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Sula Vineyards' purchase of the Chandon estate is a key move to boost its profitable wine tourism. By taking over the competitor's facility, Sula aims to create top destinations, tapping into India's growing wine culture and demand for unique experiences.
Sula Expands Market Dominance
Sula Vineyards, which holds over 50% of India's premium wine market, is buying the 19-acre Chandon estate in Nashik for ₹20 crore. This deal, handled by its unit Artisan Spirits Private Ltd, means Chandon will stop producing wine in India, strengthening Sula's market position. The estate has a 4.5 lakh litre annual production capacity, expandable to 13 lakh litres, and includes visitor and banquet facilities – key assets for Sula's tourism strategy. Sula plans to start using these facilities right after the handover. The acquisition is expected to finish by the end of Q1 FY27, pending approvals. Sula's stock has recently faced pressure, trading near ₹152.75 on March 25, 2026, well below its 52-week high.
Market Growth and Competitive Edge
India's wine market is expected to grow significantly, with forecasts suggesting an annual growth rate (CAGR) between 14.8% and 23.8% until 2030-2033, potentially reaching USD 2.66 billion by 2033. Key drivers include consumers trading up to premium wines, a younger audience, and changing tastes favoring quality and experiences. Buying the Chandon facility allows Sula to eliminate a direct competitor and use existing infrastructure, which is cheaper than building new facilities from scratch. Sula competes with companies like United Spirits, United Breweries, and Radico Khaitan. Sula's price-to-earnings (P/E) ratio is 42.05x, which is moderate compared to United Breweries (102.35x) and Radico Khaitan (68.65x), but higher than Globus Spirits (33.57x).
Sula's Growth Strategy and Stock Performance
This is not Sula's first acquisition; it previously bought N D Wines Private Limited in April 2024, showing a pattern of growth and tourism expansion. Despite the stock falling about 44% in the past year, the CEO increased his stake in February 2026, a sign of confidence from the company's leadership. Investors will watch if this deal helps the stock recover from its recent slump. Analysts currently rate Sula as 'Outperform' with an average target price of ₹230.50.
Challenges and Risks
However, Sula Vineyards faces challenges. Net profit dropped sharply by 67.6% year-on-year for the quarter ending December 31, 2025, due to destocking in Karnataka and weaker demand, causing revenue to fall 9.7%. Profits have declined for five quarters in a row. Sula's P/E ratio of 42.05x is also considered high relative to some spirits companies, and the stock's recent sharp drop raises valuation concerns, especially if operational issues continue. While Sula leads in India, rising demand for imported wines due to trade deals and strong competition from global brands could threaten its market position long-term.
Outlook for Wine Tourism
This acquisition should significantly boost Sula's wine tourism business, which recently grew 34% year-on-year after a slow period. With India's wine market expected to grow strongly, the Dindori estate is a prime spot to create another major destination, adding to Sula's popular existing tourism sites. This expansion aims to meet growing consumer interest in premium experiences, strengthening Sula's market leadership and future growth potential.