Fratelli H1 EBITDA turns positive, but net loss is Rs 8.4 crore

Fratelli Vineyards posted Rs 1.4 crore of EBITDA in H1FY27, reversing a Rs 80 lakh EBITDA loss in H1FY26, but remained loss-making with a Rs 8.4 crore profit-after-tax loss. The presentation labels the figures as standalone numbers. Finance cost rose to Rs 7.8 crore and depreciation reached Rs 4.8 crore, exceeding the operating profit generated in the six-month period.

What changed in Fratelli’s H1FY27 earnings?

Fratelli’s H1FY27 revenue increased and its operating result moved into profit, while gross-profit margin declined and the company remained loss-making. Net revenue from operations rose 10% year on year to Rs 91.4 crore from Rs 83.4 crore. Gross profit increased to Rs 71.7 crore from Rs 66.7 crore, but gross-profit margin declined by 2 percentage points to 78% from 80%, reflecting changes in product mix cited by management.

The principal improvement was at the earnings before interest, tax, depreciation and amortisation, or EBITDA, level. EBITDA was Rs 1.4 crore in H1FY27, compared with a loss of Rs 80 lakh in H1FY26, and the EBITDA margin was 1.5% against a negative 0.84% a year earlier. Profit before tax nevertheless remained negative at Rs 11.3 crore, only Rs 60 lakh narrower than the Rs 11.9 crore loss reported in H1FY26.

What drove Fratelli’s return to positive EBITDA?

Fratelli’s positive H1FY27 EBITDA was supported by 10% revenue growth and management’s stated improvement in operating leverage. The Luxury segment grew revenue by 4%, led by the J’noon range, which recorded 23% revenue growth. Ready-to-drink, or RTD, revenue more than doubled during the half year, although the presentation did not disclose its revenue base or absolute sales value.

Performance varied materially by segment and market. Premium-segment revenue fell 11% in H1FY27 after changes in Uttar Pradesh excise policy caused an industry-wide slowdown, while the Value segment grew 4%, supported by South India despite inventory correction. Delhi grew 1% in H1FY27, but management said its Q2 recovery followed a subdued Q1 affected by excise-policy changes; Fratelli also cited growth in Odisha, Telangana, Kerala, Puducherry and Goa.

Why did Fratelli remain loss-making despite positive EBITDA?

Fratelli remained loss-making because finance cost and depreciation together totalled Rs 12.6 crore in H1FY27, far above its Rs 1.4 crore EBITDA. Finance cost rose Rs 1.2 crore year on year to Rs 7.8 crore from Rs 6.6 crore. Management attributed the increase to borrowings undertaken for working-capital requirements, rather than to an operating expense within the EBITDA calculation.

Depreciation increased to Rs 4.8 crore in H1FY27 from Rs 4.6 crore in H1FY26, which management linked to new assets commissioned last year. After these charges, Fratelli reported a pre-tax loss of Rs 11.3 crore. Its tax line was Rs 2.9 crore, compared with Rs 3.0 crore in H1FY26, resulting in a Rs 8.4 crore loss after tax versus a Rs 8.9 crore loss in the prior-year half.

How did Fratelli’s second quarter compare with the first quarter and last year?

Fratelli’s Q2FY27 revenue of Rs 46.0 crore was broadly unchanged from Rs 46.3 crore in Q2FY26 and slightly ahead of Rs 45.4 crore in Q1FY27, but quarterly EBITDA declined. Q2FY27 EBITDA was Rs 25 lakh, compared with Rs 1.1 crore in Q1FY27 and Rs 1.5 crore in Q2FY26. The EBITDA margin was 0.54% in Q2FY27, versus 2.4% in Q1FY27 and 3.2% a year earlier.

Quarterly net losses also widened from the preceding quarter. Fratelli recorded a Rs 4.6 crore loss after tax in Q2FY27, compared with a Rs 3.8 crore loss in Q1FY27 and a Rs 3.1 crore loss in Q2FY26. Q2 finance cost was Rs 4.0 crore, up from Rs 3.8 crore in Q1FY27 and Rs 3.4 crore a year earlier, while depreciation was Rs 2.4 crore in both Q2FY27 and Q1FY27.

What operating actions and launches could affect Fratelli’s next results?

Fratelli is expanding its RTD and bottle portfolio while seeking supply-chain efficiencies. RTD manufacturing lines achieved operational efficiency of more than 85% in Q2FY27, and the company is evaluating an additional bottling line for the segment. More than 95% of packaging material is sourced locally, while solar energy supplies 45% of requirements at the Akluj Winery, according to the presentation.

Distribution reached 32,000 touchpoints, including more than 11,000 for Shotgun, as of the H1FY27 update. Shiraz Cabernet was registered in 15 states by September 2026, and Shotgun flavours were present in 15 states. Management said Shotgun Jamun, launched in Q2FY27, had a further rollout planned for Q3FY27; it also plans to enter Jammu and Kashmir and Tamil Nadu State Marketing Corporation, or TASMАC, channels.

Conclusion

Fratelli’s H1FY27 figures show an operating turnaround rather than a full earnings turnaround. Revenue rose by Rs 8.0 crore year on year, and EBITDA improved by Rs 2.2 crore from a Rs 80 lakh loss to a Rs 1.4 crore profit. However, the Rs 1.2 crore increase in finance cost and Rs 20 lakh rise in depreciation kept the company at a Rs 8.4 crore loss after tax.

The next reported periods will show whether the Q2FY27 EBITDA decline to Rs 25 lakh was temporary or persists as Fratelli funds working capital and new assets. Management’s disclosed milestones include the Q3FY27 Shotgun Jamun rollout, planned Q4FY27 Shotgun sales in Canteen Stores Department channels, and evaluation of an additional RTD bottling line.