Sula Vineyards’ wine tourism pops cork on record highs as own-label sales flatline in Q4

Sula Vineyards Limited, India’s largest wine company by market share, delivered a mixed performance in the fourth quarter of FY25, with revenue from operations edging up by just 0.7% year-on-year to ₹132.6 crore. While own-brand wine sales dipped slightly, a booming wine tourism segment powered by higher visitor spending and events like SulaFest’25 led the charge, helping the company achieve its highest-ever annual revenue of ₹618.8 crore.

The Nashik-headquartered winemaker, which commands over half of India’s domestic wine market, revealed that while its core business showed only modest growth in FY25, it is banking on rising tourism revenues, premium product placements, and strong grape harvests to fuel momentum into FY26. The company continues to position itself at the intersection of lifestyle, hospitality, and beverages—an approach that is increasingly paying dividends as wine tourism gains prominence in India’s evolving leisure economy.

How did Sula Vineyards perform across key business verticals?

Sula’s wine portfolio under its own labels brought in ₹109.6 crore during Q4 FY25, compared to ₹112.9 crore in the same period a year earlier—a 2.9% year-on-year decline. However, for the full financial year, the segment saw a slight uptick of 2.2% to ₹546.2 crore. Company data show a divergent trend within the segment, with the Elite category—comprising premium wines—rising by 8% even as the broader premium and elite portfolios remained flat overall.

Conversely, wine tourism revenues surged to ₹20.4 crore in Q4 FY25, representing a 24.6% increase over the ₹16.4 crore earned in Q4 FY24. For the full year, the wine tourism business recorded 10.2% growth, touching ₹60.3 crore. This line includes income from Sula’s luxury resort, fine dining restaurants, and branded merchandise, excluding direct wine sales.

The company attributed this record growth to a combination of strong occupancy rates, elevated guest spending, and the successful execution of SulaFest’25, its flagship music and wine festival held in Nashik. These results reinforce the role of wine tourism as a key revenue generator for the company, especially amid fluctuating demand in its core wine segments.

What strategic milestones did Sula achieve in Q4 FY25?

Sula achieved several notable product and distribution milestones in the final quarter of FY25. The most prominent among them was the successful listing of four new wines—Dindori Reserve Shiraz, RASA Syrah, The Source Grenache Rosé, and Sula Riesling—with the Canteen Stores Department (CSD), a central procurement entity catering to Indian defense forces. This development concluded a lengthy two-year approval process and expanded Sula’s CSD wine offerings to a total of nine.

The first batch of these newly listed wines was shipped in March 2025, marking a step toward stronger government channel sales in FY26. The CSD has increasingly become a reliable channel for premium Indian wine brands, and Sula remains the category leader in both volume and portfolio breadth.

Another milestone for brand visibility came from the skies—literally. Sula’s canned wines, including the Chenin Blanc, Zin Red, and Zin Rosé, have been introduced on IndiGo‘s international business class menu. This partnership, in alignment with IndiGo’s global route expansion, is expected to give Sula’s premium ready-to-drink formats global exposure, particularly among business and leisure travellers who represent the next wave of Indian wine consumers.

How is Sula positioned for FY26 following the harvest?

Sula also reported a successful grape harvest for the fifth consecutive year, with both quality and quantity surpassing expectations. This consistency in raw material sourcing is a strategic advantage for a wine producer operating in a market where weather volatility can significantly impact yield and product quality. Strong harvest outcomes enable the company to maintain stable input costs and prepare for further volume expansion, particularly in fast-growing segments like premium wines and canned beverages.

With the supply chain aligned and new distribution channels activated, Sula appears to be entering FY26 on solid operational footing, despite subdued sales in some legacy wine segments.

What does the stock market think of Sula Vineyards’ performance?

As of April 11, 2025, shares of Sula Vineyards (NSE: SULA) were trading at ₹275.50, reflecting a 3.21% rise from the previous close. However, the broader picture shows that the stock has declined by approximately 50.78% over the past year. This sharp underperformance relative to major indices suggests tempered investor confidence, even as the company posted its highest-ever annual revenue.

Sula’s market capitalisation currently stands at ₹22.53 billion, representing a 48.75% year-over-year contraction. Despite this, analyst sentiment remains cautiously optimistic. The average 12-month price target stands at ₹364.75, implying a potential upside of nearly 32% from current levels. Around 75% of analysts tracking the stock recommend a ‘Buy’, with the rest suggesting a ‘Hold’.

Valuation metrics indicate that Sula trades at a Price-to-Earnings (P/E) ratio of 31.86 and a Price-to-Book (P/B) ratio of 4.1—levels that reflect a premium for a branded consumer company with a niche market presence. Return on Equity (ROE) has improved to 16.96% for the latest fiscal year, underscoring capital efficiency despite volume pressure.

Ownership patterns offer additional context. Promoter holding fell to 24.66% as of December 31, 2024, while institutional investors—both foreign and domestic—have trimmed their stakes to 9.61% and 19.89%, respectively. These trends suggest cautious positioning by large investors amid the stock’s extended correction.

Is Sula Vineyards a buy, sell, or hold?

Based on current fundamentals, Sula Vineyards may be well-positioned for a long-term re-rating. The company’s hybrid model of wine production, tourism, and hospitality creates a diversified revenue base that can cushion against cyclical weakness in discretionary consumer spending. With forecasted annual earnings growth of 16% and revenue growth of 9.3% over the next few years, the brand is poised to benefit from evolving Indian consumption trends.

Investors with a longer-term horizon may consider taking a ‘Buy’ position, particularly if wine tourism continues to grow as a mainstream lifestyle segment. However, given the recent stock underperformance and flat brand sales in Q4, more risk-averse investors may prefer a ‘Hold’ stance until clearer signs of acceleration emerge in premium wine sales or international distribution.