Varun Beverages Q2 Results: Varun Beverages (VBL), one of PepsiCo’s largest franchise bottlers, reported a strong set of earnings for the quarter ended June 2026 (Q2 CY2026) on Tuesday, July 28. The company, which follows the January-December financial year, posted double-digit growth in revenue, profit and EBITDA, supported by robust volume growth across its India and international businesses.
Net profit rose 15.1% year-on-year to ₹1,525.36 crore in Q2 CY2026 from ₹1,325.49 crore a year earlier, driven by strong volume growth in both domestic and overseas markets.
Revenue from operations (net of excise duty and GST) increased 20.4% to ₹8,451.23 crore during the quarter, compared with ₹7,017.37 crore in the corresponding period last year.
EBITDA climbed 17.2% year-on-year to ₹2,343.04 crore from ₹1,998.77 crore in Q2 CY2025. However, the EBITDA margin narrowed by 76 basis points to 27.7%, primarily due to the consolidation of the Twizza business, which currently operates at relatively lower margins.
Dividend: The Board of Directors also approved an interim dividend of 25% of face value, i.e., Rs. 0.50 per share, resulting in a total cash outflow of approximately Rs. 169.1 crore.
The stock fell 5% to its day’s low of ₹441.05 post the earnings announcement.
Other Q2 Highlights
The company’s consolidated sales volume rose 19.8% year-on-year to 466.7 million cases in Q2 CY2026 from 389.7 million cases a year ago, driven by 14.4% volume growth in India and a 38.4% increase in international markets. The international business also included 11.8 million cases contributed by the recently acquired Twizza business in South Africa.
Gross margin improved by 44 basis points to 55.0%, aided by a higher contribution from the international business.
In India, gross margins remained resilient despite elevated raw material costs, aided by early stocking of key inputs and a higher share of low- and no-sugar beverages. EBITDA margins in the domestic business improved by 38 basis points, supported by operational efficiencies from healthy volume growth, although the gains were partly offset by higher transportation and distribution expenses.
Meanwhile, finance costs increased 55.8% following the Twizza acquisition.
H1 CY2026 performance
Varun Beverages continued its strong momentum in the first half of CY2026, with revenue from operations rising 19.4% year-on-year to ₹150,254.2 million from ₹125,843.1 million in the corresponding period last year. EBITDA increased 18.7% to ₹38,719.6 million, while net profit climbed 16.9% to ₹24,040.7 million. The company’s portfolio continued to shift towards healthier offerings, with low- and no-sugar products accounting for around 73% of consolidated sales volumes during the six-month period.
Management commentary
Commenting on the performance, Ravi Jaipuria, Chairman of Varun Beverages, said, “We are pleased to report a strong performance during this quarter across our markets. Consolidated sales volumes grew by 19.8% and, together with improved realizations, translated into a 20.4% increase in net revenue from operations. EBITDA increased by 17.2% to Rs. 23,430.4 million in Q2 CY2026.”
Jaipuria said the company’s expanded manufacturing footprint, extensive distribution network and continued investments in chilling infrastructure continued to support growth in India despite an uneven summer season.
Highlighting strategic developments during the quarter, he added, “We also extended our exclusive bottling and trademark licence agreement with PepsiCo in India until April 2049… We also entered a strategic alliance with Asahi Group Holdings to introduce the iconic CALPIS brand in India, marking our entry into the value-added fermented dairy beverage category.”
He said the PepsiCo agreement also removed the earlier restriction requiring VBL to operate solely as a special purpose vehicle for PepsiCo’s business, providing greater operational flexibility to pursue future growth opportunities.
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