Core Viewpoint - Sula Vineyards has signed a deal to acquire wine production assets from Moët Hennessy, specifically the Chandon wine production facility in Nashik, Maharashtra, which includes land, buildings, and winemaking infrastructure, but excludes brand-related assets [1][3] Group 1: Acquisition Details - The acquisition includes a 19-acre estate with a winery capacity of 450,000 litres per year, which can be expanded to 1.3 million litres, along with a visitor center and five acres of vineyards [2] - The deal is expected to close by the end of the first quarter of Sula Vineyards' 2027 financial year, which began in March [4] Group 2: Impact on Operations - Following the acquisition, Chandon will cease wine production in India, and Sula Vineyards will sell the wine produced at the estate under its own labels, including Rasa, The Source, and Dindori Reserve [3] - The acquisition is seen as a strategic move to strengthen Sula Vineyards' presence in Dindori, known for its high-quality wine grapes, and to enhance its wine tourism business [4] Group 3: Financial Performance - Sula Vineyards reported a 9.7% decline in revenue from operations to Rs1.96 billion ($21.6 million) in the third quarter of fiscal 2026, attributed to tactical destocking amid weaker demand in Karnataka [5] - Net income for the period fell by 67.6% to Rs91 million, and EBITDA decreased by 39.8% to Rs320 million, with the earnings margin dropping 816 basis points to 16.3% [6]

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].