This article first appeared on GuruFocus .
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Revenue:Q3 revenues impacted by INR21 crores decline due to destocking in Karnataka; nine-month revenue at INR454 crores, a 5% year-on-year decline.
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Own Brands Revenue:Declined by 7% over the nine-month period.
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The Source Range Revenue:Grew 23% year-on-year, increasing from INR32 crores to INR40 crores.
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CSD Channel Revenue:Increased nearly 40% year-on-year for the first nine months.
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Wine Tourism Revenue:Grew 34% year-on-year in Q3; nine-month revenue at INR49 crores, a 22% year-on-year growth.
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Gross Margin:Contracted by 270 basis points year-on-year due to adverse state mix.
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EBITDA:Q3 EBITDA at INR32 crores, a 40% year-on-year decline; nine-month EBITDA at INR76 crores, a 30% year-on-year decline.
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Net Debt:Reduced by INR36 crores to INR319 crores as of December 2025.
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Occupancy Rates:The Source resort occupancy increased to 88%; Beyond resort occupancy also increased to 88%.
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CapEx:Expected to moderate to INR20 crores to INR25 crores annually for FY26 and FY27.
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Warning! GuruFocus has detected 5 Warning Signs with BOM:543711.
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Release Date: February 09, 2026
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 strong demand recovery in Maharashtra, its largest market, with consistent single-digit growth.
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The company experienced double-digit growth in Telangana following the conclusion of the license renewal process, with expectations for continued growth.
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Sula Vineyards Ltd saw healthy double-digit growth in other markets like UP, Rajasthan, Goa, and CSD, with CSD sales up nearly 40% year-on-year.
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The Source range of wines delivered strong double-digit growth, increasing its share within Own Brands to 11% in Q3.
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Wine Tourism business achieved a robust year-on-year growth of 34% in Q3, with increased footfalls and the opening of a new resort, The Haven by Sula.
Negative Points
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The company faced a challenging quarter with significant revenue and profitability impacts due to destocking in Karnataka, its second-largest market.
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Gross margins contracted by 270 basis points year-on-year, primarily due to an adverse state mix and lower contribution from high-margin markets like Karnataka.
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EBITDA for the quarter declined by 40% year-on-year, with an 800-basis-point contraction in margins.
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The company recognized a one-time exceptional charge of INR1.70 crores related to the impairment of certain York brands.
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Interest costs increased by 4% year-on-year, reflecting higher average debt levels, although net debt declined sequentially.
Q & A Highlights
Q: Are there any plans for Sula Vineyards to venture into the spirits market, considering the potential for leveraging resort footfalls for brand promotion? A: Rajeev Samant, CEO, mentioned that while Sula has explored opportunities in the spirits market, high valuation expectations have been a barrier. The company remains open to possibilities but is cautious due to regulatory differences between wine and spirits in Maharashtra. Sula's strong distribution network could be advantageous if they decide to enter the spirits market.
Q: How will the India-EU Free Trade Agreement (FTA) impact Sula Vineyards, particularly with the potential influx of European wines? A: Rajeev Samant, CEO, acknowledged that the FTA could lead to increased competition from European wines priced above INR 1,700. Sula plans to focus on improving quality and branding to maintain its market position. The company is also considering expanding its import portfolio to include strong international brands.
Q: What is the impact of domestic pricing competition on Sula Vineyards, and how is the company addressing it? A: Rajeev Samant, CEO, noted that aggressive discounting by domestic competitors remains a challenge, particularly in the lower-priced wine segment. Sula is focusing on maintaining its market share in the elite and premium segments, where it continues to see growth.
Q: How has the grape harvest affected Sula Vineyards, and what is the outlook for wine supply? A: Rajeev Samant, CEO, explained that the grape harvest this year is lower due to extended monsoon conditions, but this has not significantly impacted Sula's supply of premium wines. The company is well-stocked with bulk wine and expects no supply issues for wines priced above INR 800.
Q: What are the prospects for Sula Vineyards' Wine Tourism segment, and how does it contribute to overall growth? A: Rajeev Samant, CEO, highlighted that Wine Tourism continues to be a strong growth engine, with a 34% year-on-year increase in Q3 revenues. The company plans to invest significantly in this segment, with new projects and expansions to further enhance its offerings and attract more visitors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
