News ArticleVarun Beverages Posts 33.2% Revenue Growth and 25.1% EBITDA Rise in Q3 CY2026 Supported by Strong Volume Gains
International sales volume jumps 39.9% with new African brands launched; Board approves interim dividend of Rs. 0.50 per share
Varun Beverages achieved a 33.2% year-on-year increase in revenue to Rs. 66,075.6 million and a 25.1% rise in EBITDA to Rs. 14,267.1 million in Q3 CY2026, driven by strong volume growth across India and international markets, including the successful merger of Twizza with BevCo and new product launches in Africa. The company declared an interim dividend of Rs. 0.50 per share and continues to invest in expanding distribution, manufacturing, and new beverage categories.
Varun Beverages Limited
Earnings Call Transcript
Varun Beverages Limited reported a 33.2% increase in revenue to Rs. 66,075.6 million and a 25.1% rise in EBITDA to Rs. 14,267.1 million for Q3 CY2026, driven by 28.7% consolidated volume growth supported by strong performance in both India and international markets including Africa.
Revenue for the first nine months of CY2026 rose 23.3% to Rs. 218,146 million with sustained volume growth across all territories. Volume surged 22.5% in India and 39.9% internationally, aided by the recent merger of Twizza with BevCo in Africa and introduction of new beverage brands such as 'BOLT UP' and 'XTREME FIZZ'.
The gross margin contracted by 334 basis points to 53.1% primarily due to higher packaging material costs, including increases in prices of preforms, shrink films, closures, and cans caused by geopolitical disruptions. Growth in non-beverage products with higher costs also impacted margin.
Realizations improved by 2.2% year-on-year, supported by growth in higher-value beverage categories like dairy and premium products including 'Ad Rush' and 'Evervess' mixers. The company also expanded distribution agreements, notably with Mondelez in Zimbabwe.
EBITDA margin moderated by 140 basis points to 21.6% despite input cost pressures. Operating leverage from volume growth helped maintain margin stability. Profit after tax grew 13.5% to Rs. 8,306 million in Q3 CY2026.
The company declared an interim dividend of Rs. 0.50 per share (25% of face value), amounting to Rs. 1,691 million in cash outflow. Varun Beverages continues to focus on investing in capacity expansion, chilling infrastructure, and diversifying into adjacent beverage categories, including ready-to-drink and alcoholic beverages through its incorporation of KIVA Spirits and Company Limited.
Highlights
- Consolidated revenue increased by 33.2% year-on-year to Rs. 66,075.6 million in Q3 CY2026.
- Consolidated sales volume rose 28.7% to 354.4 million cases, with India up 22.5% and international markets up 39.9%.
- Gross margin declined by 334 basis points to 53.1% primarily driven by higher packaging costs and increased sales of higher-cost non-beverage products.
- EBITDA increased 25.1% to Rs. 14,267.1 million with 21.6% margin despite cost pressures.
- Profit after tax grew 13.5% to Rs. 8,306 million in Q3 CY2026.
- Twizza merger with BevCo completed on August 1, 2026, improving operational synergies in Africa market expansion including new brands launches and distribution deals in Zimbabwe and Kenya.
Key Data Snapshot
What happened
- Varun Beverages reported a 33.2% revenue increase to Rs. 66,075.6 million in Q3 CY2026, driven by 28.7% consolidated volume growth.
- Volume grew 22.5% in India and 39.9% in international markets including Africa.
- EBITDA increased 25.1% to Rs. 14,267.1 million with margin at 21.6% despite higher packaging costs.
- Profit after tax rose 13.5% to Rs. 8,306 million in the quarter.
- An interim dividend of Rs. 0.50 per share was declared, totaling Rs. 1,691 million in cash outflow.
Key details
- Successful merger of Twizza with BevCo completed on 1 August 2026 enhancing synergies in African operations.
- New beverage brands 'BOLT UP' and 'XTREME FIZZ' launched in Kenya.
- Exclusive distribution agreement with Mondelez established in Zimbabwe.
- Gross margins declined 334 basis points primarily due to increased packaging material costs and higher cost non-beverage products.
- Net realization per beverage case improved 2.2% year-on-year due to growth in premium categories and better price mix.
Financial performance
- Revenue for nine months ended September 30, 2026 increased by 23.3% to Rs. 218,146 million.
- EBITDA for nine months grew 19.9% to Rs. 52,746 million; profit after tax increased 15.5% to Rs. 32,023 million.
- Depreciation and finance costs rose due to acquisition debt and capacity expansion.
- Packaging cost pressures contributed approximately 300 basis points of gross margin decline.
- Sugar price increase of about 16% was largely offset by portfolio shift towards low-sugar products, now 88% of India sales volume in Q3 CY2026 compared to 44% in the prior year quarter.
Strategic context
- Ongoing investments in distribution, manufacturing capacity, and chilling infrastructure to support volume growth in India.
- Expansion in Africa remains a focus with new markets and product launches.
- Company is exploring entry into ready-to-drink and alcoholic beverage categories through incorporation of KIVA Spirits and Company Limited.
- Focus on profitability and long-term value creation alongside growth.
- Dividend policy followed with interim dividend payment in line with financial results.
Highlights
- Consolidated revenue increased by 33.2% year-on-year to Rs. 66,075.6 million in Q3 CY2026.
- Consolidated sales volume rose 28.7% to 354.4 million cases, with India up 22.5% and international markets up 39.9%.
- Gross margin declined by 334 basis points to 53.1% primarily driven by higher packaging costs and increased sales of higher-cost non-beverage products.
- EBITDA increased 25.1% to Rs. 14,267.1 million with 21.6% margin despite cost pressures.
- Profit after tax grew 13.5% to Rs. 8,306 million in Q3 CY2026.
- Twizza merger with BevCo completed on August 1, 2026, improving operational synergies in Africa market expansion including new brands launches and distribution deals in Zimbabwe and Kenya.
Disclosures
- SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
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