Fratelli missed its own revenue guidance twice. Now it's guiding 30% growth.
FY26 revenue grew just 1% against two prior guidance cuts. The company is now betting on an RTD doubling and cost discipline to hit FY27 targets.
What's new
- FY26 revenue was ₹184 cr, up just 1% year-on-year, missing both the 12-15% and the revised 7% guidance.
- FY27 guidance is 30% growth to ₹240 cr, with PAT breakeven targeted via cost discipline.
- The Shotgun RTD brand delivered 100,000 cases and ₹18 cr in its first year, with a plan to double volume in FY27.
- The ₹70-80 cr hospitality resort project has been deferred by over a year to prioritize the RTD business.
Themes from the call
Guidance credibility
Fratelli has now missed or walked back revenue guidance in three consecutive calls, eroding the credibility of its forward targets.
RTD as the new engine
The company is pivoting its growth story entirely to the Shotgun RTD brand, which delivered ₹18 cr in Year 1 and is targeted to double.
Path to profitability
Management says ₹240 cr in revenue is the level for PAT breakeven, with cost structure geared to support doubling from current scale with minimal incremental fixed costs.
Guidance watch
- FY27 revenue growth guided at 30% to ₹240 cr, with PAT breakeven at that revenue level.
- Shotgun RTD volume to double to 200,000+ cases and outlets to expand to 15,000+ by H2 FY27.
- Exports targeted at 5% of total revenue from FY27 onwards.
- Gross margins expected in the 76-80% range, down from 79% in FY26 due to RTD mix.
Risk flags
- A history of missing guidance makes the 30% growth target difficult to underwrite without evidence of demand pull.
- The RTD business is nascent and will require marketing spend above 10% of segment revenue for three years.
- No segment-level margin bridge was provided for the wine versus RTD or premium versus luxury breakdown.
Key quotes
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"For the full year FY26, revenue remained largely flat owing to regulatory disruptions in key markets such as Maharashtra and Telangana."
— Fratelli management, June 2026 call -
"We will deliver 30% growth in FY27 and with operating efficiencies coming into play we believe PAT breakeven will be achieved."
— Gaurav Sekhri, Fratelli Vineyards
The brief
Fratelli Vineyards has a credibility problem. Management first guided 12-15% revenue growth for FY26. When first-half regulatory disruptions hit, they cut guidance to 7% in February 2026, implying a strong second half. Instead, FY26 revenue grew just 1% to ₹184 cr. On the June call, management blamed the same first-half regulatory issues that were supposed to be normalizing, without explaining why the revised Q4-dependent forecast also failed.
The company is now asking the street to believe in a 30% growth year. The engine for that is the Shotgun RTD brand, which delivered 100,000 cases and ₹18 cr in its first year. The plan is to double that volume in FY27 and expand from 9,000 to 15,000 outlets. The hospitality resort, once a near-term initiative, has been deferred to redirect the ₹70-80 cr capital toward RTD.
There are real tailwinds. The RTD wine market is over ₹500 cr and growing at 25% annually. Fratelli's luxury wine portfolio, above ₹2,000 MRP, grew 15% and represents over 70% of revenue, with Sette flagship sales up 44%. Exports doubled. The company hit EBITDA breakeven for the full year.
But the gap between promise and delivery is wide. Management says ₹240 cr in revenue is the level for PAT breakeven, driven by cost discipline at scale. That requires the RTD business to scale without the significant marketing spend (over 10% of segment revenue for three years) destroying margins. It also requires the core wine business, which declined 16% in the premium segment, to stabilize. Three guidance misses in a row make the new target hard to trust without a clear demand signal.
Fratelli is betting the company on an RTD doubling to fix a track record of broken guidance.