Sula Vineyards Q4FY25: A Toast with a Twist
It’s that time again—earnings season—and all eyes were on Sula Vineyards. India’s beloved winemaker popped open its numbers for Q4FY25, and let’s just say, the vintage this quarter was a bit mixed.
Let’s uncork the details
The Grape Reality: Mixed Signals This Quarter
Sula’s Q4FY25 came with a few cheers and some cautious sips.
Here’s the gist:
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Revenue growth was weak, but cost control helped cushion profits.
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Margins took a hit, but not unexpectedly.
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Urban demand was soft, and some markets were clearing excess inventory.
“We cut FY26-27E EPS by 11-13%, roll over and revise FV to ₹325 (from ₹400). We are valuing Sula at 32x June 2027E PE (35x earlier). Retain ADD.” — Kotak Research Team
What Went Well: Hospitality is Pouring Strong
If there’s a reason to raise a glass, it’s Sula’s hospitality segment.
| Metric | YoY Change |
|---|---|
Hospitality Revenue | 24.4% ↑ |
Occupancy Trends | Recovering |
The good vibes were backed by better occupancy across their properties—a refreshing comeback for the segment.
The Sour Notes: Revenue Misses the Mark
Despite the warm buzz around hospitality, Sula’s core wine business had a slightly flat finish.
What went wrong?
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Urban slowdown — Demand just didn’t pick up as expected.
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Channel destocking — Distributors in some markets were reducing their inventory.
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Core market softness — Sula’s bread-and-butter markets weren’t as bubbly.
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Lower WIPS credits — Less support from the Wine Industrial Promotion Scheme.
Margins: A Little Give, A Little Take
Even though topline growth was muted, margin management offered a silver lining.
| Metric | Q4FY25 | YoY Movement |
|---|---|---|
EBITDA Margin | 22.6% | -140 bps |
Gross Margin | 82.8% | +275 bps |
So while profits felt a squeeze, gross margins showed Sula still knows how to keep the operation lean and luxe.
Final Sip: What Does This Mean for Investors?
Q4 wasn’t a blockbuster, but it wasn’t a washout either. Hospitality is bubbling nicely, and while own-brand sales took a dip, some of that may be temporary noise due to destocking and short-term slowdowns.
Bottom line? If you believe in India’s growing wine culture and Sula’s long-term story, the "ADD" rating suggests now might be a good time to pour it into your portfolio—just don’t expect fireworks right away.
But First, a Note of Caution
Before you go all-in on that stock order...
“This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report. Before making investment decisions, please read the full version including disclaimers.”
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