Sula Vineyards Q1 Results: Net Profit Drops 45% YoY; EBITDA Margin Contracts
Sula Vineyards reported a 45% YoY decline in consolidated net profit to ₹1.06 crore for Q1FY26, even as revenue from operations grew 2% to ₹120.79 crore. EBITDA fell to ₹164M from ₹183M YoY, with the margin narrowing to 13.59% from 15.47%, reflecting operational pressure. Standalone performance was stronger, with net profit at ₹4.06 crore versus a loss of ₹0.91 crore in Q1FY25, aided by a ₹27.00 crore property sale in Mumbai.
*this image is generated using AI for illustrative purposes only.
Sula Vineyards reported a consolidated net profit of ₹1.06 crore for the quarter ended June 30, 2026, marking a 45% decline from ₹1.94 crore in Q1FY25. Despite the drop in profitability, revenue from operations rose 2% year-on-year to ₹120.79 crore from ₹118.29 crore in the corresponding period last year. The company's standalone net profit stood at ₹4.06 crore, a significant improvement from the standalone loss of ₹0.91 crore recorded in Q1FY25.
The Board of Directors approved the unaudited standalone and consolidated financial results on August 6, 2026, in compliance with Regulation 30 and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Walker Chandiook & Co LLP, the statutory auditors, issued limited review reports on the financial statements. The results reflect the seasonality inherent in the alcoholic beverages business, where revenue and profits do not accrue evenly throughout the year.
A key contributor to the current quarter's other income was the sale of the company's office property in Mumbai. Sula Vineyards sold the asset for a consideration of ₹27.00 crore, recognizing a profit of ₹1.79 crore in other income during the quarter. This non-operational gain helped offset operational pressures, as total expenses remained relatively stable at ₹121.65 crore compared to ₹116.71 crore in Q1FY25.
Financial Performance Overview
The table below summarises key consolidated financial metrics for the quarter:
| Metric: | Q1FY26 | Q1FY25 | Change |
|---|---|---|---|
| Revenue from Operations: | ₹120.79 crore | ₹118.29 crore | +2.10% |
| Total Income: | ₹123.17 crore | ₹119.27 crore | +3.30% |
| Total Expenses: | ₹121.65 crore | ₹116.71 crore | +4.20% |
| EBITDA: | ₹164M | ₹183M | -10.38% |
| EBITDA Margin: | 13.59% | 15.47% | -188 bps |
| Profit Before Tax: | ₹1.52 crore | ₹2.56 crore | -40.60% |
| Net Profit: | ₹1.06 crore | ₹1.94 crore | -45.40% |
On a standalone basis, revenue from operations increased 7.4% to ₹106.65 crore from ₹99.31 crore in Q1FY25. Standalone other income rose significantly to ₹2.64 crore from ₹1.79 crore, driven by the aforementioned property sale. Consequently, standalone profit before tax improved to ₹5.37 crore from a loss of ₹1.10 crore in the prior year period.
Operational Profitability Under Pressure
The decline in EBITDA to ₹164M from ₹183M, alongside a contraction in EBITDA margin to 13.59% from 15.47% in Q1FY25, reflects the pressure on operating profitability during the quarter. The divergence between consolidated and standalone results further highlights the impact of intercompany dynamics and specific group-level adjustments. While the standalone entity posted a robust ₹4.06 crore net profit, the consolidated net profit was lower at ₹1.06 crore, partly attributable to the consolidation of subsidiaries including Artisan Spirits Private Limited and N D Wines Private Limited, and the treatment of exceptional items. Notably, the group recognized an impairment loss of ₹1.82 crore on intangible assets (brands) and related goodwill in FY26, classified as an exceptional item, which weighed on full-year consolidated performance but did not recur in Q1FY26.
The company's paid-up equity share capital remained unchanged at ₹16.89 crore. Basic and diluted earnings per share (EPS) for the consolidated results were ₹0.13, down from ₹0.23 in Q1FY25. In contrast, standalone basic EPS rose to ₹0.48 from a loss of ₹0.11 in the previous year. The management noted that quarterly results may vary due to business seasonality and are not strictly comparable across periods.
Historical Stock Returns for Sula Vineyards
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -1.89% | +0.13% | +9.02% | -10.00% | -40.35% | -49.41% |
How will the proceeds from the ₹27 crore Mumbai property sale be allocated, and will this capital be reinvested into core operations or used for debt reduction?
What specific strategies is management implementing to reverse the 188 bps contraction in EBITDA margins amidst rising total expenses?
Given the divergence between standalone profitability and consolidated losses, what is the current financial health of subsidiaries like Artisan Spirits and N D Wines?
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