Sula Vineyards shares dropped 5% on Thursday, marking the largest single-day fall for the wine stock since August 2023. This decline followed the company’s earnings report for the quarter.

What Happened: India’s largest winemaker by revenue, Sula Vineyards, experienced a 4.2% decline in profit for the fourth quarter, as rising costs eclipsed the steady demand for its premium brands like Dindori and Rasa. The company’s net profit fell to ₹13.6 crore in the March quarter, down from ₹14.2 crore in the same period the previous year.

Revenue for Sula Vineyards rose nearly 10% to ₹131.7 crore in the fourth quarter, fueled by a 14% increase in wine sales. However, the cost of raw materials, including grapes, yeast, and sugar, climbed nearly 9% to ₹88.8 crore, impacting the company’s profits.

See also: Tata Stock Continues To Sink After Q4: Why Analyst Sees Another 30% Slide

The company’s EBITDA margin also saw a decrease, contracting from 26.4% last year to 25.3% in the March quarter.

Additionally, the company’s wine tourism segment saw significant growth, expanding over 31%. CEO Rajeev Samant emphasized the importance of wine tourism, noting that Sula Vineyards is rapidly expanding in this area.

Price Action: Sula Vineyards Ltd. shares were trading 5.25% lower at ₹513.50 on Thursday morning.

Read next: Domino’s Effect: Swiggy, Zomato To Pull Listings Of 13 Restaurants Violating The Pizza Giant’s Trademark