Other income exceeded pre-tax profit in Sula's Q1FY27
Interest of Rs 7.18 cr and depreciation of Rs 10.28 cr reduced a Rs 16.60 cr operating profit to Rs 1.06 cr of consolidated net profit.
Filed 06 Aug 2026, 17:29 IST · after market close · SULA (SULA)
Key takeaways
- Other income of Rs 2.38 cr exceeded consolidated pre-tax profit of Rs 1.52 cr, highlighting weak earnings quality.
- Direct-to-consumer wine sales grew 7% YoY in Q1FY27, while Wine Tourism recorded double-digit growth from room revenue and higher guest spending.
- Management said the 5,000-square-foot Events Pavilion is due before the festive season, alongside other planned tourism additions.
Interest and depreciation sharply reduced operating earnings
Sula's consolidated operating profit of Rs 16.60 cr was reduced by Rs 7.18 cr of interest and Rs 10.28 cr of depreciation, leaving profit before tax at Rs 1.52 cr. Net profit was Rs 1.06 cr, with EPS at Rs 0.13. The 14.71% operating margin did not translate into a similar level of pre-tax profitability because financing and non-cash asset charges were large relative to operating profit.
Other income was larger than reported pre-tax profit
Other income of Rs 2.38 cr exceeded consolidated pre-tax profit of Rs 1.52 cr, so reported profit was not driven only by the operating business. The 30.26% tax rate further reduced profit after tax. This makes operating earnings and the conversion of operating profit into pre-tax profit the key quality markers for the quarter.
Wine Tourism and direct sales supported the quarter
Management said Wine Tourism delivered double-digit growth in Q1FY27, led by room revenue and higher spending per guest, while direct-to-consumer wine sales rose 7% YoY. The company said Karnataka remained soft but expects it to improve in the second half of FY27. Management also said Domaine Rāsa's tasting room, bottle shop and banquet facilities began operating in July 2026, with winery operations scheduled to start in Q4 FY27.
Expansion plans are focused on tourism revenue
Management said the Domaine Dindori wine shop is planned for August 2026 and that the flagship campus amphitheatre expansion was completed in July 2026. The company also said a 5,000-square-foot Events Pavilion is being constructed for opening before the festive season. Management expects these additions to increase Wine Tourism revenue in the second half of FY27.
Results were filed after market close
Sula filed its consolidated Q1FY27 results after market close at 17:29 IST on 6 August 2026. The immediate read-through is therefore the earnings quality and the company's operating commentary rather than a same-session stock reaction.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 |
|---|---|
| Revenue | ₹113 cr |
| Other income | ₹2 cr |
| Expenses | ₹96 cr |
| Operating profit | ₹17 cr |
| Operating margin (%) | 14.71% |
| Interest | ₹7 cr |
| Depreciation | ₹10 cr |
| Profit before tax | ₹2 cr |
| Tax | ₹0 cr |
| Net profit | ₹1 cr |
| EPS (₹) | ₹0.13 |
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Wine Tourism recorded double-digit growth in the first quarter of FY27, driven by room revenue and higher guest spending.
- Direct-to-consumer wine sales grew 7% year over year in the first quarter of FY27.
Guidance & outlook
- Sula expects Karnataka to improve in the second half of FY27.
- The company aims to accelerate earnings growth from FY26 to FY29 through improved EBITDA margins and capital efficiency.
- Sula expects planned additions to increase Wine Tourism revenue in the second half of FY27.
Expansion
- Domaine Rāsa's tasting room, bottle shop and banquet facilities commenced operations in July 2026.
- Winery operations at Domaine Rāsa are scheduled to commence in Q4 FY27.
- Sula completed the flagship campus amphitheatre expansion in July 2026 and plans to open the Domaine Dindori wine shop in August 2026.
- Sula is constructing a 5,000-square-foot Events Pavilion at its flagship campus for completion before the festive season.
New products
- Sula's portfolio includes more than 60 labels across 14 brands.
New initiatives
- Sula launched The Source Grenache Red in the first quarter of FY27.
Problems & risks
- Karnataka remained soft during the quarter, although Sula expects improvement in the second half of FY27.
What to watch
- Whether consolidated operating margin moves from the Q1FY27 level of 14.71%.
- Whether direct-to-consumer wine sales retain the 7% YoY growth reported in Q1FY27.
- Progress on the 5,000-square-foot Events Pavilion and its contribution to Wine Tourism revenue.