Sula Vineyards reported a 45.4% decline in Q1 FY27 net profit to ₹1.06 crore, despite a 3% rise in revenue to ₹112.88 crore. The company faced margin pressure due to higher costs for wine grapes. While the premium portfolio and tourism business showed growth, investors are monitoring how management balances raw material expenses with rising operational demands.
Sula Vineyards reported a 45.4% decline in its consolidated net profit for the first quarter of the 2027 financial year. The company’s profit fell to ₹1.06 crore, down from ₹1.94 crore in the same period a year ago. This dip occurred even as the company saw a modest 3% increase in revenue from operations, which rose to ₹112.88 crore from ₹109.64 crore.
The primary reason for the profit decline was an increase in raw material expenses. The company noted that higher costs for procuring wine grapes, particularly due to a shift in the mix toward wine grapes over table grapes, directly impacted its profit margins. As a result, the Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) margin contracted to 14.7%, compared to 16.7% in the previous year. In absolute terms, the EBITDA fell by 9.3% to ₹16.60 crore.
While profitability faced headwinds, certain areas of the business continued to perform well. Revenue from wine tourism grew by 12% year-on-year to ₹15.5 crore. This segment was supported by higher spending from guests and the launch of the new resort, 'The Haven.' Additionally, the company's 'Elite and Premium' portfolio—which includes brands like The Source, RASA, and Sula Merlot—saw a 6% increase in sales. This high-value segment now accounts for 78% of the company's total portfolio, reflecting a steady move toward higher-value products.
On the corporate front, the company’s board approved the appointment of Rinku More as the new Chief Financial Officer (CFO) and Chaitanya Rathi as an Additional Non-Executive Non-Independent Director, both effective August 6, 2026. Furthermore, Sula Vineyards completed the acquisition of the Chandon estate in Nashik, which has been rebranded as 'Domaine RASA' to further boost its wine tourism infrastructure.
From a regional perspective, the company reported strong sales momentum in Telangana, Haryana, and Chandigarh, along with growth in export markets. However, the Karnataka market remains a challenge, with the company aiming for a turnaround in the second half of the 2027 financial year. The company's shares were trading in the range of ₹167–₹169 as of August 6, 2026, reflecting investor reaction to the quarterly results.
For investors, the key monitorable in the coming quarters will be the company’s ability to manage its input costs. Future performance will depend on whether the continued shift toward premium products and the expansion of tourism assets can offset the volatility in grape procurement prices and protect overall profit margins.