Varun Beverages Announced Q1 Results: Profit Jumps 20% as Revenue and Volumes See Strong Growth

Varun Beverages’ share price declined around 2 per cent, trading at Rs 481.95 as of 12:20 PM on April 27, 2026, compared to its previous close of Rs 490.45. The stock saw some pressure despite strong quarterly performance.
Meanwhile, the broader market remained positive, with the Nifty 50 trading at 24,037.0, up 0.50 per cent from its previous close of 23,897.95.

Varun Beverages Delivers Strong Q1 Performance
Varun Beverages Limited reported a steady performance for the first quarter of CY2026, supported by demand trends, execution, and expansion across markets. Consolidated sales volumes rose 16.3 per cent to 36.34 crore cases in Q1 CY2026, compared to 31.24 crore cases in the same period last year. The growth was driven by a 14.4 per cent increase in India and a 21.4 per cent rise in international markets.
Revenue from operations increased 18.1 per cent to around Rs 6,574 crore, while EBITDA rose 21.0 per cent to approximately Rs 1,529 crore. EBITDA margins improved to 23.3 per cent. Profit after Tax (PAT) grew 20.1 per cent to about Rs 879 crore.

India Business Remains Strong
The India business continued to perform well, supported by strong distribution, better execution, and capacity expansion. The company focused on volume growth through pack upsizing and targeted price-point strategies to attract new consumers.
However, realization per case in India declined slightly by 1.5 per cent due to these volume-led strategies. Despite this, EBITDA margins in India improved by 112 basis points, driven by operational efficiencies and higher volumes.

International Business and Africa Expansion
The international segment saw steady momentum, with the company expanding its presence in Africa. It completed the acquisition of Twizza in South Africa through its subsidiary BevCo at an enterprise value of around Rs 102 crore (ZAR 2,053 million). This move strengthens its manufacturing footprint and distribution network in one of Africa’s largest soft drink markets.
Additionally, the company has entered into an agreement to acquire Crickley Dairy in South Africa for around Rs 12 crore (ZAR 238 million), subject to regulatory approvals. These acquisitions are expected to create long-term operational and commercial synergies.

Margins Improve Despite Cost Pressures
Gross margins improved by 62 basis points to 55.2 per cent, supported by early raw material stocking and a higher share of low sugar and no sugar products, which now account for around 63 per cent of total volumes. Higher depreciation (up 30.9 per cent) was due to new plants commissioned last year, while finance costs rose 18.0 per cent due to the Twizza acquisition.

Dividend Announcement
The company announced an interim dividend of 25 per cent of face value, amounting to Rs 0.50 per share. The total cash outflow for this dividend is estimated at around Rs 1,691 million. It also confirmed that the final dividend of Rs 0.50 per share for CY2025 has already been approved and paid.

Management Commentary
Chairman Ravi Jaipuria said the company delivered a strong quarter driven by demand, execution, and expansion across markets. He highlighted that India demand remains strong and new product initiatives are helping drive growth.
He also emphasized that the Africa expansion through acquisitions will strengthen long-term growth, while the company remains well-positioned due to its strong distribution network, diversified portfolio, and growing consumption trends.

About the Company
Varun Beverages Limited is one of the largest franchisees of PepsiCo globally (outside the USA). The company manufactures and distributes a wide range of carbonated and non-carbonated beverages, including brands like Pepsi, Mountain Dew, Mirinda, Tropicana, and Aquafina. It operates across India and multiple international markets, including South Africa, Sri Lanka, Morocco, and several African countries, with India contributing around 67 per cent of its total revenue.

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Disclaimer: This article is for informational purposes only and not investment advice.