This article first appeared on GuruFocus .
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Revenue:Stable at INR140 crores for Q2 FY26.
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Wine Tourism Growth:8% growth in Q2 and 15% growth in H1 FY26.
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Own Brands Volume:1.5% increase in volume, but a 2.5% decline in value due to an unfavorable sales mix.
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Elite & Premium Brands:3% decline in Q2, maintaining a 78% mix.
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Gross Margin:Contracted by around 900 basis points year-over-year.
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EBITDA Margin:Declined by 530 basis points year-over-year.
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Net Debt:INR350 crores at the end of September 2025, up from INR315 crores in September last year.
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Cash Generated from Operations:Positive INR4 crore in H1 FY26.
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CapEx:Expected to taper down to INR30 crore to INR35 crore.
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WIPS (VAT Refund):Outstanding balance of INR80 crores at the end of September, with INR20 crores accrued and INR13 crores received in H1.
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Warning! GuruFocus has detected 4 Warning Signs with BOM:543711.
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Release Date: November 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Sula Vineyards Ltd ( BOM:543711 ) reported record growth in its Wine Tourism business, with an 8% increase in Q2 and 15% in H1.
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The company launched a new resort, The Haven by Sula, which is expected to significantly contribute to future Wine Tourism revenue.
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The Source range of wines continues to perform strongly, achieving double-digit growth and forming 10% of own brands revenue.
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Maharashtra, a key market for Sula Vineyards Ltd ( BOM:543711 ), showed signs of recovery, returning to growth in Q2.
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The CSD segment saw robust growth, with sales more than doubling year-on-year in Q2, benefiting from expanded label listings.
Negative Points
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Overall revenue remained flat at INR140 crores, indicating challenges in the market environment.
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Own Brands experienced a marginal decline in Q2 due to route-to-market disruptions in Telangana, a significant market for the company.
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Gross margin contracted by around 900 basis points year-over-year, impacted by adverse market and product mix.
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The company faced higher interest costs due to increased average debt levels and slow collections from Telangana.
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Net debt increased to INR350 crores, primarily due to lower profitability and higher receivables.
Q & A Highlights
Q: Rajeev, what is your take on the canned wine market in India? Are we pursuing this segment aggressively? A: Rajeev Samant, CEO: We have been pioneers in the canned wine segment. While there has been some success, such as our wines being featured on IndiGo's International business class, growth has been slower than expected due to some challenges. However, we see potential, especially if permissions to serve wine in stadiums are granted, which could be a significant growth driver.
Q: What is the expected additional WIPS benefit in Q3 and Q4 of this financial year? A: Abhishek Kapoor, CFO: The challenges faced last year due to new units not being fully operational are no longer an issue. We expect to capture 100% of WIPS as it accrues from Maharashtra sales, recovering the INR6 crore WIPS lost in the second half of last year.
Q: Can you provide insights into the focus on imported brands and their profitability? A: Rajeev Samant, CEO: Profitability from imported brands will not match our Own Brands, but with reduced import duties and minimum import prices, there is potential for higher profitability. We aim to build this segment steadily to not miss out on increased demand for imported wines.
Q: With the retail allotment finalized in Telangana, do you expect similar disruptions in Q3? A: Abhishek Kapoor, CFO: The auction process is underway, and we expect the disruptions to end once trade licenses are issued. We anticipate recovery starting December 1, benefiting Q3.
Q: What is the expected CapEx for FY26 and FY27? A: Abhishek Kapoor, CFO: The CapEx for both FY26 and FY27 is expected to be in the range of INR30 crore to INR35 crore annually. Most major expansions are complete, and this CapEx will cover running expenses.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
