Varun Beverages reported a 15.1% rise in net profit to ₹15,253.6 million for the June quarter, supported by a 38.4% surge in international volumes. While the company's Indian operations maintained steady growth, the international expansion, including the acquisition of Twizza in South Africa, is becoming a key driver for the firm's consolidated performance.
Detailed Coverage
Varun Beverages Ltd. (VBL) delivered a strong financial performance in the second quarter of 2026, driven largely by its growing footprint outside of India. The company saw its consolidated net revenue climb by 20.4% to reach ₹84,512.3 million. This growth was fueled by a consolidated sales volume increase of 19.8%, with the company selling 466.7 million cases during the period.
International Markets Driving Volume Expansion
The most notable trend in the latest results is the rapid growth in overseas markets, where volumes jumped 38.4% compared to the same period last year. This significantly outpaced the 14.4% growth recorded in the Indian business. A major contributor to this international success was the South African beverage firm Twizza, which added 11.8 million cases to the total volume. Beyond South Africa, the company is actively working to expand its reach in East Africa through the planned acquisition of Devyani Food Industries in Kenya, aiming to build a wider distribution network for its portfolio of carbonated and energy drinks.
Impact on Margins and Strategic Long-Term Outlook
While revenue and volume growth were strong, consolidated EBITDA margins saw a slight compression of 76 basis points, settling at 27.7%. This was primarily due to the initial lower margin profile of the newly acquired Twizza business. However, gross margins showed resilience, improving by 44 basis points to 55%, which the company noted was supported by the higher profitability of certain international segments.
In India, the company managed to maintain double-digit growth despite a slow start to the summer season in April. To support this growth, VBL has invested heavily in increasing manufacturing capacity and expanding its chilling infrastructure, which helps move products efficiently to retailers. Looking at the long term, the company has secured its relationship with PepsiCo by extending its exclusive bottling agreement in India until 2049. Additionally, the firm is diversifying its product mix by entering the value-added dairy segment through a new franchise agreement to sell the CALPIS brand in India.
What Investors Should Monitor
Moving forward, investors may track the progress of the company's integration of the Twizza acquisition and the upcoming entry into the Kenyan market. The financial impact of the new CALPIS brand, along with the company's ability to balance expansion costs with profitability as it scales newer international operations, will remain important areas for assessment. Maintaining margins while managing the capital spending required for capacity and distribution will also be central to the firm's future performance.