Sula Vineyards Q2 FY27 Results (NSE: SULA)
Signal: Steady quarter
The read
The quarter marks a revenue recovery to ₹145.44 crore, up 4.1% YoY after several quarters of weak growth, but the core issue remains margin: gross margin contracted 298bps YoY to 61.7%, continuing the prior margin-compression arc despite PAT rising 34.4% to ₹8.09 crore.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹145.44 Cr | +4.1% | +20.4% |
| Net profit | ₹8.09 Cr | +34.4% | |
| EPS | ₹0.95 | +33.8% | |
| EBIT margin | N/A |
P&L walk
Consolidated revenue increased to ₹145.44 crore, up 4.1% YoY and 20.4% QoQ, but gross margin fell to 61.7% from 64.7% YoY as direct-cost intensity increased; PAT nevertheless rose 34.4% YoY to ₹8.09 crore on higher operating scale and lower finance costs.
Segments
There is no reportable segment table, but standalone PAT of ₹6.14 crore was 75.9% of consolidated PAT of ₹8.09 crore, indicating subsidiaries contributed ₹1.95 crore of incremental group profit.
Key positives
- Consolidated revenue reached ₹145.44 crore, up 4.1% YoY and 20.4% QoQ, reversing the prior quarter's lower revenue base.
- PAT increased 34.4% YoY to ₹8.09 crore despite gross-margin compression, supported by finance costs falling 16.3% YoY to ₹7.16 crore.
- Employee, selling and other operating expenses declined 1.1% YoY to ₹62.19 crore while revenue grew 4.1%, improving operating cost intensity.
- Standalone PAT rose 94.9% YoY to ₹6.14 crore, while subsidiaries contributed a further ₹1.95 crore to consolidated PAT.
Key concerns
- Gross margin fell 298bps YoY to 61.7%, with direct costs rising to 38.3% of revenue from 35.3% YoY; the filing does not provide a specific cause.
- Revenue growth of 4.1% YoY remains below the company's earlier growth trajectory, despite the 20.4% QoQ seasonal recovery.
- Net debt increased to ₹304.00 crore from ₹284.70 crore at 31 March 2026, while cash and cash equivalents declined to ₹2.90 crore from ₹7.19 crore.
- Operating cash flow was only ₹4.90 crore in H1FY27 against consolidated PAT of ₹9.15 crore, indicating weak cash conversion during the half-year.
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