Sula Vineyards , India's largest wine producer, has reported a steady performance for the second quarter of fiscal year 2026, while also announcing key leadership changes and expansion plans. The company has received official shareholder approval for its CEO's re-appointment through a postal ballot process that concluded on December 11, 2025.

Financial Performance

For Q2 FY26, Sula Vineyards reported:

The company's performance was impacted by a temporary route-to-market disruption in Telangana, its third-largest market. However, excluding Telangana, Sula's Own Brands revenue grew in the mid-single digits year-over-year.

Wine Tourism Segment Performance

Despite challenges in the core business, Sula's wine tourism segment reported a record Q2 performance:

This growth was driven by increased footfalls, higher resort occupancy, and increased spend per guest.

Product Mix and Market Performance

• Elite & Premium wines: Maintained a stable share of 78% in Q2 FY26
• Strong double-digit growth reported in eight states, including Haryana, Uttar Pradesh, and Rajasthan
• Sales to Canteen Stores Department (CSD) nearly doubled year-over-year

Official Postal Ballot Results

Sula Vineyards shareholders have officially approved the re-appointment of Rajeev Samant as Managing Director & CEO through a postal ballot process:

The postal ballot was conducted via remote e-voting facility, with the process scrutinized by Martinho Ferrao, Practicing Company Secretary. The resolution was passed with the requisite majority, confirming Samant's continued leadership of the company.

Leadership Changes and Appointments

Along with the CEO re-appointment, Sahil Misra was appointed as Global Brand Ambassador & Head of Exports, effective November 10, 2025, strengthening the company's export and brand management capabilities.

Expansion and Future Outlook

New Resort Launch:

• 'The Haven by Sula' near York Winery in Nashik
• 30-key resort, expanding room capacity by 30% to over 130 keys
• Second phase adding 20 more keys, planned to open by March 2026

Karnataka Expansion:

• New tasting room and restaurant expansion at Domaine Sula by end of Q3 FY26

Infrastructure Improvement:

• Opening of Samruddhi Highway, reducing Mumbai to Nashik travel time by 45 minutes

Rajeev Samant, CEO of Sula Vineyards, commented: "We reported steady revenue from operations in Q2 FY26. Our wine tourism business continued its strong growth momentum to deliver a record Q2. Looking ahead, Sula remains well-positioned to deliver improved operating profitability in the second half of FY26."

As India's wine market continues to evolve, Sula Vineyards' strategic focus on premium offerings and wine tourism positions it well for future growth, despite short-term market challenges.

ICRA Limited, a prominent credit rating agency, has reaffirmed the credit ratings for Sula Vineyards Limited and its material subsidiary, Artisan Spirits Private Limited, while revising the outlook from Stable to Negative. This change affects various fund-based and non-fund based facilities of the company.

Rating Actions

The rating actions taken by ICRA are as follows:

Implications

The revision in outlook from Stable to Negative suggests that ICRA perceives an increased risk in the company's credit profile. While the ratings have been reaffirmed, indicating that the fundamental credit quality remains intact, the negative outlook implies that there may be factors that could put downward pressure on the ratings in the near to medium term.

Recent Developments

In a separate development, Artisan Spirits Private Limited (ASPL), a wholly-owned subsidiary of Sula Vineyards Limited, received a favorable rectification order regarding a previous tax assessment. The order has resulted in the dropping of a significant tax demand:

• Original demand: INR 21,33,54,743
• Dropped amount: INR 21,33,54,743 (comprising tax of INR 9,69,71,770, interest of INR 9,19,99,769, and penalty of INR 2,43,83,204)

This rectification relates to the H Form under the Central Sales Tax Act, 1956, and may have positive implications for the company's financial position.

Investor Considerations

Investors and stakeholders should note that while the core ratings remain unchanged, the negative outlook warrants closer monitoring of Sula Vineyards' financial performance and market conditions. The detailed rationale for the rating action is available on ICRA's website ( https://www.icra.in/ ).

As the wine industry continues to evolve, Sula Vineyards' ability to navigate market challenges and maintain its financial health will be crucial in the coming periods.