Sula Vineyards (SULA) Q2 25/26 earnings summary

Executive summary

• Q2 FY26 revenue was stable at INR 140 crores, with wine tourism achieving record growth and the launch of The Haven by Sula resort in Nashik; own brands saw double-digit growth in The Source range and Telangana disruption impacted sales.

• Wine Tourism revenue reached Rs. 13.2 Cr, up 17.7% YoY, with record occupancy and improved connectivity; new resort added 30 keys, with 20 more to be added in Q4.

• Maharashtra market showed recovery, while Telangana faced temporary disruption due to retail license expiry, impacting sales; recovery expected as new licenses are issued.

• Excluding Telangana, own brand sales grew mid-single digits YoY, with robust growth in several states and the CSD segment more than doubling sales.

• Unaudited standalone and consolidated financial results for the quarter and six months ended 30 September 2025 were approved by the Board on 10 November 2025.

Financial highlights

• Q2 FY26 consolidated revenue was ₹140.49 crore, up from ₹118.29 crore YoY; gross margin contracted by 900 bps YoY due to adverse mix, sourcing model change, and high-cost inventory.

• Operating EBITDA margin declined by 530 bps YoY, but operating costs were reduced by 8% through cost management; PAT for Q2 FY26 was Rs. 6.0 Cr, down 58.5% YoY.

• Net debt at September 2025 was INR 350 crores, up from INR 315 crores last year, mainly due to lower profitability and higher receivables.

• Standalone Q2 FY26 revenue was ₹120.26 crore, up from ₹99.31 crore YoY; standalone net profit was ₹7.39 crore, up from ₹3.15 crore YoY.

• Excluding the one-time WIPS benefit in H1 FY25, YoY declines in key metrics for H1 FY26 were less pronounced: Own Brands -2.2%, Revenue -0.5%, Gross Profit -9.2%, EBITDA -23.4%, PAT -57.5%.

Outlook and guidance

• Strong recovery expected in H2 FY26 as Telangana disruption resolves and new retail licenses are issued; EBITDA margins anticipated to improve, supported by higher VAT refund accrual, wine tourism traction, and phasing out high-cost inventory.

• Wine tourism outlook robust, supported by new resort launches and improved connectivity.

• CapEx to taper to INR 30-35 crores annually for FY26 and FY27, with major expansions completed.

• New resort openings and expanded facilities, including The Haven by Sula and Domaine Sula, are expected to boost performance in H2 FY26.