Varun Beverages Reports Q2 and H1 Financial Results; Extends PepsiCo Agreement, Announces Strategic Acquisitions
Gurgaon, July 28, 2026: Varun Beverages Limited (VBL), a key player in the beverage industry, announced its financial results for the second quarter and half year ended June 30, 2026. The company also detailed several major strategic agreements and expansions, including an extended bottling appointment with PepsiCo and the entry into a franchise partnership with Asahi Group Holdings.VBL reported solid growth across its markets in Q2 CY2026. Net revenue from operations grew by 20.4% year-on-year (YoY) to Rs. 84,512.3 million. EBITDA increased by 17.2% YoY reaching Rs. 23,430.4 million, while Profit After Tax (PAT) rose by 15.1% to Rs. 15,253.6 million.
For the first half of 2026 (H1), revenue from operations grew 19.4% YoY to Rs. 150,254.2 million. EBITDA increased by 18.7% to Rs. 38,719.6 million, and PAT saw a rise of 16.9% to Rs. 24,040.7 million compared to H1 2025.
The financial performance highlights are summarized below:
| Metric | Q2 CY2026 | Comparison to Q2 CY2025 | H1 CY2026 | Comparison to H1 CY2025 |
|---|---|---|---|---|
| Revenue from Operations | Rs. 84,512.3 million | Grew 20.4% YoY | Rs. 150,254.2 million | Grew 19.4% YoY |
| EBITDA | Rs. 23,430.4 million | Higher by 17.2% YoY | Rs. 38,719.6 million | Higher by 18.7% YoY |
| PAT | Rs. 15,253.6 million | Higher by 15.1% YoY | Rs. 24,040.7 million | Increased by 16.9% |
Performance Review for Q2 CY2026
The company reported significant volume growth in India and international territories during the quarter. Consolidated sales volume grew by 19.8%, reaching 466.7 million cases, up from 389.7 million cases in Q2 CY2025. This was driven by a 14.4% volume increase in India and 38.4% in international territories.In terms of profitability, Gross margins improved by 44 basis points (bps) to 55.0% in Q2 CY2026, which management attributed to the higher mix of international business. In India, gross margins were supported by early stocking of key raw materials and savings in sugar consumption, despite high inflationary pressures on raw materials.
EBITDA margins declined by 76 bps to 27.7% for Q2 CY2026, largely due to the consolidation of the Twizza business, which operates at lower margins. EBITDA improved by 38 bps in India, attributed to operational efficiencies gained from healthy volume growth, though this was partially offset by higher other expenses, primarily transportation and distribution costs.
PAT increased by 15.1% to Rs. 15,253.6 million, driven by strong volume expansion across both Indian and international markets. Costs related to depreciation and finance also saw notable increases due to the commissioning of new plants in India and the acquisition of Twizza in South Africa.
Strategic Developments and Market Expansion
Varun Beverages Limited (VBL) highlighted several key developments that strengthen its market position:PepsiCo Agreement Extension: VBL and PepsiCo Inc. finalized a revised Exclusive bottling appointment and trademark license agreement for India on May 21, 2026. The agreement term was extended until April 30, 2049 (from the original April 30, 2039), and the prior restriction requiring VBL to operate solely as an SPV for PepsiCo's business was removed, granting greater operational flexibility.
Asahi Group Partnership: On June 18, 2026, VBL entered into a franchise agreement with Asahi Group Holdings. This alliance introduces the CALPIS brand, Japan’s iconic fermented milk-based beverage, to the Indian market. VBL plans to launch both Original and Mango variants of CALPIS.
Expansion into Kenya: A significant step toward geographical expansion was announced on July 6, 2026, when VBL Industries (Kenya) Limited entered a Business Transfer Agreement to acquire the business in Devyani Food Industries (Kenya) Limited (DFIKL). The purchase consideration for the business, which boasts existing go-to-market infrastructure and has net revenue exceeding Rs. 3,000 million for the financial year ended March 2026, was USD 32 million (approximately INR 3,050 million).
Dividend: In line with its dividend policy, the Board of Directors approved an interim dividend at 25% of face value, set at Rs. 0.50 per share, resulting in a total projected cash outflow of approximately Rs. 1,691 million.
VBL Stock Price Movement
Shares of Varun Beverages Limited are shedding value in active trading as of 1:08 PM, dipping 4.48% to reach ₹443.7. Trading activity continues with over 13.88 million shares changing hands during the current session.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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