FratelliVineyard — Q4 FY26 earnings call

Call held 2 Jun 2026

Management summary

Fratelli Vineyards Limited reported a strong Q4 FY26 with 13% revenue growth and operating profit breakeven, driven by cost discipline and market normalization. However, full-year FY26 revenue was largely flat due to H1 regulatory disruptions. The company's premiumization strategy and new RTD business showed robust growth, and management is targeting 30% revenue growth and PAT breakeven for FY27.

Highlights

  • Q4 FY26 revenue increased to INR36 crores, representing a growth of approximately 13% year-on-year.

  • Achieved breakeven at the operating profit level, reporting a positive EBITDA of INR1.06 crores in Q4 FY26.

  • Gross profit for Q4 FY26 stood at INR29 crores, with gross margins improving to 79% versus 73% in Q4 FY25.

  • Luxury category sales grew 15% year-on-year in FY26, with the flagship brand J'NOON growing at an enviable 44%.

  • RTD brand Shotgun sold approximately 100,000 cases in its first year, establishing presence across 18 states, and is targeting to double sales in FY27.

Concerns

  • Full year FY26 revenue remained largely flat (1% YoY growth to INR184 crores) due to regulatory disruptions in key markets and excise policy changes in H1 FY26.

  • Premium portfolio revenue declined 16% year-on-year in FY26, primarily due to regulatory disruptions in H1.

  • The hospitality project, with an estimated investment of INR70-80 crores, has been deferred by about a year to prioritize core business.

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹36 Cr
    YoY +13%
  • EBITDA
    ₹1.06 Cr
  • Gross Margin
    79%

FY26

  • Revenue
    ₹184 Cr
    YoY +1%
  • EBITDA
    ₹1 Cr

What they filed

Q1 FY27: revenue up 22.5%, net profit up 36.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue62 58 32 37 46 −26%64 +10%35 +11%45 +22%
EBITDA1 -0 -11 -3 1 +5%-1 −31%-5 +54%0 +110%
Net profit-3 -3 -11 -6 -3 −14%-9 −215%-7 +36%-4 +37%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Luxury Category
    15% Sales Growth
  • J'NOON Brand
    44% Sales Growth
  • Premium Portfolio
    -16% Revenue Decline
  • RTD Segment (Shotgun)
    ₹18 Cr Revenue
  • Premium & Above Portfolio
    70% Contribution to Revenue

Capital allocation

medium confidence
  • Capex ₹9 Cr
    • Vineyard infrastructure, plant and machinery, and other operational infrastructure (FY26) ₹10 Cr
    • Routine and strategic capex (FY27) ₹9 Cr
    • Hospitality project (estimated, deferred) ₹70 Cr
    During FY26, we completed approximately INR10 crores of capex across Vineyard infrastructure, plant and machinery and other operational infrastructure. These investments are undertaken with a view to strengthen our production capabilities, enhancing efficiencies and preparing the business for future growth opportunities as the domestic wine market continues to evolve. For FY27, we have, however, earmarked approximately INR9 crores towards routine and strategic capex requirements. In addition, our hospitality project remains in the planning stage with an estimated investment of INR70 crores to INR80 crores. We will continue to evaluate this project in line with market opportunities and our long-term growth strategy.
  • Debt Debt disclosed
    Depreciation and finance costs were higher during FY26 due to the commissioning of new assets and borrowings undertaken for capacity expansion and working capital requirements.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY27 · High confidence 30%
    So, our plan and our guidance for this financial year of FY27 is to deliver a growth of approximately 30%.

    — Aditya Sekhri

  • Exports as % of total revenue Revenue · FY27 onwards · High confidence 5%
    We expect 5% of total revenue to come from exports from FY '27 onwards.

    — Gaurav Sekhri

  • Long-term Revenue Revenue · by 2030 · Medium confidence INR500 crores
    you have outlined a long-term aspiration of reaching around INR500 crores of revenue by 2030 and growth at 20% CAGR.

    — Preeti Shah

Profitability

  • PAT Breakeven Profitability · FY27 · High confidence Achieved
    we believe PAT breakeven will be achieved.

    — Aditya Sekhri

  • Net-Net Breakeven Revenue (PAT) Profitability · FY27 · High confidence INR240 crores
    we achieve a net-net breakeven at around INR240 crores.

    — Gaurav Sekhri

Volume

  • RTD Sales Volume Volume · FY27 · High confidence 200,000 cases

    From 100,000 cases today

    our expectation is that in the year 2, which is FY27, we will double this business to cross 200,000 cases.

    — Gaurav Sekhri

Distribution

  • RTD Distribution Outlets Distribution · H2 FY27 · Medium confidence >15,000

    From 9,000 outlets today

    Shotgun has just had its first year in the market with naturally the registrations happening on a cyclical basis and not in one-go for all states. Therefore, we see this number ideally going above 15,000 by close to H2.

    — Aditya Sekhri

Margin

  • Gross Margin Band Margin · next few years · High confidence 76-80%
    our overall gross margins will be between 76% to 80%.

    — Aditya Sekhri

What to watch in Q1 FY27

FY27 Revenue Growth

Next quarter (Q1 FY27)
Current 13% YoY in Q4 FY26, 1% YoY in FY26
Target 30% YoY growth for FY27

Why it matters

Key indicator of recovery from regulatory disruptions and success of new growth drivers.

So, our plan and our guidance for this financial year of FY27 is to deliver a growth of approximately 30%.

Risks & concerns

  • Regulatory disruptions in key markets (Maharashtra, Telangana, Uttarakhand, Delhi)

    medium

    Caused revenue to be largely flat in FY26 and 16% decline in premium portfolio in H1 FY26, but conditions are now normalizing.

    Management acknowledged

  • Competition from foreign winemakers due to Free Trade Agreements (FTA)

    low

    Management believes impact will be minimal as >90% of revenue is from wines <INR2,000 MRP, and premiumization momentum is strong.

    Analyst downplayed

  • El Nino effect / adverse weather conditions impacting agricultural inputs

    low

    Company has backward integration with own vineyards and drip irrigation, feels comfortable. Acknowledges extreme weather could impact but current situation not a major concern.

    Analyst downplayed

Q&A highlights

8 direct
Roadmap for PAT profitability and key milestones for FY27. Direct
So, our plan and our guidance for this financial year of FY27 is to deliver a growth of approximately 30%. With that in line, and as I mentioned, with the operating efficiencies coming into play, we believe PAT breakeven will be achieved.

Directly addresses the company's path to overall profitability, a key investor concern after achieving operating breakeven.

Asked by Deepesh Sancheti

Addressable market opportunity for RTD beverages and wine-in-a-can products in India and consumer adoption. Direct
So the RTD market with respect to wine is approximately between INR500 crores to INR600 crores. It is one of the fastest-growing segments across any alcobev category at the moment with a growth of about 25% year-on-year.

Provides context on the size and growth potential of a new, significant business segment for the company.

Asked by Deepesh Sancheti

Impact of FTA and foreign competition on the wine segment, especially for luxury wines. Direct
On the wine segment, more than 90% of our revenues are comprised of products which are less than INR2,000 MRP. The impact which will come will be on our wines or part of our portfolio, which is above INR2,000. However, as we see that the premiumization momentum continues to grow, in fact, our luxury and super premium brands have been growing the fastest.

Addresses a potential competitive threat from FTAs and management's strategy to mitigate it by focusing on premiumization and core segments.

Asked by Deepesh Sancheti

Current market share in the premium and luxury wine segments. Direct
So our market share currently is 30% on the premium side. If you just look at the luxury market share, then our market share is more than 50%.

Quantifies the company's strong leadership position in its target premium and luxury segments.

Asked by Deepesh Sancheti

Capex requirements for FY27 and the status of the hospitality project. Direct
So firstly, on capex, our expectation is our capex in FY27 will be between INR6 crores to INR10 crores. I don't see us spending any more than that in capex. And in regards to hospitality, we continue to believe it to be a good fit to our business. However, we have given priority to our RTD project and some other wine-related projects because at the heart and core, we are a wine business. We are not a hospitality company. So therefore, we have, for the time being, just deferred the hospitality plan by about a year and we will review it maybe in H2 this year and possibly take some definitive steps to action and initiate it in calendar year '27-'28.

Clarifies future capital expenditure plans and the strategic prioritization of core business over the hospitality venture, impacting long-term growth and capital allocation.

Asked by Deepesh Sancheti

Impact of El Nino effect on rainfall, product pricing, and agricultural inputs. Direct
We are, as of now, comfortable with the way we have integrated the business backwards and forwards. We have our own vineyards, our vineyards have drip irrigation. So we are sitting comfortable as of now. I mean weather is in no one hands. If there is some extreme weather condition, then, of course, we will get impacted as well. But last year, the excessive rainfall we had, we dealt with it quite effectively. Of course, it had some impact on higher cost and better management for disease management. But I don't see current weather situation to be of any major concern. We will continue to watch it closely.

Addresses a potential climate-related risk to agricultural inputs and supply chain, and management's preparedness.

Asked by Deepesh Sancheti

Long-term aspiration of reaching INR500 crores revenue by 2030 with a 20% CAGR. Direct
Our growth drivers are our focus on premiumization, our new product innovation and launches, RTD segment, which is a whole new category, that we have now entered and begun catering to, and made a substantial mark in it already in year 1 and increasing the width of our distribution. So, this is what will drive growth for us.

Explains the strategic pillars supporting the ambitious long-term growth target, providing insight into future direction.

Asked by Preeti Shah

Contribution and future expectations from the CSD channel. Direct
So, our market share in CSD is approximately 45%, and has been one of the strongest growth engines for the company post-COVID. This year, with the introduction of the Wine-in-a-Can segment, we will see further traction... CSD will become another great growth driver for us. It already contributes about 8% of our overall revenues, and I see this number only growing going forward.

Highlights a significant and growing distribution channel and its strategic importance for the company's revenue growth.

Asked by DVM Teja

2 min read 7 chapters

Detailed narrative

Q4 FY26 Performance Overview

Fratelli Vineyards Limited closed Q4 FY26 on a strong note, achieving a 13% year-on-year revenue growth to INR36 crores, up from INR32 crores in Q4 FY25. The company reached operating profit breakeven, reporting a positive EBITDA of INR1.06 crores, a significant improvement from a loss of INR7 crores in the prior year. Gross margins expanded to 79% from 73%, driven by cost discipline and improved operating efficiencies.

Full Year FY26 Performance and Challenges

For the full fiscal year 2026, revenue remained largely flat, growing by only 1% year-on-year to INR184 crores from INR181 crores in FY25. This modest growth was primarily attributed to regulatory disruptions in key markets like Maharashtra and Telangana, and excise policy changes in Uttarakhand during the first half of the year. Despite these headwinds, full-year EBITDA marginally improved to INR1 crore, reflecting benefits from operational efficiencies.

Premiumization Strategy and Portfolio Performance

The company's premiumization strategy continued to yield results, with the Premium & Above portfolio contributing over 70% of total revenue in FY26. The luxury category, defined as wines above INR2,000 MRP, grew 15% year-on-year, significantly boosted by the flagship J'NOON brand which saw a 44% growth. However, the overall premium portfolio experienced a 16% year-on-year decline due to the H1 regulatory disruptions, which have since normalized.

RTD Business Growth and Expansion

Fratelli's new Ready-To-Drink (RTD) brand, Shotgun, launched in H1 FY26, demonstrated strong consumer acceptance, selling approximately 100,000 cases in its first year and contributing roughly INR18 crores to the top line. The company plans to double RTD sales to 200,000 cases in FY27 and expand its distribution footprint from 9,000 outlets to over 15,000 by H2 FY27. New variants are also planned for Q1 FY27.

Capital Expenditure and Future Investments

The company completed approximately INR10 crores in capex during FY26, primarily for vineyard infrastructure, plant, and machinery. For FY27, INR9 crores is earmarked for routine and strategic capex. A planned hospitality project, estimated at INR70-80 crores, has been deferred by about a year to prioritize core wine and RTD businesses, with a review expected in H2 FY27.

FY27 Outlook and Growth Drivers

Fratelli Vineyards targets a 30% revenue growth for FY27, aiming for PAT breakeven, supported by operating efficiencies. Key growth drivers include continued premiumization, new product innovation (like Fratelli Brut), expansion of the RTD segment, and increased presence in the CSD channel. Exports are projected to contribute 5% of total revenue from FY27 onwards, and the company aims for a net-net breakeven at INR240 crores revenue in FY27.

Market Share and Distribution

Fratelli holds a strong market position with over 50% share in the domestic luxury wine segment and approximately 30% in the premium segment. Its CSD market share is around 45%, contributing about 8% to overall revenues, and is expected to grow further with new product approvals. The company's distribution network for RTD expanded to 9,000 outlets, with a target of over 15,000 by H2 FY27.

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