Sula Vineyards Limited has clarified to BSE Limited that the delay in disclosing the rejection of its GST appeal was due to the time required for internal assessment and logistical factors. The company faces a confirmed financial liability of Rs 8.12 crore after the Commissioner (Appeals), CGST & Central Excise, Nashik, rejected its appeal against a tax demand. The Order-in-Appeal, dated May 29, 2026, upholds the original demand for the period from FY 2017-18 to FY 2021-22, confirming allegations regarding the tax rate on restaurant services and GST liability on corporate guarantees.

The company explained that while the order was passed on May 29, 2026, the detailed copy was received at its Nashik location on June 12, 2026. It subsequently reached the authorized person at the Registered Office on June 15, 2026, due to the intervening weekend. Sula Vineyards stated that the additional time was necessary to assess the implications of the order and evaluate the appropriate course of action before making the disclosure on June 16, 2026.

Financial Implications

The material financial impact of the order includes a tax demand and a significant penalty. The company disclosed the following breakdown of the confirmed amounts:

The order validates the earlier findings that the company should have paid an 18% GST rate on restaurant services instead of the 5% rate applied. It also upheld the imposition of GST liability on corporate guarantees issued by Sula Vineyards . Consequently, the levy of tax, interest, and penalty as confirmed under the Order-in-Original remains in force.

Company Response

Sula Vineyards stated that it does not agree with the levy confirmed by the appellate authority. The company intends to pursue further legal remedies available under applicable law. Specifically, management indicated that it will file an appeal before the GST Appellate Tribunal (GSTAT) against the current order and expects a favorable outcome at the higher forum. The disclosure was made to the exchanges pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Sula Vineyards Limited reported a 63.5% year-on-year decline in Profit After Tax (PAT) to ₹25.65 crore for the financial year 2025-26 (FY26), down from ₹70.20 crore in the previous year. Revenue from operations decreased by 3.7% to ₹596.19 crore, impacted by weakness in Own Brands, a temporary route-to-market disruption in Telangana, and a high base effect from a one-time gain in FY25. The company's credit rating stands at A+ by ICRA, and Net Debt / EBITDA remained below 3x. The Board has recommended a final dividend of ₹2 per equity share for FY26, subject to shareholder approval.

Financial Performance Overview

The company's operating performance faced pressure during the year. Operating EBITDA fell 30.6% year-on-year to ₹103.44 crore, with margins contracting by 672 basis points to 17.35%. However, cash generated from operations increased by 70% to ₹99 crore, driven by lower working capital consumption. The following table summarises the consolidated financial performance:

Segment Performance: Own Brands and Wine Tourism

Own Brands sales declined 6.4% year-on-year to ₹511.1 crore in FY26, compared to ₹546.2 crore in FY25. Despite the annual decline, the segment returned to growth in Q4 FY26 with a 7% year-on-year increase in sales, led by double-digit growth in the Elite & Premium category. The Elite & Premium portfolio's share in Own Brands rose 130 basis points year-on-year to 78.4% in FY26.

The Wine Tourism segment delivered standout performance, with revenue growing 21% year-on-year to ₹113 crore. This marks the first time the segment's annual revenue crossed the ₹100 crore milestone.

Harvest, Production and Sustainability

Harvest 2026 was healthy in quality and volume, marking the sixth consecutive year of favourable vintages. The company crushed approximately 8,564 tons of wine grapes during the period. Total installed winery capacity grew 5% year-on-year to 19.2 million litres following the commissioning of a 1 million litre low-cost cellar at Domaine Dindori.

On the sustainability front, the share of solar power in total energy consumption increased to 75% in FY26 from 66% in FY25. Water consumption per litre of wine produced was reduced by approximately 7% year-on-year, and the proportion of electric vehicles in the company's fleet rose to 54% from 45% in FY25.

Key Corporate Developments

During FY26, Artisan Spirits Private Limited, a wholly-owned subsidiary, entered into an Asset Purchase Agreement with Moët Hennessy India Private Limited for the proposed acquisition of identified assets forming the estate of Domaine Chandon India located at Dindori, Nashik, for a consideration of ₹20 crore, excluding applicable taxes and inventory. The Board also approved an additional investment of ₹13 crore in the subsidiary by way of rights issue.

Dividend and AGM Agenda

The Board recommended a final dividend of ₹2 per equity share (100%) of face value ₹2 each for FY26, subject to shareholder approval. The equity dividend outgo for FY26 would be ₹16.88 crores. The record date for determining dividend entitlement was May 22, 2026.

The 23rd Annual General Meeting (AGM) is scheduled to be held on Thursday, June 25, 2026, at 2:00 p.m. through Video Conferencing / Other Audio-Visual Means. The cut-off date for determining member eligibility to cast votes through remote e-voting and e-voting during the AGM is Thursday, June 18, 2026. The remote e-voting period runs from June 22, 2026, to June 24, 2026.