Sula Vineyards FY26 profit slumps 63%, Q4 income rises

What changed for Sula in Q4 and FY26

Sula Vineyards, India’s largest wine producer, reported a weak close to FY26, with profitability hit by higher costs and a tougher base effect from the prior year. The company’s consolidated net profit fell sharply for both the quarter ended March 31, 2026 (Q4FY26) and the full year. At the same time, the top line in Q4 improved, supported by better demand for its own brands and a record quarter for the wine tourism business.

The numbers highlight a familiar split in the business. Premium products and experiences continued to grow, but input cost inflation and higher overall spending outpaced revenue growth in the quarter. The board also recommended a lower final dividend, reflecting reduced profitability.

Q4FY26: Net profit falls, but income grows

For Q4FY26, Sula’s consolidated net profit declined 33.31% year-on-year to ₹8.69 crore (also reported as ₹8.59 crore in another disclosure), compared with about ₹13.03 crore in the year-ago quarter. Consolidated total income rose 7.51% to ₹144.17 crore (also reported as ₹142.60 crore), showing that demand held up even as profitability weakened.

Management described the quarter as an improvement after several softer quarters, saying performance “significantly improved” and returned to a growth trajectory. The quarter’s revenue growth was linked to improved demand for Sula’s own brands and a strong showing by the wine tourism segment.

Costs outpace revenue, squeezing margins

The quarter’s profit decline was primarily attributed to cost pressures. Total Q4 expenditure rose 9% year-on-year to about ₹132.0 crore, growing faster than income. Gross margin narrowed by 745 basis points to 70.7%, indicating a meaningful impact from raw material and other costs.

EBITDA in Q4FY26 slipped 2.6% year-on-year to about ₹28.0 crore, and the EBITDA margin was reported at 19.5%. The company also faced a prior-year comparison that included a one-off gain, which amplified the year-on-year profit decline.

Premium portfolio continues to gain share

Even as margins came under pressure, Sula reported a stronger mix shift toward higher-end products. The “Elite and Premium” portfolio posted 11% year-on-year sales growth in Q4FY26. Its contribution to total sales increased to 79% from 75% a year earlier.

This mix change matters because higher-priced products typically support better realisations, but in Q4FY26 those benefits were not enough to offset rising costs and a faster increase in total spending.

Wine tourism posts record revenue in Q4

The wine tourism business was a key growth driver in the quarter. Revenue from wine tourism rose 17% year-on-year to a record ₹23.9 crore in Q4FY26. The growth was supported by an 11% increase in visitor footfalls.

Sula also reported that room revenue increased 22% after the opening of a new resort, adding incremental capacity and supporting higher hospitality income. The company has repeatedly highlighted wine tourism as a strategic focus area, and Q4FY26 results reinforced that positioning.

FY26: Annual profit drops 63.46% as income declines

For the full year ended March 31, 2026 (FY26), Sula reported a 63.46% plunge in consolidated net profit to ₹25.65 crore, compared with ₹70.20 crore in the prior year. Consolidated total income declined 3.64% year-on-year to ₹600.62 crore.

The annual picture suggests that pressures seen in parts of the year extended beyond a single quarter. Sula’s total consolidated expenses for FY26 rose to ₹563.31 crore from ₹534.97 crore, indicating continued cost inflation and spending levels that did not fully adjust to slower income growth.

An exceptional impairment loss of ₹1.82 crore related to brands and goodwill was also recognised during the period.

Standalone Q4: Loss despite revenue

Sula also reported a standalone net loss of ₹5.76 crore for Q4FY26, even though standalone total income for the quarter was ₹113.22 crore. The difference between consolidated and standalone performance can reflect the impact of subsidiaries or segment profitability within the group structure.

While the article data does not provide detailed drivers for the standalone loss, the disclosed figures point to pressure on profitability at the entity level in the same period when consolidated profit also fell.

Dividend recommendation lowered to ₹2 per share

Reflecting the reduced profitability in FY26, Sula recommended a final dividend of ₹2 per share. This is a reduction from ₹3.6 per share paid in the prior year.

Dividend changes are closely watched by investors because they often track management’s view of cash flows and earnings resilience. In Sula’s case, the cut came alongside a steep annual profit decline and higher expense levels.

What management has pointed to in recent quarters

In earlier commentary for Q3FY26, CEO Rajeev Samant attributed challenges in the core wine business to a one-time tactical destocking in Karnataka, the company’s second-largest market. The move was described as a step to right-size channel inventory and optimise working capital amid subdued demand in Bengaluru. Excluding that destocking impact, Sula said Q3 revenue was flat year-on-year.

In Q4FY26, management said results improved after a few quarters of weakness, with premium products and wine tourism standing out as key supports.

Key reported numbers at a glance

Market impact: Margin pressure becomes the central issue

The most important takeaway from Q4FY26 is that income growth did not translate into profit growth. With expenditure rising faster than income and gross margin narrowing sharply, the quarter highlights how sensitive earnings are to raw material inflation and operating costs.

For investors, the FY26 outcome reinforces the same concern at the annual level: income fell modestly, but profit dropped significantly, alongside higher expenses and an impairment charge. The dividend cut to ₹2 per share further signals that FY26 profitability was not strong enough to sustain the prior year’s payout.

Analysis: Why the mix shift was not enough in Q4

Sula’s premiumisation trend is visible in Q4FY26, with the Elite and Premium portfolio rising to 79% of sales and delivering 11% growth. The wine tourism business also hit a record quarter, benefiting from higher footfalls and expanding room inventory.

But the margin outcome shows the limits of mix gains when costs rise quickly. With gross margin down 745 basis points and EBITDA slightly lower, the operating lever in the quarter worked against earnings, even as top-line momentum improved.

Conclusion

Sula Vineyards ended FY26 with a weaker profit profile, marked by a steep annual net profit decline and a Q4 profit drop despite higher income. The quarter underlined strong momentum in premium products and wine tourism, but also showed that rising costs and higher spending can outweigh revenue growth. The next key watchpoints will be how the company manages cost inflation and whether demand-led growth in own brands and wine tourism continues into FY27.