Thank you very much. We will now begin the question -and-answer session. The first question is from the line of Abneesh Roy from Nuvama.

My first question is on the opening remarks comment on the raw material. So, if in FY28, you expect softer raw material, I wanted to understand in the past, has there been a rational behavior by the competition because there can be incremental approach to get more market share because you still have a 50% plus market share in the overall mass end of the consumption in this segment. So, what has been the past behavior of the other players?

So, I'll take that. Of course, we don't have certainty in that. However, things start with the cost of the raw material, which obviously helps a lot in terms of controlling expenses. What we have seen over the past few years is that the volume of production of these wines has not been increasing that much. In fact, in a number of cases, we actually find that the volume of production is declining as some of these players learned that this is not a sustainable business. So, there's no point in crushing an excess amount of grapes and then almost giving it away. So, we are hopeful, but I must say that we cannot guarantee that. But it does look quite sure that the table grape prices are going to be at much lower levels than what we saw in harvest '26 when there was a huge spike, more than doubling of table grape prices compared to previous harvests.

Last question. If I see last 3, 4 years , your revenue is almost flat broadly in that INR 600 crore range. So, one, has the wine industry also been flat last 3, 4 years? And second, if we see the broader alco bev, something like white spirits is seeing very strong growth. Any long -term plans to diversify because in one segment risk is always on the higher side because clearly white spirit is a very high growth segment?

Yes, you are correct in that. The last 2 years have not seen much growth in the overall wine industry, neither in domestic nor in imports as per IWSR. So , after a real growth spurt in the 2 years following COVID, there has not been significant growth. There has been maybe low single-digit growth in the overall industry. The numbers are not that easy to get on a consolidated basis nationally.

We struggle sometimes to get the excise data from certain states, including our home state of Maharashtra, has not always been easy to get. But I think we can say that, yes, it has been a period of consolidation. Though I would say without looking across at white spirits that we are quietly hopeful that, that cycle of sort of de -stocking, etcetera, should have have bottomed out, and we should start seeing some at least low -level growth moving forward. We don't have any white spirit plans right now. However, we always have some plans or the other in the pipeline, and we hope to give more color to some very interesting new segment that we're looking at in the near future.

The next question is from the line of Aditya from CLSA.

So, a quick one. You indicated that obviously, the mix shifted more towards wine gapes from table grapes. So had the mix remained the same, would the gross margin have been better or worse? I just want to understand.

We would not have had the kind of increase in raw material costs that we have seen. That's for sure. So yes, we would have seen a better gross margin.

And then if that wa s the case and given that we are likely to reverse this again next year, so what's the upside in making this mix shift?

So, Aditya we might see some upside. But as of now, it would be too early to comment on it. But definitely, the negative impact won't be there from Q4 FY27.

Yes, definitely. I mean, it's very dependent on climate. But considering the fact that last year, the monsoon was almost 6 months long. It started in May. This year, because it started later in July, there's a very high probability that your grape prices are going to be much lower. Just to give some color here, where we have typically procured table grapes for less than INR 15-16 a kilo. Last year, grape prices shot up to INR 35 a kilo for table grapes. So, it was just a shade below what open market wine grapes were available for. So , we do expect that those grape prices would moderate to less than INR 20 a kilo this time. That's what we really have in our sights, which will definitely lead to a much better margin in terms of our Popular & Economy wines. Difficult to quantify, but definitely because this year, we have a large proportion of wine grapes in those blends, especially in any new blends we've made this year. So that is not what our strategic blend is. We've had to deviate from what I would call our long -term strategic blend where wines below INR 600 are made, which should be made almost exclusively from table grapes. And right now, some of those wines have al most 60%, 70% wine grape in them. So, you can do the math from that.

The next question is from the line of Nikhil from SiMPL.

My question was specifically toward s core markets. Now in both the core market s when we talk to others or we have the calls of other alcho -bev companies, they maintained the policies

that have come in Maharashtra for the Maharashtra-made liquor, and in Karnataka with respect to the new excise policies are quite beneficial in some way or the other to the company. So, while you say that the markets remained weak in Popular in Maharashtra and even in Karnataka, how do we attach what others are talking and what is happening for us? And is it specific to the category that the benefit others are talking about, we are not able to see?

I would answer that it's very specific to our category. Wine is quite different than spirits. So , when you're talking about MML, Maharashtra -made liquor in Maharashtra, obviously, the impact on spirits producers, either good or bad, has been quite dramatic in Maharashtra, where the government has brought out a policy that's very positive for the MML and maybe not as positive for non-MML. It's a dramatic shift there. Wine is completely outside that. So, I'd say probably wine, the impact will be felt more with the FTAs, etcetera. And even in Karnataka, the rebalancing based on the alcohol percentage for now, wine has not seen any changes. We continue to have the same excise regime that we had, for instance, 2 years ago.

So, but we would have a different excise policy, is that the case? It should be applicable to us as well, right, specifically for Karnataka. And in Maharashtra on the Popular side which we have outsourced we should also get some benefit for...

There is no change in terms of wine duty, not a single rupee. This policy in Maharashtra is very much targeted at spirits. MML is a purely spirit category. It has not to do with wine or beer for that matter. It is very purely about spirits.

And in Karnataka the realization would have come down or again, wine has a different way there?

Again, no change in the duties or taxes on wine. What did happen in Karnataka, which would impact all of us was that the beer prices have come down dramatically for the consumer. And , one of the things we have not mentioned here is the very hot summer and the delay of the monsoon - even in the month of June. So, a very hot June has been probably very beneficial for beer producers, not that great for other alco -bev and including wine in Karnataka as well as in Maharashtra. Probably there's been a fair amount of move over to beer during these months in these states and others.

Okay. and my last question in Karnataka in Q3, we had done this inventory destocking and cleaning of the channel. And in -- like Q4 w e said there is some improvement, Q1 we are saying again the market is not moving. So, what is exactly happening? Is it the category itself is facing pressure or is it specific to us. What's your reading?

Yes. Karnataka is unfortunate ly. All our other markets, I would say, are doing right now decently well. But we are being hit by the entire wine industry having seen degrowth in Q1 in Karnataka as well as in second half of FY26, we have seen degrowth. So, the entire wine category, unfortunately, has degrown in this all-important market. We have maintained or even

improved our market share in the market in terms of our Elite & Premium wines, not in terms of Popular & Economy where there are even in Karnataka, many players. And frankly, we have given up market share in Popular & Economy, probably gained a little bit of market share in Elite & Premium. And in Karnataka, we get a pretty decent data from the corporation. The entire category ha s seen degrowth, which we really hope will turn around in the near future. But yes, it's been a tough year in Karnataka.

The next question is from the line of Ayush from Consortium Securities.

Since Tourism is fastest growing segment, I wanted to understand what is the current capital employed in this business currently at 154 keys?

So, we don't look at Wine Tourism as a separate segment as such. It's very integral to the overall business. And so , there's no separate asset base or balance sheet for Wine Tourism as such. But just to give you some flavor, the Wine Tourism business has a better profitability, a better EBITDA margin versus the stand -alone Wine business. And so , you can accordingly expect -- you can accordingly estimate it to be better than the overall return ratios.

Sir any rough estimate on generally capex per room. What it takes if you want to build a new resort?

So, I would say that we have been quite fortunate that our Wine Tourism Strategy and spend has been very asset -light over the last couple of years. The new resorts that we are talking about, The Haven, for instance, those were not constructed by us. We have partners who construct the resorts, hand over to us on a management contract. So out of our 150 keys, 70 keys are ours, but we have not constructed anything since the last -- t least 3 or 4 financial years, anything . All the keys that have been added in the last 3 or 4 financial years have all been constructed by other parties, and then we take them on a management contract. Hence, we are not able to give you a very clear answer to your question here. Having said that, moving forward, we are looking at some possibility of perhaps investing in constructing on our own and that we are studying it right now.

Okay. Sir, just last question. Can you give some hint regarding the term of lease, like how long it is and what's the rent, expect something like that?

So typically, we don't sign anything for less than 10 years. So normally, it's a minimum of 10 years, some maybe even longer than that. And generally, then there are your normal covenants in terms of the number of years after which there's an increase per year and all quite standard.

The next question is from the line of from Sujeev, an Individual Investor.

Rajeev and Rinku, I have questions related to revenue numbers only, not on the cost optimization like EBITDA and net profit. Since after listing, why quarter 4 and quarter 1 are always decreasing?

When I took a plot of the last 7 years, so I want to know whether there will be improvement? Revenue from operation is from quarter 4 and quarter 1 is always decreasing and then it goes up. So, I want to know any like why these two quarters are worse for Sula?

Okay. There's a lot of seasonality in terms of our industry and consumption. It is very skewed towards Q3, that is all important. So normally, you would expect 25% revenue in each of the 4 quarters. But in our case, Q3 gets closer to 40%. So that's the way it is. So Q3 is generally our number one quarter. Q4 is normally second in terms of revenue. And then Q1 is usually quite far behind. So, there's a very clear seasonality, and that's the way it works.

Okay. But Rajeev, other than wines I mean, Sula, does it sell white spirits or something else? Because last year there was some talk of taking over some spirits business. Is that correct or wrong?

To answer your question, we have not taken over any spirits brand in the last FY. We are completely into wine business.

Madam, this second question is related to Wine Tourism only. Now given the growth in Wine Tourism is in double digits, congrats for that. But what I want to know going forward, since Rajeev, as you mentioned, just now you have acquired a new wine facility somewhere by another MNC, will that be a Wine Tourism?

Yes, I'll take that question. It's very much both. So, it's a beautiful production facility, and we will be, as I mentioned, starting wine production there from this upcoming harvest that is Harvest 2027. And it is also a beautiful facility for wine tourism. So already, we took over an already beautifully constructed facility that was already welcoming visitors. Our aim would be to enhance that and expand that. But what we've taken over already from day 1 that we took over the keys or maybe you can say day 2 after a deep clean, we have already started welcoming visitors to our new facility of Domaine RASA, which is the Erstwhile Chandon, which is just about a 20-minute drive from Nashik Airport. And we note tha t once again, after the monsoon, we are expecting a good expansion of flight routes from Nashik as well as Shirdi. In fact, IndiGo has just announced a second daily flight from Delhi to commence in October, so that’s very good news. And so , this will be for people landing at that airport, if they want to have the quickest, the nearest high-quality Wine Tourism destination, it will be our Domaine RASA, erstwhile Chandon.

Rajeev, two more questions. First question is other than Nashik Sula Vineyard has also a wine facility in Karnataka. In Karnataka, do we have Wine Tourism or not? Second question, the upcoming Kumbh Mela in Nashik, will it benefit wine tourism especially our resorts business in 2026 and 2027?

So, we have our Domaine Sula facility outside Bangalore. That's the one you're referring to. And we very much have a nice Wine Tourism offering there. We would have preferred to have

expanded that further. We have struggled a little bit with getting the permissions for building out a resort there. However, I would like to say that we are now hearing much more positive noises from the current government in Karnataka, and we are hoping to have a breakthrough there to get the permission to put up a nice resort there. So , we are hoping for that. We already have a tasting room and a restaurant, but we believe we can do much better in Karnataka. And in terms of Kumbh Mela, we certainly hope with cautious optimism that it should be very good, not just for our tourism and our properties, but also for the entire Nashik region in terms of the entire hospitality and F&B. Having said that, we do need to work with the authorities to make sure that things are not too strict as has happened in the past, I must be quite candid in that. And we hope this time around, it should be hopefully a different story than last time when it was, frankly, a bit disappointing finally for all the tourism and F&B business of Nashik because some of the conditions were so strict that a lot of people just decided not to enter Nashik. So hopefully, this time, it will be a little bit gentler approach, and we are definitely gearing up. A lot of good infrastructure work also going on in and around Nashik, which should also ease the time taken to reach our places from, say, Mumbai, Thane, Pune, basically driving in is going to be vastly improved. So , fingers crossed, looking forward to some good benefits from Kumbh Mela. Thank you very much.

Ladies and gentlemen, that was the last question for today. I would now like to hand over t he conference to Mr. Mandar Kapse for his closing comments. Over to you, sir.

Thanks, everyone, for joining this call. And if you have any further questions, you can reach out to us

Thank you. On behalf of Sula Vineyards Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.