Indian wine company Sula Vineyards saw third-quarter revenue drop nearly 10% due to "tactical destocking" against a backdrop of lower demand in Karnataka state.
Disclosing its results on Friday (6 February), the Dindori Reserve brand owner said it recorded a 9.7% decline in revenue from operations to Rs1.96bn ($21.6m) in its fiscal 2026 third quarter.
The hit to revenue was driven by "one-time tactical destocking in Karnataka to correct channel inventory and conserve working capital amid subdued demand in the region", Sula Vineyards said.
Net income in the period slid 67.6% to Rs91m.
The company's EBITDA declined 39.8% to Rs320m in the most recent quarter. Its earnings margin dropped 816 basis points to 16.3%.
Karnataka is the company's second-largest market after Maharashtra.
Rajeev Samant, CEO at Sula Vineyards, said: "Q3 was a challenging quarter, with performance primarily impacted by one-time tactical destocking undertaken in Karnataka, our second-largest market with the objective to right-size channel inventory and optimise working capital amid subdued demand in Bangalore. Excluding the one-time destocking impact, our Q3 revenue was in-line with last year."
The group's own brands, which include The Source and Rāsā, saw the largest sales drop in the quarter, with revenue down 12.9% at Rs1.7bn.
In the first nine-months of its 2026 financial year, revenue for its own brands division declined 9.3% to Rs4bn.
The group's Wine Tourism unit slightly offset the own brands' weakness, with sales increasing 33.6% in the third quarter to Rs220m, and up 22.4% in the nine-months at Rs490m.
Samant said the group's tourism division was "becoming an increasingly important growth frontier for us".
Looking ahead, the chief executive said the group was confident on achieving "a healthy recovery".
He added: "Overall, we believe revenue and profitability have bottomed out in Q3 with better days ahead. Demand conditions have improved meaningfully across key markets, barring Bengaluru. We are progressing on expanding our resort portfolio, with an exciting new project in Nashik in the works. Going forward, we are optimistic of a healthy recovery supported by rebound in Own Brands and continued strong growth in Wine Tourism."
