Sula Vineyards has dispatched a postal ballot notice seeking shareholder approval for the appointment of Mr. Chaitanya Rathi as a Non-Executive Non-Independent Director. The company is also seeking approval for the payment of commission to him.

The Board of Directors approved the Postal Ballot Notice at its meeting held on August 6, 2026, pursuant to Section 110 of the Companies Act, 2013 and Regulation 44 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The notice was dispatched electronically on September 7, 2026.

Key Resolutions

Shareholders are being asked to vote on two specific resolutions via remote e-voting:

• Ordinary Resolution: Appointment of Mr. Chaitanya Rathi (DIN: 07705302) as a Non-Executive Non-Independent Director, liable to retire by rotation.
• Special Resolution: Payment of commission to Mr. Rathi in the capacity of a Non-Executive Non-Independent Director.

Remuneration Details

The proposed commission for Mr. Rathi is set at ₹4,00,000 per annum. This remuneration is approved for three financial years: FY26-27 (on a pro-rata basis), FY27-28, and FY28-29.

For FY26-27, the commission will be payable from August 6, 2026, which marks the effective date of his appointment as an Additional Director. This payment is in addition to sitting fees for attending Board or Committee meetings and reimbursement of expenses incurred for such participation.

In the event of no profits or inadequate profits during any of these financial years, the company may pay this commission as minimum remuneration, subject to statutory limits and shareholder approval under Section 197 read with Schedule V of the Companies Act, 2013. The company confirmed it has not defaulted on dues to lenders.

Voting Process

Remote e-voting through the National Securities Depository Limited (NSDL) platform will commence on September 8, 2026, at 9:00 am and conclude on October 7, 2026, at 5:00 pm. Only members whose names appear in the Register of Members or List of Beneficial Owners as on the cut-off date of September 4, 2026, are eligible to vote.

Mr. Martinho Ferrao, a Practicing Company Secretary, has been appointed as the Scrutinizer to conduct the postal ballot process fairly. The results will be declared within two working days of the conclusion of the voting period, i.e., on or before October 9, 2026.

Sula Vineyards reported a 3% year-on-year revenue increase to ₹121 crore for the quarter ended June 30, 2026, continuing the positive momentum from the previous quarter. The growth was primarily driven by a 6% expansion in its Elite & Premium portfolio and double-digit gains in its Wine Tourism segment, which saw revenues rise 12% to ₹15.5 crore. Despite the top-line growth, gross profit contracted by 5% compared to the same period last year.

The decline in gross profit was attributed to two main factors. First, a shift in procurement mix towards wine grapes, which accounted for nearly 100% of total grapes procured in harvest 2026 compared to 80% in previous years, impacted margins by approximately 150 basis points. Second, an adverse geographical mix, with stronger sales in lower-margin markets like Telangana and Haryana relative to core markets, reduced gross margin by another 200 basis points. Management noted that these higher costs are temporary and expected to normalize from Q4 FY27 onwards as the grape mix rebalances.

Operational Highlights

The company’s Own Brands business grew by 2%, led by the Elite & Premium portfolio, which now constitutes 78% of Own Brands sales, up 310 basis points from the prior year. Flagship brands The Source and RASA delivered double-digit growth, accounting for an all-time high of 16% of Own Brands sales. In contrast, the Economy & Popular portfolio faced pressure due to competitive discounting.

Wine Tourism emerged as a key growth driver, contributing approximately 13% to overall revenue. Growth in this segment was fueled by a 21% increase in room revenues following the launch of the third resort, The Haven, and higher spend per guest. Resort occupancy stood at around 63%, excluding The Haven, it was over 70%.

Financial Performance

Operating expenses declined by 3% year-on-year, aided by a 6% reduction in employee benefit expenses and lower ESOP costs. This cost optimization helped partially offset the impact on EBITDA. Depreciation increased by 12% due to new assets including The Haven resort, while interest costs fell by 4% driven by lower average debt levels.

Net debt stood at ₹319 crore as on June 26, 2026, down from ₹345 crore a year earlier. Management expects net debt levels to continue trending lower through FY27. Working capital signals showed WIPS receivables at ₹88 crore as on June 26, reducing to approximately ₹80 crore after a ₹10 crore payout in July.

What the Numbers Show

The divergence between revenue growth and gross profit contraction highlights a significant margin compression event. While revenue grew 3%, gross profit fell 5%, indicating that the 350 basis point combined impact of raw material mix and geographical sales distribution severely eroded profitability. This suggests that current volume growth is not yet translating into proportional earnings power, making the upcoming normalization of grape costs in Q4 FY27 critical for margin recovery.

Looking ahead, management indicated that table grape prices are likely to decrease meaningfully from the spike seen in harvest 2026, where prices reached ₹35 per kilo compared to the typical ₹15-16 per kilo. This normalization is expected to benefit the Popular & Economy portfolio margins starting FY28. Additionally, preliminary approval for five additional brand listings in the CSD channel is expected to drive further growth, with CSD currently contributing around 4% of FY26 revenues.