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Varun Beverages Q3 Results: Stock falls on margin pressure; Consolidated volume growth of 28% - Published OnOct 30, 2026 | 12:30 IST - Last Updated OnOct 30, 2026 | 12:58 IST Strong international volume expansion and higher realisations drove revenue growth, even as elevated packaging costs weighed on operating margins. Find out how upcoming African acquisitions and new product lines will impact future profitability. Shares of Varun Beverages Ltd. fell about 3.5% on Friday, October 30, after the company reported a 14% year-on-year (YoY) increase in consolidated net profit to ₹828 crore for the September quarter from ₹728 crore in the corresponding quarter last year. Revenue from operations rose 33.3% YoY to ₹6,815.6 crore from ₹5,112.4 crore in the year-ago quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 25.1% to ₹1,426.5 crore, compared with ₹1,140 crore a year earlier. However, the EBITDA margin contracted by 130 basis points to 21% from 22.3% in the corresponding quarter last year. Varun Jaipuria, Executive Vice Chairman of Varun Beverages, said, “Higher packaging costs weighed on margins during the quarter, although improved realisations and operating leverage from strong volume growth helped partially offset these pressures.” Volume growth driven by India and international markets Consolidated sales volumes rose 28.7% year-on-year to 354.4 million cases during the quarter, compared with 275.3 million cases a year earlier. Volumes in India grew 22.5%, while international markets recorded growth of 39.9%. The international volume figure included 15.3 million cases contributed by Twizza in South Africa. Jaipuriya said, “Our international business continued to make strong progress during the quarter, with Africa remaining a key continent for expansion.” Beverage realisation per case improved 2.2% at the consolidated level. In India, realisation increased 0.5%, supported by a higher contribution from premium categories, including Ad Rush and Evervess mixers, calibrated discounting and a more efficient price-pack architecture. On the domestic business, he said, “In India, we continued to witness healthy volume growth during the quarter, extending the positive trend seen since May.” Jaipuria attributed the performance to the company's distribution network, expanded manufacturing capacities and investments in chilling infrastructure. Carbonated soft drinks accounted for 73.3% of consolidated sales volumes, while packaged drinking water contributed 21.9% and juice-based beverages 4.8%. The Executive Vice Chairman also said that the company expected to unlock operational synergies following the merger of Twizza with BevCo in South Africa. Beverage operations have also started in Kenya, where the company introduced two brands, BOLT UP and XTREME FIZZ. Varun Beverages declares third interim dividend Alongside its results, the company's board approved a third interim dividend of ₹0.50 per equity share for the financial year 2026. The company has fixed November 5, 2026, as the record date to determine shareholders eligible for the dividend. The payment will be made from November 7 onwards. Nine-month performance For the nine months ended September 2026, Varun Beverages reported a 23.3% year-on-year increase in net revenue to ₹21,814.6 crore. EBITDA rose 19.9% to ₹5,274.6 crore, while profit after tax increased 15.5% to ₹3,202.3 crore. The company noted that its business is seasonal, with a significant portion of revenue and profits typically generated during the April-June quarter. It said performance is therefore best assessed on an annual basis. Key business developments During the September quarter, Varun Beverages incorporated KIVA Spirits and Company, a wholly owned subsidiary in India, to undertake the business of ready-to-drink (RTD) and alcoholic beverages and allied products. Its Zimbabwe subsidiary also entered into an exclusive distribution agreement with Mondelez South Africa, effective October 1, 2026, for the distribution of the latter's chocolate, biscuit, candy and gum products in Zimbabwe. Separately, the company's subsidiary in Kenya acquired the business of Devyani Food Industries for a consideration of $32 million, effective August 1, 2026. The stock is currently trading 3.1% lower at ₹402.05. The stock is trading close to its 52-week low of ₹381, and is down 18% so far this year.
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