India's largest winemaker Sula Vineyards Ltd. reported a sharp decline in financial performance for the third quarter ended December 31, marking the fifth consecutive quarter of profit decline. According to reports from CNBC TV18, net profit fell 67.5% year-on-year to ₹9.1 crore, compared with ₹28 crore in the same period last year. The company attributed this weak quarter to one-time tactical destocking in Karnataka, its second-largest market. As per the latest market data, the company's market capitalization stood at ₹1,571.1 crore as of February 5, 2026, with a trailing twelve months (TTM) P/E ratio of 32.03x. Shares closed at ₹187.99 on Friday, marking a 2.28% decrease for the day, though trading around ₹188.00 on February 6, 2026.
Revenue for the quarter declined 9.6% YoY to ₹195.7 crore, down from ₹216.6 crore a year ago, as reported by CNBC TV18. Operating performance also weakened significantly, with EBITDA dropping 40.2% YoY to ₹31.8 crore, compared with ₹52.2 crore in the year-ago quarter. The company's EBITDA margin contracted to 16.3%, from 24.6% in the corresponding quarter last year. The operational impact was substantial, with Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) plummeting 40.2% year-on-year to ₹31.8 crore, reflecting the significant impact of the strategic inventory management initiative.
CEO Rajeev Samant explained that Q3 was a challenging quarter primarily impacted by one-time tactical destocking undertaken in Karnataka, the company's second-largest market. According to CNBC TV18, Samant stated that the objective was to right-size channel inventory and optimize working capital amid subdued demand in Bangalore. He noted that excluding the one-time destocking impact, Q3 revenue was in line with last year, suggesting underlying demand resilience in other regions. This strategic inventory management highlights a delicate balance between optimizing operations and meeting market expectations, especially as the company aims for growth in a competitive beverage sector.
Despite the overall challenges, Sula Vineyards identified a promising growth frontier in wine tourism, which grew 34% YoY, marking a turnaround after at least five quarters of subdued performance, as reported by CNBC TV18. The company expressed optimism about recovery signs in Maharashtra, its largest market, indicating broader positive market signals beyond the Karnataka-specific challenges. This resurgence offers a vital, high-margin revenue stream, demonstrating the company's ability to leverage its brand and infrastructure beyond core product sales. The wine tourism segment emerged as a significant growth driver amid the sales contraction, signaling strong recovery potential.
In parallel with financial reporting, Sula Vineyards announced a key leadership appointment. Gayathri Iyer has been appointed as the Company Secretary and Compliance Officer, effective immediately, and will be part of the senior management personnel. This appointment, made under Listing Regulations, occurs at a critical juncture, reinforcing governance structures as the company navigates operational adjustments and market scrutiny. The company's past year stock performance saw a decline of approximately 47-49%, trading within a 52-week range of ₹175.31 to ₹370.00. Despite the quarterly financial pressures, the analyst consensus for Sula Vineyards remains positive, with a 'Buy' rating from 3 out of 5 analysts, and 2 recommending a 'Hold'. The average 12-month price target is projected at ₹264.8, implying a potential upside of approximately 24.67% from current levels.
