Sula Vineyards shares fell 1.45% to Rs 171.15 on Thursday after India’s largest wine producer reported a 34.1% year-on-year decline in net profit for Q4 FY26 and cut its annual dividend — though the CEO’s commentary signals the worst may be behind the company after several difficult quarters.
The Q4 FY26 numbers
| Metric | Q4 FY26 | Q4 FY25 | YoY Change |
|---|---|---|---|
| Revenue | Rs 142.6 Cr | Rs 120.5 Cr | +7.1% |
| EBITDA | Rs 28 Cr | Rs 29 Cr | -2.6% |
| EBITDA Margin | 19.5% | 21.4% | -190 bps |
| Net Profit | Rs 8.6 Cr | Rs 13.03 Cr | -34.1% |
Revenue grew 7.1% year-on-year to Rs 142.6 crore — a positive sign after multiple quarters of muted growth. But EBITDA declined 2.6% and margin contracted 190 basis points to 19.5%, reflecting two specific headwinds. First, higher blended grape costs due to a greater mix of wine grapes versus table grapes during the season. Second, the base quarter of Q4 FY25 included a one-time gain of Rs 3 crore from the catch-up impact of pricing on closing inventory in Karnataka — making the year-on-year comparison harder than it appears.
What is actually working
The operational highlights tell a more encouraging story. The Elite and Premium portfolio grew 11% year-on-year, led by double-digit growth in The Source and RASA labels, and now contributes 79% of total sales — up 400 basis points year-on-year. That premiumisation trajectory is exactly what the market wants to see from Sula.
Wine tourism was the standout, with revenue rising 17% year-on-year to a record Rs 23.9 crore in Q4 FY26, supported by an 11% increase in footfalls and 22% growth in room revenue following the launch of its third resort, The Haven by Sula. Wine tourism is a high-margin, brand-building business that differentiates Sula from any other beverage company in India.
Geographically, Telangana, Uttar Pradesh and Kerala delivered robust growth. Maharashtra and Karnataka — Sula’s two largest markets — are showing improving trends, though CEO Rajeev Samant described the recovery there as “progressively improving” rather than fully restored.
The dividend cut
The board recommended a final dividend of Rs 2 per share for FY26 — down sharply from Rs 3.6 per share declared for FY25. The cut reflects the earnings pressure the company has been under and is likely a key reason for the market’s negative reaction today. At a dividend yield of 2.10% at current prices, Sula remains a yield-bearing stock but the reduced payout signals management caution about near-term cash deployment.
Samant described Q4 as a return to growth after a few tough quarters. At Rs 171.15 — less than half its 52-week high of Rs 335.90 — the market is still waiting for sustained evidence that the recovery is durable before re-rating the stock.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making investment decisions.