FratelliVineyard - FratelliVineyard

📊 BSE: 541741 🏢 Breweries & Distilleries 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The Luxury and Super Premium segment delivered 18% YoY growth in Q2 FY26, maintaining over 50% market share in its category. Total Net Revenue for Q2 FY26 was INR 46.3 Cr, remaining flat compared to INR 46.4 Cr in Q2 FY25, but showing a 25% QoQ growth from INR 37 Cr in Q1 FY26. H1 FY26 revenue stood at INR 83.4 Cr, a 7.8% decline from INR 90.5 Cr in H1 FY25.

Geographic Revenue Split

The company operates across 29 States and Union Territories. While specific percentage splits per region are not disclosed, the company recently expanded into Chhattisgarh and noted a temporary slowdown in Telangana due to retail license expiries, which is expected to rebound in H2 FY26.

Profitability Margins

Gross Margins remained healthy at 79% in Q2 FY26 and 80% for H1 FY26, compared to 82% in H1 FY25. The slight decline is attributed to changes in the product mix. Net Profit After Tax (PAT) was a loss of INR 3.1 Cr in Q2 FY26 and a loss of INR 8.9 Cr for H1 FY26.

EBITDA Margin

EBITDA margin for Q2 FY26 was 3.2% (INR 1.5 Cr), improving from 2.8% (INR 1.3 Cr) in Q2 FY25. However, H1 FY26 EBITDA margin was -0.9% (INR -0.7 Cr) compared to 6% (INR 5.7 Cr) in H1 FY25, impacted by investments in the new RTD segment.

Capital Expenditure

The company has completed the majority of its core CAPEX, expanding winery capacity to 5.4 million litres. It is now planning a boutique luxury resort at Akluj on a 170-acre estate, with construction starting in early 2026 and completion targeted for 2028. Specific INR investment for the resort was not disclosed.

Credit Rating & Borrowing

The company holds a credit rating of IVR BB- / Stable (as of Sept 2023). Finance costs increased to INR 6.6 Cr in H1 FY26 from INR 5.5 Cr in H1 FY25 (a 20% increase) due to borrowings for capacity expansion. Fund-based limit utilization was 63.08%.

⚙️ Operational Drivers

Raw Materials

Grapes are the primary raw material, sourced from 400 acres of active farming and approximately 1,000 acres of long-term contract farmers. The company uses 12 specific varietals including Chardonnay, Cabernet Sauvignon, Chenin Blanc, Shiraz, Cabernet Franc, and Pinot Noir.

Import Sources

The company imported 12 grape varietals from France and Italy, which were then grafted onto Indian rootstock to develop indigenous clones.

Key Suppliers

Raw materials are sourced from local Mandi suppliers and a network of long-term contract farmers covering 1,000 acres. Specific corporate supplier names were not disclosed.

Capacity Expansion

Current winery capacity is 5.4 million litres. The company has 400 acres under active farming and supports 1,000 acres through contract farming. Future expansion includes the 170-acre luxury wine tourism resort.

Raw Material Costs

Cost of Goods Sold (COGS) was INR 9.6 Cr in Q2 FY26, representing 20.7% of revenue. For H1 FY26, COGS was INR 16.7 Cr (20% of revenue) compared to INR 16.2 Cr in H1 FY25.

Manufacturing Efficiency

The company reached an inflection point for operational efficiency at a top-line of approximately INR 210-215 Cr. Current scale allows for 45% solar energy integration.

Logistics & Distribution

Distribution covers 29 states. 65% of revenue is derived from retail (off-premise) and 35% from on-trade (hotels/restaurants).

📈 Strategic Growth

Expected Growth Rate

12% to 15%

Growth Strategy

Growth will be driven by premiumization, expanding the 'Shotgun' RTD (Ready-To-Drink) segment, and new product launches like Pinot Noir (now in 1,450+ outlets). The company is also targeting Tier-2 and Tier-3 markets and developing a luxury wine resort to boost brand equity and tourism revenue by 2028.

Products & Services

Luxury and premium wines, wine-based Ready-To-Drink (RTD) beverages, sparkling wine, port-style wine, and future wine tourism services.

Brand Portfolio

Fratelli, Sette, J'NOON, Shotgun (RTD), Pinot Noir, M/S, Ti Amo, and Noi.

New Products/Services

Launched 'Shotgun' RTD and Pinot Noir varietal. Upcoming launches in Q3 FY26 include a new sparkling wine in the Super Premium segment and a port-style wine in the Value segment.

Market Expansion

Expanded into Chhattisgarh in H1 FY26. The company is focusing on increasing reach in non-premium outlets through the RTD segment.

Market Share & Ranking

Fratelli holds 1/3rd (approx. 33%) of the total Indian wine market and over 50% market share in the Luxury wine segment.

Strategic Alliances

Partnered with Blue Tokai for brand collaborations. The company also works with long-term contract farmers for grape sourcing.

🌍 External Factors

Industry Trends

The Indian wine market is highly underpenetrated. Current trends show a shift toward premiumization and RTD formats. The industry is evolving toward mainstream urban consumption with a focus on 'grape-to-bottle' transparency.

Competitive Landscape

Fratelli is a top-tier player alongside peers like Sula Vineyards. It maintains a vast lead in size over the 'next in line' competitors in the premium segment.

Competitive Moat

Moats include a 15-year agronomical lead, ownership of proprietary clones, and a 1/3rd market share. The 'time' required to mature vineyards (entry barrier) makes these advantages highly sustainable.

Macro Economic Sensitivity

Sensitive to urban consumption trends and the acceleration of premiumization in the Indian beverage market.

Consumer Behavior

Increasing consumer interest in wine as part of mainstream urban lifestyle and a growing preference for luxury homegrown brands.

Geopolitical Risks

Exposure to trade barriers for imported wine components and potential changes in state-level alcohol regulations.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily regulated by state-level excise policies and retail licensing. For example, the Telangana license expiry in Q2 FY26 caused a temporary regional slowdown.

Environmental Compliance

Significant investment in renewable energy with 45% solar power adoption at the main winery to meet ESG goals.

Taxation Policy Impact

The company reported a tax credit of INR 3.0 Cr in H1 FY26 due to losses.

Legal Contingencies

No specific pending high-value court cases or litigation amounts were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Regulatory volatility in state excise policies and the impact of climate change on grape harvests are primary risks. EBITDA volatility due to high fixed costs and brand investments is also a factor.

Geographic Concentration Risk

While present in 29 states, the company faces concentration risks in key markets like Telangana and Maharashtra where regulatory shifts have high impact.