Varun Beverages trades 3% higher ahead of Q3 results; how will the numbers be?

Varun Beverages enjoys significant operations in India and expansion into other markets like Nepal, Sri Lanka, Morocco, and several African countries. The company handles a wide range of PepsiCo beverages, including carbonated drinks and non-carbonated options like Tropicana juices, Aquafina water, and Gatorade.

VBL is part of the RJ Corp group, a diversified business conglomerate with interests in beverages, quick-service restaurants, ice cream, and healthcare.

VBL has franchisees for various PepsiCo products across 27 states and 7 union territories in India, which accounts for 90% of the beverage sales volume of PepsiCo India.

Varun Beverages: Latest Development

As part of the reforms of the Goods and Services Tax (GST) announced by the government in early September 2025, the rate on carbonated beverages of fruit drink or carbonated beverages with fruit juice has been increased to 40% from 28%. The council also hiked the GST rate on caffeinated beverages to 40% from 28%.

Following the news, shares of VBL slipped the next day of the announcement.

Varun Beverages' June 2025 quarter earnings

Varun Beverages, which follows the calendar year as its financial year, reported a 5.04% increase in its consolidated net profit to ₹1,325.4 crore for the second quarter that ended June 2025, helped by operational efficiencies and lower finance costs, though volume was impacted in the peak summer season due to unseasonal rains.

The company had posted a net profit of ₹1,261.8 crore in the April-June quarter a year ago, according to a regulatory filing from Varun Beverages Ltd (VBL).

However, its revenue from operations declined 2.32% to ₹7,163.02 crore in the June quarter of FY26. It stood at ₹7,333.67 crore in the corresponding quarter last fiscal.

During June, VBL reported a 3% drop in consolidated sales volume at 389.7 million cases in Q2 CY2025 from 401.6 million cases in Q2 CY2024, primarily due to abnormally high unseasonal rainfall throughout the quarter in India," the bottler said in its earnings statement.

Its India volumes declined by 7.1%, while international volumes grew by 15.1%, partially offsetting the overall decline, it said.

In the June quarter, "net realisation per case at the consolidated level improved by 0.5%, driven by 6.6% improvement in the international markets," said VBL. VBL's profit after tax (PAT) rose 5%, primarily driven by operational efficiencies and lower finance costs, the company said. Total expenses declined 3.62% to ₹5,506.94 crore in the June quarter.

VBL's total income in the June quarter was at ₹7,240.17 crore, down 1.86%.

Commenting on the results, Chairman Ravi Jaipuria said, "In spite of the unusually early onset of monsoon rains in the peak summer months in India, we could keep our realisations per case and EBITDA margins intact. Due to growth in international markets supported by strong positive currency movement in African territories, the company ended the quarter with a positive PAT, in spite of a 3% decline in consolidated sales volumes." Meanwhile, in a separate filing, VBL said its board has approved a second interim dividend of ₹0.50 per share, representing 25% of the face value of ₹2 each.

In the June quarter, VBL commissioned new production facilities at Prayagraj (UP), Damtal (HP), Buxar (Bihar), and Mendipathar (Meghalaya).

Moreover, during the September quarter, Varun Beverages Morocco SA (a subsidiary of the company) started commercial production of PepsiCo's snack product "Cheetos" in Morocco.