Sula Vineyards Shares Fall 5% Despite Reporting 51% QoQ Increase in Net Profit; Here’s Why

Synopsis: Shares slipped 5% after Q3FY26 earnings, impacted by one-time destocking in Karnataka. Sales declined 10% YoY, while earnings fell 68%. Wine tourism hit a record ₹22 crore, up 33.7%, with 17% higher footfalls. Premium mix stayed strong at 80%, signaling gradual recovery ahead.

The shares of the leading winery plummeted up to 5 percent in today’s trading session from intraday low after the company announced negative Q3FY26 earnings, primarily due to one-time tactical destocking in Karnataka.

With a market capitalisation of Rs 1,584.65 crore, the shares of Sula Vineyards Ltd were trading at Rs 187.65 per share, decreasing around 0.29 percent as compared to the previous closing price of Rs 188.35 apiece.

Sula Vineyards is India’s leading wine producer and has been recognised for its pioneering role in setting up and developing the Indian wine industry. The winery, started in the Nashik region, boasts an impressive portfolio of wine and aims to contribute significantly to the nation’s flourishing wine culture.

Q3FY26 Highlights

The shares of Sula Vineyards Ltd have seen significant movement after announcing its financial performance in Q3FY26, in which revenue decreased by 10 percent on a year-on-year basis from Rs 200 crore in Q3FY25 to Rs 180 crore in Q3FY26. However, on a Quarter-on-Quarter basis, revenue increased by 37 percent from Rs 131 crore in Q2FY26 to Rs 180 crore in Q3FY26.

Moreover, net profit decreased by 68 percent on a yearly basis from Rs 28.06 crore in Q3FY25 to Rs 9.10 crore in Q3FY26, meanwhile, on a quarter-on-quarter basis, net profit increased by 51 percent from Rs 6.02 crore in Q2FY26 to Rs 9.10 crore in Q3FY26.

It has achieved its highest-ever quarterly wine tourism revenue of ₹22 crore in Q3FY26, up 33.7% YoY. Growth was led by a healthy 17% rise in footfalls and the launch of The Haven by Sula, which added 30 rooms in Phase 1. This strengthens its premium tourism positioning.

The decline in Q3 FY26 Revenue from Operations 9.7% YoY was largely due to one-time tactical destocking in Karnataka to address channel inventory and release working capital due to softer demand in Karnataka. On a normalised basis, excluding one-time tactical destocking in Karnataka, Q3 FY26 Revenue from Operations grows at a flat YoY basis.

The company witnessed healthy double-digit growth across Telangana, UP, Rajasthan, Goa, and CSD during the quarter, reflecting improving regional demand. Telangana returned to growth in Q3 after resolving route-to-market disruptions, with stronger momentum expected in Q4. Maharashtra, its largest market, also rebounded and delivered consistent growth after a challenging year.

Portfolio mix remained steady, with Elite and Premium segments contributing around 80%, indicating sustained strength in higher-value products. The Source range stood out, posting accelerated double-digit growth. Its contribution to Own Brands rose 250 basis points year-on-year to 11% in Q3, highlighting improving brand traction and premiumisation strategy.

Management feels that Q3 marked the trough for revenue and profitability, with the recovery signs already visible across most key markets, excluding Bengaluru. An improving trend in demand and expansion of the resort portfolio, including a new Nashik project, indicates growth intentions. A rebound in Own Brands and sustained momentum in Wine Tourism are expected to drive healthier performance ahead.

The company has built a robust pan-India distribution network with presence across 23 states and 7 Union Territories. Supported by 51 distributors and around 25,000 points of sale, it ensures a strong market reach. With exports to 29 countries and multiple depots and defence units, the network reflects scale, diversification, and an expanding global footprint.

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