Core Viewpoint - Sula Vineyards experienced a nearly 10% decline in third-quarter revenue due to tactical destocking in response to lower demand in Karnataka, its second-largest market [1][2]. Revenue Performance - The company reported a 9.7% decrease in revenue from operations, amounting to Rs1.96 billion ($21.6 million) in the fiscal 2026 third quarter [1]. - Net income fell by 67.6% to Rs91 million during the same period [2]. - EBITDA decreased by 39.8% to Rs320 million, with the earnings margin dropping 816 basis points to 16.3% [2]. Market Insights - Karnataka, being the second-largest market for Sula Vineyards, faced subdued demand, prompting the company to undertake tactical destocking to optimize working capital [2][3]. - The own brands division, which includes The Source and Rāsā, saw a significant revenue drop of 12.9%, totaling Rs1.7 billion [3]. Growth Areas - The Wine Tourism unit provided some offset to the decline in own brands, with sales increasing by 33.6% in the third quarter to Rs220 million and up 22.4% in the nine months to Rs490 million [4]. - The CEO indicated that the tourism division is becoming an increasingly important growth frontier for the company [4]. Future Outlook - The company expressed confidence in achieving a healthy recovery, stating that revenue and profitability have likely bottomed out in Q3, with improved demand conditions in key markets, excluding Bengaluru [5]. - Plans for expanding the resort portfolio, including a new project in Nashik, were highlighted as part of the growth strategy moving forward [5].