Sula Vineyards (SULA) Q3 24/25 earnings summary

Executive summary

• Own brands achieved 11th consecutive quarter of growth, though Q3 growth was subdued due to urban consumption slowdown and election-related disruptions in Maharashtra, the largest market.

• Elite and premium portfolio reached an all-time high portfolio share of 80.5%, growing 6% year-over-year, with flagship brands recording double-digit growth; non-core markets outside Maharashtra and Karnataka grew 8%.

• Wine tourism segment delivered record quarterly revenue of Rs. 16.4 Cr, up 12% year-over-year, driven by higher occupancy (81%) and increased average room rates.

• SulaFest returned after five years, attracting over 10,000 attendees and boosting brand visibility; wine in cans format saw strong acceptance, and the event is now planned biennially.

• Unaudited standalone and consolidated financial results for the quarter and nine months ended 31 December 2024 were approved by the Board on 5 February 2025, with no material misstatements found by independent auditors.

Financial highlights

• Net revenue for Q3 FY25 was Rs. 217.5 Cr, down 0.6% year-over-year; gross margin declined to 62.4% from 67.0% YoY; EBITDA margin for Q3 FY25 was 24.8%, down from 33.5% YoY.

• Consolidated revenue from operations for Q3 FY25 was INR 216.64 crore, up from INR 141.21 crore in the previous quarter and INR 218.94 crore in Q3 FY24.

• EBITDA declined 26% to INR 54 crore; PAT margin for Q3 FY25 was 12.9%, down from 19.6%; basic EPS for Q3 FY25 was Rs. 3.32, down 34.7% YoY.

• Outstanding debt reduced to INR 63 crore by January 2025, aided by government payments.

• Standalone revenue for Q3 FY25 was INR 180.93 crore, up from INR 123.75 crore in the previous quarter; standalone net profit for Q3 FY25 was INR 16.33 crore.

Outlook and guidance

• Q4 expected to be in line with last year; FY26 targeted for significant earnings expansion, with full realization of WIPS potential and new production capacity.

• Margins expected to recover 200-300 bps as S&D spend is moderated and revenue growth returns.

• Strategic focus on product launches, capacity expansion, and market penetration, including new markets and D2C business.

• SulaFest and wine tourism expansions anticipated to boost Q4 and FY26 revenues.