Company’s margins contracted mainly due to the consolidation of the Twizza business in South Africa, which currently operates at lower margins
PepsiCo bottler Varun Beverages reported a 15.1 per cent year-on-year (YoY) uptick in its consolidated net profit in the second quarter of the current year. The net profit rose to Rs 1,525.36 crore from Rs 1,325.49 crore in Q2CY25.
However, the company’s earnings before interest, taxes, depreciation and amortisation (Ebitda) margins contracted by 76 basis points to 27.7 per cent during the same period, mainly due to the consolidation of the Twizza business in South Africa, which currently operates at lower margins.
Reacting to the margin contraction, shares of the company fell around 8 per cent on Tuesday and were trading at Rs 431.25 as at 2.55 PM after opening at 464.7. Ebitda rose by 17.2 per cent to Rs 2,343 crore during the quarter. Revenue from operations (net of excise / GST) grew by 20.4 per cent YoY to Rs 8,451.23 crore in Q2CY2026 as compared to Rs 7,017.37 crore in Q2CY25.
In India, Ebitda margins improved by 38 bps, driven by operational efficiencies from healthy volume growth, which were partially offset by higher other expenses, primarily transportation and distribution costs.
Sales Volumes Surge 20%
Consolidated sales volume grew by 19.8 per cent to 466.7 million cases in Q2CY26 from 389.7 million cases in Q2CY25, driven by volume growth of 14.4 per cent in India and 38.4 per cent in international territories. In India, the company saw healthy volume growth in twenties since the onset of season, from March onwards except in April, which was about flat, resulting in overall volume growth for the quarter of 14.4 per cent.
“The international business maintained strong momentum. Twizza, in South Africa, helped overcoming capacity constraints, while strengthening our manufacturing footprint and route-to-market capabilities in South Africa. We also entered into an agreement to acquire the business of Devyani Food Industries (Kenya), which will provide us with the ready GTM in Kenya for expansion into carbonated soft drinks and energy drinks,” stated Ravi Jaipuria, Chairman, Varun Beverages.
Revenue from operations grew 19.4 per cent YoY to Rs 15,025.42 crore in H1 2026 as compared to Rs 12,584.31 crore H1 2025. Net profit rose by 16.9 per cent to Rs 2,404.07 crore in H1 2026, the company said in an exchange filing.
In line with the guidelines of the company’s dividend policy, the board of directors has approved an interim dividend at 25 per cent of face value (Rs 0.50 per share). Total cash outflow would be around Rs 169.1 crore, the company added.
