Sula Vineyards Limited (NSE: SULA, BSE: 543711) reported lower profit for the quarter ended Dec. 31, 2025, as one-time tactical destocking in Karnataka and an adverse market mix weighed on revenue and margins, while wine tourism delivered strong growth, according to the company’s Q3 & 9M FY26 investor presentation.
Q3 FY26 financial performance
Revenue from operations in the third quarter fell 9.7% year on year to ₹195.7 crore. The decline was primarily attributed to a one-time channel destocking exercise in Karnataka aimed at correcting inventory levels and conserving working capital amid subdued demand in Bengaluru. Excluding this impact, the company said revenue was broadly in line with the year-ago period.
Gross profit declined 13.6% to ₹116.9 crore, with gross margin compressing to 59.7% from 62.4% a year earlier. The margin contraction reflected a lower contribution from Karnataka, a higher-margin market, whose share declined to 11% from 20% a year earlier.
Operating EBITDA fell 39.8% to ₹32.0 crore, and the EBITDA margin contracted to 16.3% from 24.5% in Q3 FY25 due to operating deleverage. Profit after tax dropped 67.6% to ₹9.1 crore, with the PAT margin at 4.6%.
Nine-month FY26 performance
For the nine months ended Dec. 31, 2025, revenue from operations declined 6.7% year on year to ₹453.6 crore. Gross profit fell 14.5% to ₹288.2 crore, while operating EBITDA decreased 37.2% to ₹75.7 crore.
Profit after tax for 9M FY26 stood at ₹17.1 crore, down from ₹57.2 crore in the prior-year period. The company noted that 9M FY25 included a one-time benefit related to WIPS unwinding, and excluding this, the year-on-year declines in key metrics were lower.
Own brands and portfolio mix
Own brands revenue declined 12.9% year on year to ₹169.5 crore in Q3 FY26, reflecting the tactical destocking in Karnataka. The elite and premium portfolio continued to account for about 80% of sales in the quarter. Telangana returned to growth in Q3, and Maharashtra posted consistent growth after a challenging prior year. Management said it expects a rebound in own brands performance in Q4 as route-to-market disruptions ease.
Wine tourism drives growth
Wine tourism delivered a record quarter. Wine tourism revenue rose 33.7% year on year to ₹22.0 crore in Q3 FY26, supported by 17% growth in visitor footfall to about 127,400. The launch of the third resort, The Haven by Sula, contributed to higher capacity and revenues.
Average room occupancy remained robust at 79%, while average room revenue was broadly stable year on year. Wine tourism’s share of total revenue increased to 11.2% from 7.6% a year earlier, partly offsetting the decline in own brands.
Network expansion and product launches
During FY26, Sula expanded its wine tourism footprint with the phased launch of The Haven near York Winery in Nashik, adding 50 keys ahead of schedule and expanding total room capacity to 154 keys. A new tasting room and expanded restaurant were launched at Domaine Sula in Karnataka in January 2026.
The company also launched new products, including The Source Chardonnay Reserve and Sula Muscat Blanc, and highlighted continued focus on expanding premium offerings and direct-to-consumer channels.
Outlook
Management said demand conditions have improved across most key markets, barring Bengaluru, and expects a healthier recovery in coming quarters. The company plans to continue expanding its resort portfolio with a new project in Nashik and to support growth through product launches, brand activation and wider distribution.
Summary
Sula Vineyards reported lower profit in Q3 FY26 as tactical destocking and an adverse geographic mix weighed on revenue and margins. Wine tourism delivered strong growth and partially offset the decline in own brands. Management indicated improving demand trends and expects a recovery supported by a rebound in core brands and continued expansion of the wine tourism business.