Varun Beverages Reports 18.1% Revenue Growth, Driven by Strong Demand in Q1 CY2026

Varun Beverages Reports 18.1% Revenue Growth, Driven by Strong Demand in Q1 CY2026​

Varun Beverages Limited (VBL), a major player in the beverage industry and a key franchise partner of PepsiCo, announced its financial results for the first quarter ended March 31, 2026. The company reported significant year-over-year growth across its key financial metrics, driven by robust sales volumes in both domestic and international markets.

Financial Highlights for Q1 CY2026​

For the first quarter of the calendar year 2026, VBL reported a 18.1% year-over-year (YoY) increase in Revenue from operations. The company's EBITDA also rose by 21.0% YoY.

Key financial figures for Q1 CY2026 compared to Q1 CY2025:

Operational Performance and Market Mix​

VBL noted that consolidated sales volume grew by 16.3% in Q1 CY2026, reaching 363.4 million cases. This growth was fueled by volume increases of 14.4% in India and 21.4% in international territories.

The company observed that net realization per case improved by 1.6% at the consolidated level, primarily attributed to favorable currency movements in international territories. In India, while net realization per case declined by 1.5%, this was attributed to volume growth initiatives like upsizing packs and selective price-point launches aimed at onboarding new consumers.

Operational margins also showed strength. Gross margins improved by 62 basis points (bps) to 55.2% in Q1 CY2026. EBITDA margins improved by 55 bps to 23.3%, with a notable improvement of 112 bps in India, driven by operational efficiencies and gross margin improvements.

In terms of product mix, the low sugar/no sugar product category increased to approximately 63% of consolidated sales volumes. The product composition in Q1 CY2026 was reported as CSD constituting 73.6%, NCB 18.9%, and Packaged Drinking Water 7.5%.

Strategic Developments and International Growth​

During the quarter, the company advanced its international strategy and strengthened its manufacturing footprint.

Acquisition of Twizza (Pty) Limited: VBL consummated the acquisition of 100% stake in Twizza (Pty) Limited, South Africa, through its subsidiary, The Beverages Company Proprietary Limited (BevCo). The transaction, completed on March 18, 2026, occurred at an Enterprise value (post due diligence adjustments) of ZAR 2,053 million. This acquisition enhances the company’s presence in Africa's largest soft drinks market.

Agreement with Crickley Dairy: Furthermore, VBL entered into a share purchase agreement with Crickley Dairy Proprietary Limited for the purchase of 100% share capital. The agreement, dated March 17, 2025, is for an Enterprise value of approximately ZAR 238 million (including working capital).

Dividend and Forward Outlook​

The Board of Directors approved an interim dividend of 25% of face value, equivalent to Rs. 0.50 per share. This approval results in a total anticipated cash outflow of approximately Rs. 1,691 million.

Chairman Ravi Jaipuria noted that domestic demand remained encouraging, supported by wide distribution and continued investments in manufacturing capacity. He highlighted that the facilities commissioned in the previous year are expected to support growth and enhance operating efficiencies.

Looking ahead, VBL stated its confidence in the long-term opportunity across its markets, citing favorable demographics, rising incomes, and increasing beverage consumption.

VBL Stock Price Movement​

Shares of Varun Beverages Limited are edging higher to ₹490.75 as of 12:33 PM, rallying 0.06% in live trading. The stock is maintaining momentum on significant volume, with approximately 8.10 million shares transacted during the active trading session.