Varun Beverages Reports Strong Q2 Performance with Net Profit Surging 15% to ₹1,525 Crore; Announces 2nd Interim Dividend

PepsiCo's primary bottling partner Varun Beverages Limited (VBL) has announced its consolidated unaudited financial results for the quarter and half-year ended June 30, 2026. Powered by robust seasonal demand across its market footprint, the company registered a 15.1% year-on-year growth in net profit for the second quarter.

In addition to strong earnings growth, the Board of Directors approved a second interim dividend of ₹0.50 per equity share (face value ₹2 each) for the financial year 2026.

Q2 FY26 Financial Highlights (Three Months Ended June 30, 2026)

Revenue from Operations: Stood at ₹86,505.70 million (₹8,650.57 crore), recording a 20.8% YoY growth compared to ₹71,630.21 million in Q2 FY25. Sequentially, revenue expanded by 28.7% over ₹67,215.37 million achieved in Q1 FY26.

Total Income: Reached ₹87,549.51 million (inclusive of other income amounting to ₹1,043.81 million).

Profit Before Tax (PBT): Rose to ₹19,771.77 million, marking a 14.2% YoY increase over ₹17,320.44 million reported in the corresponding prior-year quarter.

Net Profit After Tax (PAT): Increased by 15.1% YoY to ₹15,253.55 million (₹1,525.36 crore), up from ₹13,254.88 million in Q2 FY25.

Net Profit Attributable to Owners: Stood at ₹15,207.97 million.

Earnings Per Share (EPS): Basic and diluted EPS for the quarter improved to ₹4.50 per share (face value ₹2), compared to ₹3.89 in Q2 FY25.

H1 FY26 Performance Summary (Six Months Ended June 30, 2026)

For the first half of the financial year 2026, Varun Beverages maintained strong momentum across key operational metrics:

H1 Operations Revenue: Reached ₹153,721.07 million, up 19.7% YoY from ₹128,430.47 million in H1 FY25.

H1 Net Profit: Advanced to ₹24,040.68 million, compared to ₹20,568.46 million recorded in the first half of the previous fiscal year.

H1 Basic EPS: Expanded to ₹7.08 per share against ₹6.04 in H1 FY25.

Operational Expenses Breakdown

Total consolidated expenses for the quarter ended June 30, 2026, stood at ₹67,734.91 million, up from ₹55,069.46 million in the same period last year. Primary expense components included:

Cost of Materials Consumed: ₹36,534.94 million

Other Expenses: ₹16,185.96 million

Employee Benefits Expense: ₹6,832.37 million

Depreciation & Amortization Expense: ₹4,090.35 million

Excise Duty: ₹1,993.38 million

Purchases of Stock-in-Trade: ₹1,826.30 million

Finance Costs: ₹569.23 million

2nd Interim Dividend Details

The Board of Directors declared a second interim dividend for the financial year 2026:

Dividend Amount: ₹0.50 (Fifty Paisa) per Equity Share of nominal value ₹2 each.

Total Paid-Up Equity Shares: 3,38,24,64,894 shares, representing a paid-up share capital base of ₹6,764.59 million.

Record Date: Saturday, August 1, 2026 (fixed pursuant to Regulation 42 of SEBI LODR Regulations).

Payment Date: The dividend will be dispatched/credited on and from Tuesday, August 4, 2026, to eligible beneficial owners as of the Record Date.

Commenting on the performance for Q2 CY2026, Mr. Ravi Jaipuria, Chairman, Varun Beverages Limited, said, "We are pleased to report a strong performance during this quarter across our markets. Consolidated sales volumes grew by 19.8% and, together with improved realizations, translated into a 20.4% increase in net revenue from operations. EBITDA increased by 17.2% to Rs. 23,430.4 million in Q2 CY2026.

In India, we saw healthy volume growth in twenties since the onset of season i.e. from March onwards except for the month of April which was about flat resulting in overall volume growth for the quarter of 14.4%. Our expanded manufacturing footprint, extensive distribution network and continued investments in chilling infrastructure continued to drive growth.

We also extended our exclusive bottling and trademark licence agreement with PepsiCo in India until April 2049 and removed the earlier restriction requiring VBL to operate solely as an SPV for PepsiCo's business, strengthening our long-term partnership and creating greater operational flexibility to pursue opportunities that can deliver scale, and synergies.

We also entered a strategic alliance with Asahi Group Holdings to introduce the iconic CALPIS brand in India, marking our entry into the value-added fermented dairy beverage category.

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) Limited, which will provide us with the ready GTM in Kenya for expansion into carbonated soft drinks and energy drinks.

In accordance with our dividend policy, the Board of Directors has approved an interim dividend of 25% of face value, i.e., Rs. 0.50 per share, resulting in a total cash outflow of approximately ~Rs. 1,691 million.

Looking ahead, we remain confident in the long-term growth potential across our markets, supported by favourable demographics, rising disposable incomes and increasing consumption of packaged beverages. With adequate capacities, a growing and diversified portfolio, strong partnerships and an extensive distribution network, we are well positioned to deliver sustained and profitable growth and create long-term value for all our stakeholders."

Source : Equity Bulls

Keywords

VarunBeverages VBL Q2CY26 H1CY26 ResultUpdate