Synopsis: Beverage stock fell nearly 10 percent from today’s high despite reporting 20 percent YoY revenue growth and 15 percent profit growth in Q1 CY27, as investors may have reacted to weaker-than-expected quarterly performance.
The share of the company, which is a massive Indian company that manufactures, bottles, and distributes PepsiCo drinks, came under pressure after posting Q1 numbers.
With a market capitalization of Rs 1,45,886 crore, Varun Beverages Ltd’s share on Tuesday made a day low of Rs 423 per share, down by 9.9 percent from its today’ high of Rs 469.90 per share. The share of the company gave a negative return of 11.5 percent over the last year.
Result Overview & Dividend
QoQ Performance
Revenue grew by 28.55 percent to Rs 8,451 crore in Q2 CY27 from Rs 6,574 crore in Q1 CY27, and EBITDA grew by 53.38 percent to Rs 2,339 crore in Q2 CY27 from Rs 1,525 crore in Q1 CY27. Accompanied by a net profit growth of 73.49 percent to Rs 1,525 crore in Q2 CY27 from Rs 879 crore in Q1 CY27, resulting in an EPS growth of 74.42 percent to Rs 4.50 per share in Q2 CY27 from Rs 2.58 per share in Q1 CY26.
YoY Performance
Sales grew by 20 percent YoY to Rs 8,451 crore in Q2 CY27 from Rs 7,017 crore in Q2 CY26, and EBITDA grew by 17 percent to Rs 2,339 crore in Q2 CY27 from Rs 1,998 crore in Q2 CY26. Accompanied by a net profit growth of 15 percent to Rs 1,525 crore in Q2 CY27 from Rs 1,325 crore in Q2 CY26, resulting in an EPS growth of 16 percent to Rs 4.50 per share in Q2 CY27 from Rs 3.89 per share in Q2 CY26.
Dividend
The Board of Directors approved an interim dividend of 25 percent of the face value, or Rs 0.50 per share, in line with the company’s dividend policy, rewarding shareholders during the financial year.
Q2 Performance Highlights
Consolidated sales volumes rose by 19.8 percent YoY to 466.7 million cases in Q2 CY2026. Growth was supported by a 14.4 percent increase in India and a strong 38.4 percent rise in international markets, helped by the contribution from the Twizza acquisition.
The company also improved its profitability during the quarter. Gross margin increased by 44 basis points to 55.0 percent, supported by a higher contribution from international operations, early stocking of raw materials, and a better mix of low-sugar and no-sugar beverages.
On the business front, the company extended its exclusive bottling and trademark agreement with PepsiCo in India until April 2049, while gaining more operational flexibility. It also partnered with Asahi Group to launch the CALPIS brand in India and signed an agreement to acquire Devyani Food Industries in Kenya, further expanding its international presence.
Has the Pepsi Bottler Hit a Growth Slowdown in India?
- India Business Returned to Strong Growth: Varun Beverages’ India business showed a strong recovery in Q2 CY2026. Domestic sales volumes increased 14.4 percent YoY to 346.5 million cases from 302.9 million cases in Q2 CY2025, indicating healthy demand during the peak summer season. Where the consolidated volume stands at 466.7 million growing 19.8 percent YoY.
- Volume Growth Stayed Healthy Through the Quarter: The company said domestic volume growth remained around 20 percent for most of the summer season. April was the only exception, when growth remained almost flat, before demand picked up again in the following months.
- Revenue Increased Despite Slight Pricing Pressure: India operations reported net revenue of Rs 5,996.2 crore in Q2 CY2026, up 13 percent YoY from Rs 5,305 crore in the same quarter last year. However, realization per case slipped slightly by 0.6 percent to Rs 169.6, mainly due to changes in product mix and the company’s strategy of absorbing some raw material costs.
- Long-Term Growth Plans Remain Strong: The company continues to strengthen its position in India for the long term. It extended its exclusive PepsiCo bottling agreement until April 2049 and partnered with Asahi Group to launch the CALPIS brand in India, helping expand its product portfolio and support future growth.
- Conclusion: Varun Beverages delivered another quarter of healthy growth, supported by higher volumes, better margins, and continued expansion in international markets. While weather-related disruptions had affected its India business in the same quarter last year, the latest results suggest demand has recovered.
With a long-term PepsiCo agreement, new product launches, and capacity expansion across India and overseas, the company remains focused on strengthening its growth over the coming years.
About the Company
Varun Beverages Ltd has been associated with PepsiCo since the 1990s and is a key player in the beverage industry and one of the largest franchisees of PepsiCo in the world. The company produces and distributes a wide range of carbonated soft drinks, non-carbonated drinks, and packaged water sold under trademarks owned by PepsiCo.
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