their first glass of wine, that makes it so exciting for us. It is our D2C business, so we can measure for ourselves and analyze for ourselves exactly what the customer preferences are, which is so important for a business like ours. Of course, it's very profitable because we are selling D2C, so we're doing away with the trade margins here, and that's why this is a crucial pillar for our growth moving forward. You would note that our wine tourism revenues grew by about 22% in FY24, so much faster than the overall business. We continue to be extremely bullish about the growth prospects ahead, and we see very strong double-digit growth ahead in FY25 and in the decade beyond. And we do have several exciting projects lined up for FY25. The first of which has already started, that is Milestone Cellars by Sula. What makes this so exciting is it's our first standalone tasting room to open outside one of our winery campuses. This is on the old Mumbai-Ahmedabad highway, very close to Nashik Airport. It's just five kilometers from Nashik Airport. Why that's so exciting is that Nashik Airport is seeing more and more flights. Happy to announce that on May first, we saw a new flight, daily flight from Delhi on IndiGo, direct to Nashik. Again, something that's very exciting for us. And then we have our tasting room just close by. So this is a milestone in more ways than one. It's our first tasting room outside our winery. We are also actively seeking out sites for more tasting rooms, and we hope to have more announcements, in that regard in the near future. The next project is at ND Wines, which, as I said already, has tremendous potential. Currently, there is a small 120 sq ft shop selling our wines. Now, we are going to be expanding that to about 3,500 sq ft of... For wine tourism, tasting room, bottle shop, restaurant, et cetera. So that's really exciting. And again, as I said, it's just, forty kilometers from the Gujarat highway, which just, gives it tremendous potential, and it's already well known by the tourist traffic on that road. So we already, sell a good amount of wine there just from that small bottle shop, and we aim to launch this project, open this 3,500 sq ft of wine tourism space within FY25 itself. In fact, we've set ourselves a deadline, for before December 2024. So again, something, very exciting coming up. The next project on the anvil is at our Domaine Sula in Karnataka, which has seen the biggest growth this year.... something like more than 50% revenue as well as footfall growth. It's just a 2.5-hour drive from Bengaluru, which makes it very exciting. We've got plenty of land there to expand, and so obviously we are gonna have a resort coming up there. But before that, we are also, at this point, already working on expanding the tourism facilities even further. We're gonna be expanding our tasting room, expanding the restaurant, and then begin work on a resort close to the winery there. So we hope to start operations at this resort, hopefully in FY 2026. There'll be more on that in future earnings calls. Finally, you're all aware that we own York Winery, just down the road from us. Until now, we've had a decent business with our tasting room and wine shop. Now, I have great news that we're gonna be opening a resort there. We've just signed on with a business partner for a 31-room resort, plus, for the first time, conference facilities, which we are currently lacking in our Source and beyond properties. This we are targeting to open in FY 2026. Work has already begun here, as on site, and that will take our total room count from the current 104 rooms to 134. So adding very nicely. So a lot of exciting news on the wine tourism front, and we do see this as one of the ways to introduce wine to so many people across the country. And now that we've taken this decision to move outside our boundaries, that's what we are gonna go for, in a big way. Quick talk about sustainability. You all know that at Sula, sustainability is a very key pillar. We are now a gold member of the International Wineries for Climate Action, and we have reached about 60% today of our energy needs we are getting from our own solar facilities at our wineries. We are adding more sustainability CapEx, so more solar. Just last year, the Maharashtra government has now vastly expanded the potential at a particular site. Instead of having a limit of 1 megawatt of solar, now we can go up to 5 megawatts of solar, so of course, we are taking advantage of that immediately. And we are targeting to go from 60%-70% of our energy coming from renewable by end of FY25. Why that is so important, even from a profitability, obviously, from an environment point of view, but from a profitability point of view, energy is one of our highest manufacturing costs, and this will allow us to bring down that cost. At the same time, we are very excited about battery storage. Last year, we have dipped our toes into this world with our first installation. It's been a great experience. And now we're gonna be doubling what we put in last year in terms of battery storage. And I do see in the not-so-distant future, that with renewable plus battery storage, we should be getting something like 80% of our energy, maybe within another year, at after the end of FY 2025. And then hopefully, we have a target to get to 100%, within five years. So, we have already put in place plans for that. Some thoughts on the outlook. We see some softness in Q1. However, we have some very strong hopes for the entire FY. In Q1, with the elections happening, the kind of restrictions that have been placed on alcobev are much, much harder than anything that we've seen in the past. So literally, you have situations where somebody is carrying away three bottles from a wine shop in Mumbai, they can be, you know, stopped and questioned about that. So that is creating some amount of struggle. Plus, we do have a scorching heat wave right now, and so Q1 is looking a little bit challenging. However, as we look forward, we have some great hopes for the year ahead. We've had a terrific harvest, our fourth excellent harvest in terms of quality and quantity, so absolutely no issues in terms of supplies of all our wines, especially the premium and elite. And ending with the premium and elite, I would like to highlight the fact that within the numbers, you'll find that premium and elite growth in Q4, as well as FY, has been in very strong double digits, around a 14% growth in Q4. I've always said that Sula is about premiumization. It's about our premium and elite wines. We are not fighting so hard in the economy and popular segments, given how much discounting that goes on in that and the lack of focus on quality. Our strong point is the fact that we have successfully created some of the strongest and most recognizable premium Alcobev brands in India. Especially, I want to highlight our Source brand, which has been the most successful premium Indian wine brand launch of the last decade, and continues to be a very strong performer. We've seen something like 25%+ growth in Source sales this year, and so that's where we're really doubling down. That's where we've put in the most new brands, our Source Pinot Noir, our Source Moscato. These are new wines, which you'll be seeing more and more on the shelves soon, and already consumers loving it. With the fact that India still has the lowest per capita consumption of wine in the world, so there's a huge runway ahead, and Sula is firmly in the driver's seat. In fact, we have gained market share in terms of premium wine. I'm very optimistic for the road ahead. Thank you. Sir, should we open the floor for the Q&A session? No, I would like to call on our CFO, Abhishek Kapoor, to say a few words, followed by our COO, Karan Vasani. Thank you, Rajeev. Good afternoon, everyone. As Rajeev has elaborated on our business performance, including some key initiatives being undertaken, now I shall dwell upon our financial numbers during quarter four and full year. First, talking of our operating revenue numbers, we registered a 9.8% growth for quarter four, led by a strong growth in our elite and premium portfolio, as well as wine tourism business. For FY24, we clocked a revenue of INR 608 crore, up 10% over last year. This growth trajectory is a testament to the strength of our brand portfolio and the effectiveness of our distribution strategies. It may please be noted that the other income line item includes unwinding of the fair value element of the WIPS incentive scheme. In quarter four, this unwinding has been accelerated due to the receipt of INR 87 crore of WIPS incentive. Please note that this unwinding is more of operating nature, as WIPS on its original recognition is discounted, as expected realization is beyond 12 months period. In quarter four of 2024, we registered an 8% volume growth and 9% value growth in our own brands compared to the same period last year. Our elite and premium brands witnessed 14% value growth, as already mentioned by Rajeev. On a full year basis, our brand's volume growth stood at 7%, with 11% value growth. Elite and premium value growth for the full year stood at 15.5%. This is very much in line with our focus on premiumization. Our wine tourism business experienced remarkable year-on-year growth of 31% in quarter four. This expansion underscores the increasing popularity of our wine tourism offerings and reflects positively on our strategic investments in this segment. For FY 2024, growth in wine tourism stands at 21%, with non-wine revenues reaching at INR 55 crore. Share of wine tourism business in our overall revenues stands at 9%, considering non-wine revenue only. Turning to the financial metrics, our gross margin for quarter four stood at 74%, reflecting consistent profitability in our operations. Our Q4 EBITDA grew by 5%, with FY 2024 growing by 14% to reach INR 183.6 crore. Quarter four EBITDA margin of 25.3% was 114 basis points lower year-over-year, due to higher mix of revenue from geographies other than Maharashtra and also a higher share of CSD revenues. This is in line with what Rajeev has been mentioning, that we would like to invest back in business and we would also be focusing on driving the wine consumption in geographies outside of Maharashtra and Karnataka. EBITDA margin of FY24 is 108 basis points higher YOY at 30.2%, which is our all-time high full year EBITDA margin. Our outstanding WIPS balance as at 31 March 2023 was INR 113.7 crore, with INR 47 crore accrued during FY24, taking the total WIPS receivable on our balance sheet to INR 160.7 crore till 31 March 2024. We have received INR 87 crore WIPS payment from Maharashtra government in the month of March, on 31 March 2024 in fact, and currently our outstanding WIPS as on 31 March 2024 stands at INR 73 crore. We remain positive to realize the balance amount in FY25. Our profit after tax for FY24 amounted to INR 93.3 crore, which is 11% higher YOY. Our tax for Q4 saw a decline of 4.9% year-on-year, led by higher interest and depreciation costs. We have done significant CapEx in the last two financial years, resulting in higher depreciation charge. This is in our belief in investing into the business for a continual growth going forward. Our average borrowing for current year stood higher versus last year by around INR 45 crore, as this payout happened on March 31 and could not be utilized for the working capital needs during the year. Our prudent financial management is evident in our debt matrix, with our debt-to-equity ratio of 0.54 times and our net debt to our EBITDA ratio of 1.1 times, reflecting a healthy balance sheet. We recorded a ROCE improvement of 220 basis points to reach 25.3%. This reflects effective utilization of our capital. Our EPS has grown 8.5% to end at INR 11.06 per share. Considering the expansion potential in our wine tourism and other inorganic expansion opportunities, company's board has recommended final dividend of INR 4.5 per share, subject to shareholders' approval. This takes the full year dividend to INR 8.50 per share, almost at the same level as last year. As we look ahead, we remain focused on driving sustainable growth, enhancing operational efficiency and delivering long-term value to our stakeholders. I would now request our COO, Karan Vasani, to focus more, to give you, more insight into our operating initiatives. Thank you, Abhishek, and thank you, Rajeev. Good afternoon, everyone. I'll start with giving you a brief overview of the just completed 2024 grape harvest. Pleased to report that it was an extremely successful harvest. Overall, grapes crushed were up 1%. Within this, the all-important wine grapes, which are used for elite and premium wines, was up 11%, with table grapes, which are used for the cheaper wines, being down 29%. This divergence between the two reflects that we are becoming more and more an elite and premium company, and hence the share of wine grapes in our total grapes continues to grow up. Within wine grapes, white wine grapes were up and more than red wine grapes. Red wine grapes were up 7% and white wine grapes were up 19%. We are particularly pleased to note the increase in white wine grapes of 19%, because when we parallel it to our sales, the sparkling wines, which are the category that use these white wine grapes, their sales volume in FY 2024 was up 24%. Also, we launched a couple of years ago, The Source Moscato, which has been an extremely successful launch. Happy to report that sales of the Moscato were up 160% in volume in FY 2024, and we expect this strong growth to continue in future years. Moscato grapes crushed were also up in line at 67%, enabling us to launch this wine in far more states. Overall, if I turn to a little bit of the brand mix, The Source, which Rajeev touched on earlier, which we launched about six years ago, continues to be the most exciting new wine series launched in the country in the last five years. Volumes of The Source wines were up 44% in FY 2024, far outpacing the overall company's volume growth. We will also be taking The Source series national. Now that we have ample availability, we will be launching The Source in up to 10 more states with 30 listings in these states. Rasa volumes as well were up a very healthy 18%, and we continue to premiumize the business more and more with the expansion of The Source and Rasa. As our focus turns to taking growth of wine out of the non-traditional wine markets, we are investing in our sales team. The headcount of our sales team will be growing in the region of 8%-10%, and I'm happy to report that almost 80% of this increase is going to be coming from Tier Two and smaller cities as we look to build a broad base for wine consumption. In terms of cans, which was something that we launched in the fourth quarter, that has been met with a good response, and we have ambitious growth plans for cans. We will be introducing cans in five new states in this financial year, and I would like to assure all on this call that the quality in the cans is as good, equivalent to, the same as the quality in the bottles. So when consumers are buying the cans, they can rest assured that they're getting their favorite Sula wines exactly as they should be getting it. Moving to the winery side of things, in some good news, in FY25, we are expecting a 3% decline in packaging material cost per case, which bodes well for margins going forward. In FY24, with some of the geopolitical issues, we had seen a 4%-5% increase in packaging material costs, and that is now moderating, coming down by about 3%. Capacity utilization at the end of the financial year stood at around 85%. And we will be expanding our capacity by about 1 million liters in time for the 2025 grape harvest, which represents a 6% increase in capacity. Up until now, we have had only capacity really for, you know, one sort of capacity dedicated, which can all make elite and premium wines. Now, for the first time, we will be developing and putting in place a low-cost cellar specifically for the cheaper wines, and this will come in at a capital cost of INR 80 per liter, as against our earlier capacity additions that have been at INR 120 per liter. We continue to invest substantially, as Rajeev mentioned, in solar, with about INR 10 crore of next year's capital expenditure budget of 60-ish crore being in solar. And just to add a little bit more color as to how significant solar is, even from a financial point of view, in FY 2024, we generated about 5 lakh units from solar. If we didn't have this solar, our electricity bill would have been higher by INR 6 crore, which would have been a 1% lower EBITDA margin. So for us, it's clear sustainability and investment in renewable is the right thing to do, both from an environmental and financial point of view, and is an area we will continue to invest in. So with that, I'm happy to hand the call back, and open up for Q&A. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aditya Soman from CLSA. Please go ahead. Mr. Soman, I have unmuted your line. Kindly proceed. Mr. Soman? As the current participant is not answering, we will move on to the next question, which is from the line of Jaykumar Doshi from Kotak. Please go ahead. Hi, Rajeev. My question is regarding your opening comments. You mentioned that you're looking at M&A opportunities outside of wine also. So what other categories within Alcobev, you know, interests you? And what will be the ticket size, you know, typically that you'd be looking at? And finally, how would you... You know, if you come across something, how would you fund it? Hi, Jay. So, look, I can't give you too much more detail on that. I would just like to say that, you know, until now, we've always been guiding that, we are only moving forward, only going to be, interested in wine. However, so many exciting opportunities, small, craft producers come our way, who are so, you know, energized by our story, and they see the synergies that, we do get some very interesting offers constantly. So we have decided that now we are going to, open our minds a bit and take a look at this. That's about all that I can say right now. Thanks. Sure. Thank you so much. Thank you. The next question is from the line of Sudarshan Padmanabhan from JM Financial PMS. Please go ahead. Yeah, thanks for taking my question. My question is more on the wine tourism. I mean, glad to see the growth in the last few years. You know, now that we have made acquisitions and investments here, one, as in of scale, because, I mean, while it is 9% of sales, it's still about INR 50 billion opportunity, right? In the next 3-4 years, strategically, where do you see this business both in terms of scale as well as in terms, you know, as a percentage of our sales? Thanks for that, Sudarshan. So you know, 9%, first, let me start off by saying the number that you are referring to is as it is reported in our numbers. If you were to actually include the wine that is sold at our hospitality, that number would be closer from about INR 95-100 crores and looking more like 15% of revenue overall. We do expect the core wine, the wine tourism business, to grow faster. We are going to be making significant investments in wine tourism, with some of which Rajeev already outlined, with the expansion of hospitality at ND, the addition of the rooms at York. And we see wine tourism and our wine business are, for us, it's almost one and the same. You know, we are now through the wine tourism business, taking wine more and more closer to our consumers. We just opened our first tasting room outside our premises in Milestone Cellars, and there will be more action on this space and more touch points to our consumers, closer to our consumers. So stay tuned on that. I would also like to add something here. You know, going back to Jay's previous question, I want to point out that Sula has built a terrific national distribution. We are today present in every single state where Alcobev is allowed. This is something that is very difficult to create from scratch. And you have boutique producers, let's say, spirits producers in Goa, et cetera, who have created great products, terrific taste, terrific packaging, quality, very quality-focused. But it is so difficult for a small craft producer today to find distribution in even one or two states, let alone nationally. So that is something that we can definitely leverage. Remember that we have had some experience in the past in this. In the past, in our imported segment, we have represented Beluga Vodka, Rémy Cointreau, Rémy Martin Cognac, Asahi Beer. So we know a thing or two about these categories. And, you know, things have really changed in India with such fantastic local products. And so that is just gives a little bit more color to my answer. Any specific scale that you target for wine tourism? I mean, in the next 2-3 years? You know, the word craft is a word that is used a lot these days, and quite frankly, you know, we are right now talking about craft, and it's too early to talk about the next two, three years. Thanks. Sure. Yeah. My next question is, you know, on the cash flow. While I think it's, you know, heartening to see that we have, you know, increased the dividend, you know, payout, given that there is so much opportunities ahead and, you know, I'm sure that all the investments that you've done will also help us to generate more cash. Last year we talked close to about INR 80 or close up around that as dividend, which is another 40% previous year. Now, going forward, what do you think would be the right mixture, you know, in terms of, you know, how your cash is going to be, you know, distributed both, I mean, you know, diverted towards your growth as well as well? Sure, Suveshan. So I'll take this question. See, in terms of the cash flows, till the time we had not received the WIPS incentive payout from the government, of course, there was a challenge situation on the cash front. But of course, with this money coming in and, you know, the clarity coming in from the perspective of the continuation of the scheme, that challenge has completely got removed now. In terms of our distribution of dividend, we have maintained this year's dividend almost at the same level as last full year's dividend. That is keeping in mind that we are conserving cash for exactly the opportunities of expansion, as well as which includes inorganic expansion. Go forward, we are going to continue investing into the business. As you have seen in the past trajectory also, close to INR 50-60 crore every year, we are investing into the business. That is considering the future growth potential, both on our wine sales, as well as our wine tourism business. Sure, thanks a lot. I'll jump in. Thank you. The next question is from the line of Vinamra Hirawat from JM Financial. Please go ahead. Hi, sir. Am I audible? Yes, sir, you're audible. So, I want to start off by saying, you know, I'm happy with the volume growth in Q4, you're on your premium and elite, that's where the focus is. But due to low growth in economy, you know, the top line number is growing a little slower. We want to know two things. Should we expect at least low single-digit growth in the economy segment? And secondly, is the 15% growth in consolidated volumes, is that guidance still intact for the next two years? Sure. So, we believe that this growth rate of elite and premium absolutely is sustainable. That's where our focus is. And within, elite and premium, of course, elite with The Source and Rasa growing much, much faster, good for margins. On the economy side, yes, we do expect volume growth there to be in the range of 5%-6% or, you know, mid-single digits. Mid-single digits, you can say. And we do see this as a segment that is sort of driven by high discounting and becoming a race to the bottom, and that's one segment in which we have, you know, that's not a game we want to play. Okay. So I take that as the 15%, you know, long-term volume growth guidance is still intact, right? Yes. Okay, perfect. So, second question, you know, what are, what are the after effects of the high S&D spend last quarter? In the Q3 call, you mentioned you've gained market share in all the major markets, that you have done the spend through the strategy. And, are we expecting some faster growth in these areas, maybe with a lag? And what are some, you know, other after effects of the aggressive S&D in Q3? On the S&D front, S&Ds, yes, they were elevated in Q3, and they continued to remain elevated till sort of mid-Q4, after which we have, as we had directed, started moderating the S&Ds. We have gained market share, we have captured market share in new institutions, particularly across the country, which remains a focus. We were, you know, we responded to the competition, and, we feel we are at a good place now with S&D at a balance of profitability and growth. But any long-term impacts, any long-term benefits you're getting, you know, in term, in the growth front from the S&D expenditure that you did, half of this quarter in Q3? The benefit was, you know, capturing market share and growing market share, and we expect to maintain that market share now. Okay, got it. Just finally, other expenses, you know, they've increased by around 30% year-on-year and quarterly. Just wondering what, what drove this? Sure, I'll answer this question. There were a couple of one-offs in that. One was a sort of demurrage charges, which we had to pay in a couple of our corporate markets, and another was one security deposit, which we had to take a write-off. These were one-offs and which were quite substantial to the extent that if we were to back these out, our EBITDA margin would have been better by 190 basis points. Got it. That's it from me. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Aditya Soman from CLSA. Please go ahead. Hi, yeah, good evening. So two questions. Firstly, in terms, you indicated earlier that in terms of the WIPS subsidy, there might be a shortfall for fiscal 25. So can you just give us a little more in terms of numbers of how much that shortfall is likely to be? And, what gives you confidence that that will get over in fiscal 26? And the second question is, on the earlier question, I mean, on the earlier question, I think you indicated that there was demurrage in one that led to operations in states that led to higher other expenses. But, is this a one-off, or is it likely to happen as you expand your revenues in these states? So those are the two questions for me. Thank you. Sure. So I will take the first one, and Abhishek will answer your second question. On the WIPS front, yes, we will see a little bit of a decline in our WIPS income in FY25. The way the policy of per unit is, it basically says that it's gonna be INR 20 crore per unit, and you can capture this at each unit when you begin bottling and dispatch from your units. We are in the process of setting all of that up. Bottling and dispatches from York will begin in Q1 and from ND in Q2. So this sort of, timing-wise, it means that last year, at a gross level, pre-fair valuation, we had around INR 56 crore of WIPS. We expect that to capture somewhere around 83%-85% of what we got last year in FY25. And as we grow in FY26, given that the bottling will already be ongoing at these units, we will capture the full extent to what we are owed. So I hope that answers your question, and I'll hand over to Abhishek for the second part. As I mentioned earlier, on the other expense, these two elements, which is the security write-off and the demurrage, were one-off. These are not the ones which we had seen in the previous quarters, and it's not something which we look forward to in the coming times as well. Okay, I understand. That's very clear. Thank you. Thank you. The next question is from the line of Naman Shah from Monarch Networth Capital. Please go ahead. Hi, sir. Congratulations on the good set of numbers. So just wanted to understand, how do you see the overall wine market, and what would be our strategy in... to increase wine consumption in the country? Sure, so I'll take this one. We remain very, very bullish on the long-term wine consumption. As Rajeev was mentioning in his opening remarks, we have one of the lowest per capita consumption, and we see that continue to grow steadily in the future. This is a business that is really not fundamentally amenable to a quarter-on-quarter growth, with lot of restrictions, and now Q1, we're going to have elections, which is going to see some softness as a result. But we remain focused for the long term. As I was saying, we are increasing our sales team's headcount, and most of that increase is coming from smaller cities, and we expect these investments in our sales team, with further investments in marketing, activations, and promotion of wine as a category, to pay rich dividends in the future. What would be the drivers going forward? So the key driver is gonna be that the growth of wine is gonna become much more broad-based, and we are investing in that, right? So, in quarter four itself, I mean, one of the metrics when we look at internally, which we're happy with, is the share of Maharashtra and Karnataka in our overall sales declined by 300 basis points. It was 63% in quarter four last year, coming down to 60% in quarter four this year, and other markets growing faster. So the joy of wine, if I may say, continues to spread to other parts of the country, which have not traditionally been wine drinking markets. Thank you. We'll take the next question from the line of Pramod Dangi from Unifi Investment Management LLP. Please, please go ahead. Yeah. Hi, thanks, and congratulations to Rajeev and the entire team for the, you know, continuous improvement in the elite and premium. The two questions, one is, in the Q3, we have said that there was some pricing pressure in the economic segment, which impacted our revenue in Q3. And, Rajeev, you, in your opening remarks, said that Maharashtra and Goa continue to see some challenges. So if you can elaborate on those parts, like where we are in the pricing pressure and what kind of challenges, and how we are seeing that in the Mumbai or Goa, in the entire Maharashtra region? Sure. So I'll take this one again. You know, just a correction, it was Mumbai and Goa specifically where we see the softness. FY24 was a great year for Pune, rest of Maharashtra, Nashik, the other parts of the state. The island city of Bombay continues to be a bit of a challenge for various structural reasons. Many excise licenses are moving out of Bombay into other parts. There has been no increase in full-spectrum licenses, and more and more people are, you know, moving to Thane or the other parts of the MMR region. So growth is moving to those parts. Goa was just a short-term issue, and we believe that has now been resolved and looks set for a good FY25. Okay, okay. Then secondly, on the inventory side, if I'm looking at the balance sheet, you know, there's a huge jump in the receivables, trade receivables from INR 115 crore to INR 170 crore, while the inventory is up only INR 180 crore to INR 198 crore, 10% jump in inventory, but receivables are up significantly. Any light on that? And on inventory, since we, you know, pile up our grapes in the month of February, March, April, how one should see the inventory level and, you know, our preparation for the next season? Sir, I'll take this question. I think you have asked about two things. One is in terms of, increase in the receivables, and the second part is in terms of increase in inventories. I'll answer your first question in terms of increase in receivables. See, that is largely on account of, the slowdown in, payouts being made by certain corporation markets, particularly Telangana. So, that's where, some of, the, collections are outstanding, and it's kind of, impacting our receivables balance as on thirty-first of March. In addition to that, our shares, to the Canteen Stores Department, which is the CSD, the Defense Department, that has increased, which has got a higher credit, days versus our other distribution markets. So these two key reasons have led to the, you know, receivables being higher as on thirty-first March versus last year. Answering on your second part, which is where inventories are higher, that is on account of a very good harvest, which, Rajeev and Karan, they mentioned in their, speech earlier. So that has led to this inventory being higher, but this bodes well for us in terms of having certain surplus inventories, wherein we will be able to cater to the markets much better. Karan, in case you want to- Yes. You know, I'll just add a little bit more detail on the inventory side. You know, as we become more and more of an elite and premium company, the requirement of inventory goes up. Table grapes, you can crush and have a wine out in the market in 1-2 months. For wines like our flagship Rasa Cabernet, from the time you crush the grapes to you release the wine, it's about 1.5 years of aging that it has to go through. While that being said, we take cognizance that the inventory is high, and I think the very fact that the total grape harvest was up only 1% in quantity will mean that this number will see a decline moving forward. Thank you. We'll take the next question from the line of Alisha Mahawla from Envision Capital. Please go ahead. Hi, good afternoon, good evening. Thank you for the opportunity. Just a clarification, I think in the opening comments, you said that Mumbai and Karnataka were challenging, which is so the earlier parts in what you have mentioned was Mumbai and Goa is challenging, of which Goa has resolved and, Mumbai continues to struggle. Is this correct, or is there some challenge in the Karnataka market also? I'm going to say something about Goa. You know, Goa is not necessarily resolved. Tourism in Goa, your high-end tourism, high-end tourist arrivals, has been hit very hard over the last last season and even going back. So we saw spectacular growth in Goa a couple years back. Coming out of COVID, the Indian traveler didn't have that many choices of where to go, and Goa became the magnet destination for everyone coming out of tourism. It had a couple of real boom years and boom seasons. Now, that scenario has changed. Today, Indian travelers are being welcomed to Southeast Asia, with, you know, visa-free welcomes. And these countries are extending. In fact, every day we're reading about some country or the other extending. So a lot of our consumers who would naturally, in the past have traveled to Goa, are more and more going to Sri Lanka, Thailand, Vietnam, et cetera, places like that. So, I'm not sure that the softness in Goa is yet, at a close. So I just want to clarify this. I don't, I don't want anyone to think that we think that, Goa is just gonna miraculously bounce back. Karnataka, is, looking, appreciably better than these two. So it's really what we're talking about is, are Mumbai and, Goa. In light of that, we were mentioning that we're targeting 15% volume growth. This year, we've done 7%, but that is also because the economy segment has grown at a slower clip, and that is by choice, and we expect this to continue as the portfolio shifts to elite and premium. But with some of our larger key markets also witnessing sluggishness and with Q1 being weak because of elections, how achievable is this 15% volume growth on full year basis? You know, I would like to clarify here that we are not talking about 15% volume growth overall. Karan did mention that we were looking at 15% growth in elite and premium. You know, I would say that we are looking at, yes, strong double-digit growth in elite and premium. We also mentioned that we're looking at single-digit growth in economy and popular. So when you take those two together, you're not looking at 15% volume. Thank you. The next question is from the line of Narayanan from FinTrack Research. Please go ahead. Mr. Narayanan- Yeah, my question's been answered. Thank you. It goes under one of... It's fine. The next question is from the line of Farhan from JM Financial. Please go ahead. Hi, I had a question about realizations. Hello? Yes, we can hear you. Please proceed. Should we expect further reduction in realizations in premium and the elite segment? Because I noticed in Q4, they reduced as value growth was lower than the volume. So Farhan, I'll take this question. So what you witnessed, what you're referring to, in terms of our volume growth, higher than the value growth on elite and premium, that is largely due to a mix between elite and premium. Our trend has been where elite was outgrowing premium. For Q4, there has been a bit of a change, where premium has grown ahead of elite, and due to that mix change, the value growth was behind the volume growth for Q4. But on a full year basis, if you see, the trend continues. Our value growth is higher than the volume growth, driven by the mix of elites. Okay, thank you. I have another question: What% of the sales is from Goa? Goa would be our fourth or fifth largest market, having a market share of... Just give us a second. Okay, so I'll just take this. Goa for us is around 4%. Okay. Thank you, sir. The next question is from the line of Jay Shah from Ohm Portfolio Equity Research. Please go ahead. Hi, thanks for the opportunity. Rajeev, my question is on overall top line growth. I'm not talking for next year, but say, over 3-5 years. Is it possible to have top line growth of 15%, which somebody else also asked, though, you know, in connection with just FY25? And here the issue is that 15% top line growth has to take into account the fact that your elite, elite is growing faster, but the economy is not. And secondly, is this growth also dependent on the grape harvesting growth that you would need to ensure your quality? We have always guided towards double-digit growth. Sorry, again, I'm going to clarify. There was a statement about 15%, growth in terms of elite and premium, but actually, when you take it on an, as a blended growth, we are, we are not at this point, guiding towards a 15% growth overall for the next two or three years. We are, we're expecting something bit short of that, though we definitely have double-digit growth, in mind. In terms of the grapes, absolutely no issues here because, we are, you know, the grape supply, is looking very robust. This year we have enough wine to take care of the next, 18 months of supply, so we don't see this, as an issue, at all. If anything, on the wine grape side, we have a little bit of excess, but remember that that is our strategy, that we like to have a little bit of excess, you can say, or a little bit of buffer, just in case of a bad year happening, which can easily happen in our industry, in the case of wine. So on that, with that, at this point, we're sitting on a very good supply of wine grapes and of premium and elite wine. Thank you. My second question is related to margins. Now, as you see CSD mix going up, is there a concern on the margins? I'm not sure, but I thought in one of the media interviews maybe today, you seemed to indicate that current margins are at peak and sustainable margins may be lower. So I'll take this question. See, Rajeev has been mentioning, as you would have noticed, that definitely these margins are not sustainable, and you will actually see a bit of a correction in that. And that is largely because we have been investing in the business, and as we are expanding in the geographies beyond Maharashtra and Karnataka, definitely we are going to see margins getting normalized. But that definitely does not mean that, you know, there is going to be a very significant impact. Having said that, we see that in the overall alcohol space, the margins are pretty healthy and we look forward to, you know, kind of focusing on our profitability very, very clearly. Thank you. The next question is from the line of Prateek Mody from KCP Financial Management. Please go ahead. Yeah, thank you. So this is just an extended question on the... Can you just help us understand what is the percentage of revenue from Maharashtra and non-Maharashtra state? Sure. Maharashtra accounts for around 49%. Let me just validate the figure. Sorry, Maharashtra is 52% of our domestic wine revenue in FY24. Okay. And what are the margins? And the margins remains the same in Maharashtra as well as the non-Maharashtra state, or it's different? How it is? So I'll take this. See, considering that there is this incentive in Maharashtra, considering that, yes, the margins in Maharashtra are higher versus any other markets, if you back that off, then definitely the margins are a lot more comparable between the two segments, which is Maharashtra and the non-Maharashtra markets. Can you just help me and throw some light on how the business will grow in the non-Maharashtra state? What is the strategy over there? Yeah. So, we definitely see the non-Maharashtra geography seeing a much higher growth versus Maharashtra. As Karan just mentioned, that there is already a higher share in Maharashtra, and we see a lot more coming in from the non Maharashtra geographies in the times coming forward. The participant has left the queue. Okay. Ladies and gentlemen, due to time constraint, that was the last question for today. Thank you, members of the management. On behalf of Sula Vineyards Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.