Sula Vineyards (SULA) investor relations material

Executive summary

• Q3 FY26 was challenging due to a one-time destocking in Karnataka, causing significant revenue and profitability pressure, but excluding this, revenue was flat year-on-year.

• Wine tourism posted record Q3 revenue of INR 22 crore, up 34% year-on-year, driven by strong footfall and new resort launches.

• Demand recovery was seen in Maharashtra and Telangana, with double-digit growth in other key markets and channels like CSD.

• Gross profit and margins declined due to lower contribution from high-margin Karnataka.

• The company remains optimistic about a healthy recovery, supported by improved demand, wine tourism momentum, and product innovation.

Financial highlights

• Q3 revenues were significantly impacted by a one-time destocking in Karnataka, with a revenue decline of INR 21 crore in that state.

• Own brands' Q3 revenue was INR 169.5 crore, down 12.9% year-on-year; excluding destocking, revenue was flat.

• Wine tourism revenues grew 34% year-on-year in Q3, reaching INR 22 crore and 11.2% of total revenue.

• Gross margin for Q3 FY26 was 59.7%, down 270 basis points year-on-year.

• Q3 EBITDA declined 40% year-on-year to INR 32 crore, with margin contracting to 16.3% from 24.5%.

• PAT for Q3 FY26 was INR 9.1 crore, down 67.6% year-on-year, with PAT margin at 4.6%.

• An impairment loss of INR 1.7 crore was recognized as an exceptional item.

Outlook and guidance

• No further material destocking is anticipated; own brands are expected to return to growth in coming quarters.

• Wine tourism is projected to sustain strong momentum, with further expansion planned, including a new Nashik project.

• Margins are expected to improve and gradually revert to normalized levels.

• The business is subject to seasonality, making quarterly results not strictly comparable.