Varun Beverages LimitedQ2 FY27 Results & Financial Update
Varun Beverages Limited: Q2 FY27 consolidated results and company financials – revenue ₹6,815.59 Cr, PAT ₹830.59 Cr. Explore reported YoY/QoQ movements, margins, business drivers and management commentary. This page does not provide a rating, target price or investment recommendation.
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Quarterly Results AnalysisExplore Varun Beverages Q2 FY27 quarterly results and earnings: revenue, profit (PAT), EBITDA, margins, YoY and QoQ growth, order book or business updates where reported, financial performance and management commentary. Reported figures and Nivata calculations are shown separately; no buy, sell or hold recommendation is provided.
Quarter overview
Quarterly earnings analysis
Sequentially, operations reflected the seasonal nature of the beverage industry, with revenue from operations moving from Rs. 8,650.57 crore in the preceding quarter ended June 30, 2026, and net profit moving from Rs. 1,525.36 crore.
s, consolidated sales volumes grew by 28.7% year-on-year to 354.4 million unit cases during the quarter, driven by 22.5% growth in India and 39.9% growth across international territories.
Gross margins experienced pressure during the quarter, contracting by 334 basis points year-on-year to 53.1%, primarily attributed by management to higher packaging costs arising from geopolitical issues and a higher share of lower-margin non-beverage products in India.
Management noted that rising input costs, including an approximately 16% increase in sugar prices, were largely offset by a shift toward low-sugar and no-sugar product formulations, which grew to represent about 86% of consolidated sales volumes.
Depreciation and finance costs increased due to recent business acquisitions and associated debt funding, notably the integration of Twizza in South Africa and greenfield expansion outlays.
The Board of Directors approved a third interim dividend of Rs. 0.50 per equity share of face value Rs. 2 each, with November 5, 2026, fixed as the record date.
01 · Business model
What does Varun Beverages do?
Varun Beverages Limited (VBL) operates as a key franchisee of PepsiCo, manufacturing, distributing, and selling a broad portfolio of carbonated soft drinks (CSDs), non-carbonated beverages (NCBs), and packaged drinking water.
The company's licensed PepsiCo CSD brand portfolio includes carbonated beverages such as Pepsi, Pepsi Zero, Mountain Dew, Sting, Adrenaline Rush, Seven-Up, Mirinda, Nimbooz Jeera Soda, and Evervess mixers. Non-carbonated beverage lines include Slice, Tropicana juices, Seven-Up Nimbooz, and Gatorade alongside Aquafina packaged water.
VBL operates across 26 states and 6 union territories in India, alongside international territories across Asia and Africa including Nepal, Sri Lanka, Morocco, Zambia, Zimbabwe, South Africa, Lesotho, Eswatini, and the Democratic Republic of Congo.
The company follows a calendar year running from January 1 to December 31 as its financial year, in accordance with Section 2(41) of the Companies Act, 2013.
02 · Historical context
What shaped the business before this quarter
Since the 1990s, VBL has expanded its association with PepsiCo across multiple territories and sub-territories, holding exclusive bottling and distribution rights across extensive domestic and international geographies.
Through successive acquisitions including Bevco and Twizza in South Africa, alongside operations in Zambia, Zimbabwe, Morocco, and Kenya, VBL has established Africa as a core pillar of its international business.
03 · Financial snapshot
Current quarter vs the available comparable
| Metric | Q2 FY27 | Previous quarter |
|---|---|---|
| Revenue from operations | ₹6,815.59 Cr | ₹8,650.57 Cr |
| Total income | ₹6,935.45 Cr | ₹8,754.95 Cr |
| Profit before tax | ₹1,054.90 Cr | ₹1,981.46 Cr |
| Profit after tax | ₹830.59 Cr | ₹1,525.36 Cr |
| EPS | ₹2.45 | ₹4.50 |
04 · Why it moved
Why the quarter looked the way it did
What drove revenue
Consolidated sales volumes rose 28.7% year-on-year to 354.4 million unit cases, supported by 22.5% growth in India (217.7 million cases) and 39.9% growth in international markets.
Beverage realization per case improved by 2.2% at the consolidated level to Rs. 177.0, aided by premium product introductions such as Ad Rush and the Evervess mixers range, alongside an efficient price pack architecture.
Non-beverage sales grew robustly, reaching Rs. 334.35 crore (Rs. 3,343.5 million) at the consolidated level, reflecting increased demand for preforms, caps, and allied packaging items.
What drove margins
Gross margins contracted by 334 basis points year-on-year to 53.1%, driven by higher costs for preforms, shrink film, closures, and cans due to geopolitical supply chain disruptions.
Robust volume growth across India and international territories generated operating leverage that partially offset gross margin contraction, restricting the decline in EBITDA margin to 140 basis points.
05 · Segments, products & geography
Which parts of the business are doing the work
Segments and products
The company's business activities predominantly fall within a single primary operating segment: the manufacturing and sale of beverages. Geographically, operations span India and international territories.
Carbonated soft drinks (CSDs) represented 73.3% of total sales volumes, packaged drinking water accounted for 21.9%, and non-carbonated beverages (NCBs) constituted 4.8% during the quarter.
Geography and market mix
India generated standalone revenue from operations of Rs. 3,822.45 crore during the quarter, with sales volumes expanding 22.5% year-on-year to 217.7 million cases.
International business benefited from the integration of Twizza in South Africa, contributing 15.3 million cases during the quarter, alongside the initiation of beverage operations in Kenya.
06 · Capacity, projects & execution
What is being built, commissioned or delivered
Capacity, production and utilisation
VBL operates 54 state-of-the-art production facilities globally, comprising 38 plants in India and 16 across international territories.
Projects, capex and execution
The company continued capital outlays toward expanding manufacturing capacities and bolstering chilling infrastructure, including visi-coolers in retail outlets.
07 · Strategy & new businesses
How the company is trying to change its growth mix
During the quarter on August 29, 2026, VBL incorporated a wholly-owned subsidiary, KIVA Spirits and Company Limited, to explore opportunities in ready-to-drink (RTD) beverages, alcoholic beverages, and allied products.
Varun Beverages (Zimbabwe) (Private) Limited entered into an exclusive distribution agreement with Mondelez South Africa effective October 1, 2026, for chocolate, biscuit, candy, and gum products in Zimbabwe.
The merger of Twizza Proprietary Limited with its holding company Bevco in South Africa was completed effective August 1, 2026, to unlock operational synergies.
08 · Reported developments
What changed operationally
Consolidated sales volumes grew by 28.7% year-on-year, reflecting sustained consumer demand across both domestic and international markets.
The Board declared a third interim dividend of Rs. 0.50 per equity share, demonstrating ongoing cash returns to shareholders.
09 · Pressure points & risks
What is not going smoothly
Geopolitical issues drove up packaging and raw material costs, leading to a 334 basis point contraction in consolidated gross margins.
The proposed acquisition of Crickley Dairy in South Africa by subsidiary Bevco was referred to arbitration by the sellers at the Arbitration Foundation of Southern Africa (AFSA) due to non-fulfillment of conditions precedent.
10 · Items worth noticing
The line items that can distort a quick read
Financial results for comparative periods were restated to account for the acquisition of the Kenya business from Devyani Food Industries under common control in accordance with Appendix C of Ind AS 103.
11 · Cash flow & balance sheet
Profit is one thing. Cash and funding tell another part of the story.
Capital allocation & funding
Finance costs increased to Rs. 71.69 crore (Rs. 716.91 million) for the quarter, primarily reflecting debt funding utilized for international acquisitions such as Twizza in South Africa.
12 · Beyond the numbers
What changed beyond the numbers
Reported update
Kenya Business Acquisition Restatement
VBL Industries (Kenya) Limited acquired the business of Devyani Food Industries (Kenya) Limited effective August 1, 2026, for USD 32 million under common control, resulting in the restatement of comparative financial periods.
Reported update
Zimbabwe Subsidiary Restructuring
Varun Beverages (Zimbabwe) incorporated a wholly-owned subsidiary, Varun Beverages Holding (Zimbabwe), as an investment holding vehicle during the quarter.
13 · Previous-quarter changes
What changed since the previous quarter
Revenue from operations adjusted from Rs. 8,650.57 crore in the peak summer quarter ended June 30, 2026, to Rs. 6,815.59 crore in the quarter ended September 30, 2026, in line with the seasonal demand cycle of the beverage industry.
14 · Key Q&A
The quarter, answered directly
What does Varun Beverages do?
Varun Beverages Limited (VBL) operates as a key franchisee of PepsiCo, manufacturing, distributing, and selling a broad portfolio of carbonated soft drinks (CSDs), non-carbonated beverages (NCBs), and packaged drinking water.
What is the clearest takeaway from Q2 FY27?
Sequentially, operations reflected the seasonal nature of the beverage industry, with revenue from operations moving from Rs. 8,650.57 crore in the preceding quarter ended June 30, 2026, and net profit moving from Rs. 1,525.36 crore.
What drove revenue or demand?
Consolidated sales volumes rose 28.7% year-on-year to 354.4 million unit cases, supported by 22.5% growth in India (217.7 million cases) and 39.9% growth in international markets.
What mattered most for margins or profitability?
Gross margins contracted by 334 basis points year-on-year to 53.1%, driven by higher costs for preforms, shrink film, closures, and cans due to geopolitical supply chain disruptions.
What changed operationally beyond the headline numbers?
VBL operates 54 state-of-the-art production facilities globally, comprising 38 plants in India and 16 across international territories.
What are the main pressure points disclosed for the quarter?
Geopolitical issues drove up packaging and raw material costs, leading to a 334 basis point contraction in consolidated gross margins.
15 · Scenario calculator
Earnings sensitivity: what if growth and margins change?
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16 · Next filing checkpoints
What the next disclosure can confirm or change
- 01
Synergy Realization from Twizza Integration: Monitor operational integration and margin progression following the merger of Twizza into Bevco in South Africa.
- 02
KIVA Spirits Operations: Track initial developments and product rollouts from the newly incorporated subsidiary KIVA Spirits and Company Limited in the ready-to-drink and alcoholic beverage categories.
- 03
Crickley Dairy Arbitration: Observe developments regarding the arbitration proceedings initiated at the Arbitration Foundation of Southern Africa concerning the Crickley Dairy acquisition.
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