Sula Vineyards Limited

Consumer Defensive — Beverages - Wineries & Distilleries · NSE

₹136.28−₹1.98 (−1.43%)

DalalBaazaar Score

39 / 100

🔴 Weak

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of Sula Vineyards Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sula Vineyards Limited manufactures, purchases, and sells wine and other alcoholic beverages in India and internationally. It offers white, red, rosé, and sparkling wines; and spirits under the RASA, The Source, Dindori, SULA CLASSICS, and York brands.

IndustryBeverages - Wineries & Distilleries

SectorConsumer Defensive

Employees713

Annual revenue₹508 Cr

How does it make money?

Turns over ₹508 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 713 employees supports ₹71.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹71.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.1% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE51.0%

What is the outlook?

3 analysts covering the stock expect revenue to grow about 16.7% and earnings to grow about 50.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+16.7%

Est. earnings growth+50.0%

Analysts3

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +8% while net margin moved -72% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+8%

Margin effect-72%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 2.6% — barely ahead of inflation
✗ Profit has declined at 32.7% a year
✗ Profit fell 43.5% in the latest year

Quality vs. Valuation

Company Quality

39/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

43/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

46.4x

3Y Median

37.7x

40 monthly readings · mean 36.5x · range 16.7x–65.2x

Sector Median

43.3x

median of 4 sector peers

⚠️Current valuation is approximately 23% above its 3y median of 37.7x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 43.3x.

vs. its own history

Expensive

37.7x median over 40 months · +23%

vs. sector peers

Fair

43.3x median of 4 peers · +7%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

14.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 230% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 15.8% to 4.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 21.8% to 9.1% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 64% over 3 years, from ₹203 Cr to ₹333 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 13.2 points, from 33.8% to 20.7%.
🔴Receivables growing faster than salesFinancial
Receivables up 107% against revenue up 8% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 4.2x to 2.2x.
🟡Profit is decliningFinancial
Net profit is down 69% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 33.8% to 20.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 107% against revenue up 8%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 23% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 2.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 19%✓ 20.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 2.6% CAGR
Latest reported year was 3.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹69 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹1,151 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

46.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.96x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.94

Profitable

Profitable on a per-share basis

ROE

4.4%

Weak

Weak capital efficiency

ROCE

9.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.57x

Low

Conservative leverage

Revenue Growth (YoY)

3.0%

Modest

Modest growth

Profit Growth (YoY)

-43.5%

Falling

Profits are shrinking

Dividend Yield

1.47%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹69 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

20.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

5.6%

Average

Average margins

Net Margin

4.4%

Average

Average bottom-line conversion

Current Ratio

1.43

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.40

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

134.0 / 141.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

52.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹471 Cr	₹518 Cr	₹525 Cr	₹508 Cr	+2.6%
EBITDA	₹159 Cr	₹182 Cr	₹150 Cr	₹105 Cr	-13.0%
EBITDA Margin	33.8%	35.1%	28.7%	20.7%	—
PAT (Net Profit)	₹84 Cr	₹93 Cr	₹70 Cr	₹26 Cr	-32.7%
EPS	₹10.18	₹11.05	₹8.32	₹3.04	-33.2%
ROE	15.8%	17.0%	12.0%	4.4%	—
ROCE	21.8%	23.4%	16.6%	9.1%	—
Total Debt	₹203 Cr	₹324 Cr	₹315 Cr	₹333 Cr	+18.0%
Free Cash Flow	₹21 Cr	₹62 Cr	-₹9 Cr	₹69 Cr	+48.8%

🟢 Revenue has grown at 2.6% a year over 3 years.

🔴 EBITDA has shrunk at 13.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 33.8% to 20.7% over 3 years (-13.2 pts).

🔴 PAT (Net Profit) has shrunk at 32.7% a year over 3 years.

🔴 EPS has shrunk at 33.2% a year over 3 years.

🔴 ROE has fallen from 15.8% to 4.4% over 3 years (-11.4 pts).

🔴 ROCE has fallen from 21.8% to 9.1% over 3 years (-12.7 pts).

🔴 Total Debt has grown at 18.0% a year over 3 years.

🟢 Free Cash Flow has grown at 48.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,096 Cr

Total Liabilities

₹508 Cr

Cash & Equivalents

₹7 Cr

Operating Cash Flow

₹101 Cr

Capex

-₹32 Cr

Shareholding (proxy)

Institutional Holding

16.5%

Insider Holding

28.4%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

22 May 2026

Analyst Consensus

Recommendations

1 Buy · 2 Hold · 0 Sell

Target Price (Mean)

₹160

+17.4% vs CMP

Target Range

₹155 – ₹165

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

2 positive3 mixed1 negative

Sula Vineyards (NSEI:SULA) Stock Forecast & Analyst Predictions

Simply Wall Street, 07 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Sula FY26: Q4 Revenue Up 7%, Tourism Hits INR 100 Cr

scanx.trade, 15 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Why Is Sula Vineyards Share Price Falling Key Reasons 2026

Univest, 06 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Earnings call transcript: Sula Vineyards posts Q1 2026 revenue beat, shares fall

Investing.com, 07 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

India’s Sula Vineyards posts profit drop on weak demand, higher costs

Yahoo Finance Singapore, 06 FebResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Sula Vineyards Q1 profit falls 45% as higher grape costs pressure margins, revenue up 3%

CNBC TV18, 06 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Risk

WeakBusiness Quality · Growth · Profitability · Valuation

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑