Varun Beverages Limited (VBL) share price
₹416.50 on NSE as of 2026-09-11. +1.46% on the day. market cap ₹140,873 Cr. P/E 41.6. 52-week range ₹382.20 to ₹544.05. Fast Moving Consumer Goods.
Varun Beverages Q2 CY2026: 466.7 Million Cases, One Contract Extended to 2049, and a Margin That Slipped 76 bps
At a glance
Varun Beverages closed the June 2026 quarter with revenue of ₹8,451 Cr, up 20.4% from ₹7,017 Cr a year earlier. Operating profit came in at ₹2,339 Cr against ₹1,998 Cr, and net profit at ₹1,521 Cr against ₹1,317 Cr. EPS for the quarter was ₹4.50, versus ₹3.89 in the base quarter.
Consolidated sales volumes grew 19.8% to 466.7 million unit cases, split between 14.4% growth in India and 38.4% internationally, with 11.8 million cases contributed by Twizza in South Africa. Management attributes the softer India profile to April, which it describes as "about flat," and links this to weather.
The company reported EBITDA margin of 27.7%, down 76 bps year-on-year; management attributes the decline to the consolidation of Twizza, which it says currently operates at lower margins. India EBITDA margin improved 38 bps. Depreciation rose 33.6% and finance cost 55.8%, both of which management ties to new India plants and the Twizza acquisition.
Two structural items landed in the period. On May 21, 2026, VBL and PepsiCo signed a revised exclusive bottling appointment for India extending the term to April 30, 2049 from April 30, 2039, and deleting the clause restricting VBL to act solely as an SPV for PepsiCo's business. On June 18, VBL entered a franchise alliance with Asahi Group Holdings for the CALPIS brand in India.
The board approved a second interim dividend of ₹0.50 per share, a cash outflow of roughly ₹169 Cr. And there is the small matter of what a bottler does with a licence that now runs 23 years — which starts with what it actually does today.
Introduction
Varun Beverages was established in 1995 by Ravi Kant Jaipuria to serve PepsiCo's beverage operations in India, and has been associated with PepsiCo since the 1990s. It is the largest PepsiCo franchisee in India and, per its own presentation, the second largest outside the United States. It follows a January–December financial year, approved by the Company Law Board, which is why its "Q2" is the summer quarter and why seasonality is not a footnote but the entire calendar.
The last three years have been a story of geography. India contributed 67% of net revenue in CY25, down from 72% in CY24 — not because India shrank, but because Africa arrived. The company holds franchise rights in ten countries and distribution rights in four more, and it has spent heavily to fill them: about ₹4,500 Cr of capex capitalised as of CY25, including ₹1,700 Cr on four greenfield plants at Prayagraj, Buxar, Damtal and Mendipathar, ₹300 Cr on brownfield work at Sricity and Gorakhpur, and ₹1,300 Cr internationally covering DRC capacity, snack facilities in Morocco and Zimbabwe, and a CAN line in South Africa. Guidance for CY26 capex is under ₹500–600 Cr.
The inorganic route has been busier. In March 2026 the company completed the acquisition of Twizza (Pty) Limited through its South African subsidiary Bevco for ZAR 2,053 million (₹1,140 Cr), and signed to buy Crickley Dairy for around ZAR 238 million. In July it agreed to acquire the business of Devyani Food Industries (Kenya) Limited for USD 32 million. Alongside that sit a Carlsberg distribution agreement for certain African territories signed in CY25, and a stated interest in exploring alcoholic beverages.
Balance-sheet backdrop: CRISIL reaffirmed the long-term bank facility rating at AAA/Stable in April 2026, citing gearing of 0.11x and debt-to-EBITDA of 0.38x in CY25.
Business model
They put sugar water in bottles. Then they put the bottles in trucks. Then they put refrigerators in shops so that the bottles are cold when you want them, because a warm Pepsi is a philosophical object and a cold one is a sale.
That is the whole model, and it is far harder than it sounds. PepsiCo owns the trademarks, the formulation and the concentrate, and handles brand advertising. VBL owns everything between the concentrate and your hand: 53 production facilities (38 in India, 15 international), the vehicles, the visi-coolers, the distributors, and the physical act of reaching four million-plus outlets. PepsiCo does the demand creation. VBL does the demand delivery. It is a division of labour where one party gets to shoot glossy films and the other gets to worry about pallets.
The portfolio is broader than the colas. CSDs are Pepsi, Pepsi Zero, Mountain Dew, Sting, Adrenaline Rush, Seven-Up, Mirinda, Nimbooz Jeera Soda and Evervess. Non-carbonated covers Slice, Tropicana, Seven-Up Nimbooz, Gatorade and Aquafina water. Own brands include Jive, Cooe, Reboost, Creambell, Aquaclear and Refreshh. There are also snacks — Frito-Lay, Cheetos, Doritos, Simba, Kurkure — because the company that sells you the drink has noticed you get thirsty for a reason.
In Q2 CY2026 the volume mix ran 75% CSD, 18% water and 7% NCB. Water at 18% of volume is the part nobody puts on a billboard, and it is roughly two and a half times the entire non-carbonated portfolio.
The clever bit is backward integration. VBL manufactures its own preforms, closures, cartons, crates and films across 3 exclusive and 19 integrated plants, and makes crown corks, corrugated boxes and shrink wrap in-house. It also acquired 50% of Everest Industrial Lanka and formed White Peak Refrigeration to build visi-coolers itself. A beverage company that manufactures its own fridges has stopped pretending it is in the beverage business alone; it is in the logistics business with flavour attached.
Management's stance on pricing is unusually blunt. Varun Jaipuria described the ₹10 price point as "a non-profitable category for us," with selective participation only in certain markets. Raj Gandhi framed competitor pack-size changes as "immaterial" so long as realisation per unit and margins hold.
Quarterly results, balance sheet, cash flow, ratios, shareholding and the filings themselves are on the full page for Varun Beverages Limited.
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