Varun Beverages Limited, PepsiCo’s largest bottling partner in India, reported a strong increase in revenue and profit for the third quarter of calendar year 2026. The company’s consolidated profit after tax rose 13.5% year over year to ₹830.6 crore, while revenue from operations, excluding excise duty and GST, increased 33.2% to ₹6,607.6 crore. Strong sales volume growth in India and international markets supported the performance.
However, rising packaging material costs and supply-chain disruptions affected profitability. Varun Beverages reported a decline in gross and EBITDA margins despite higher sales. The company also announced a third interim dividend of ₹0.50 per equity share, with November 5, 2026, set as the record date. The results highlight the company’s continued expansion, alongside cost pressures facing the beverage industry.
Key Takeaways
- Consolidated profit after tax increased 13.5% to ₹830.6 crore.
- Revenue from operations, net of excise and GST, grew 33.2% to ₹6,607.6 crore.
- Consolidated sales volumes increased 28.7% to 354.4 million cases.
- India volumes grew 22.5%, while international volumes increased 39.9%.
- EBITDA rose 25.1% to ₹1,426.7 crore.
- Gross margin declined 334 basis points to 53.1%.
- The company declared a third interim dividend of ₹0.50 per share.
- November 5, 2026, is the dividend record date.
Varun Beverages Q3 2026 Financial Results
Varun Beverages delivered double-digit growth across its major financial metrics during the July–September quarter.
Revenue from operations, excluding excise duty and GST, increased to ₹6,607.6 crore from ₹4,960.7 crore in the corresponding quarter last year.
Profit after tax rose to ₹830.6 crore compared with ₹731.5 crore in Q3 2025. EBITDA increased 25.1% to ₹1,426.7 crore, reflecting higher sales volumes and operating leverage.
| Financial metric | Q3 2026 | Q3 2025 | YoY growth |
|---|---|---|---|
| Revenue, net of excise/GST | ₹6,607.6 crore | ₹4,960.7 crore | 33.2% |
| EBITDA | ₹1,426.7 crore | ₹1,140.4 crore | 25.1% |
| Profit after tax | ₹830.6 crore | ₹731.5 crore | 13.5% |
| Consolidated sales volume | 354.4 million cases | 275.3 million cases | 28.7% |
| EBITDA margin | 21.6% | 23.0% | -140 bps |
| Gross margin | 53.1% | 56.4% | -334 bps |
Source: Varun Beverages’ Q3 CY2026 financial results. Figures are rounded.
The figures show that revenue and EBITDA grew faster than profit after tax, partly reflecting higher depreciation and financing costs associated with acquisitions and expansion.
Sales Volume Growth Drives Revenue Higher
Higher sales volumes were the primary driver of Varun Beverages’ quarterly revenue growth.
The company sold 354.4 million cases during Q3 2026, compared with 275.3 million cases in the same period last year.
India recorded volume growth of 22.5%, while international markets delivered growth of 39.9%.
The international figure also included 15.3 million cases contributed by Twizza, the South African beverage business acquired by Varun Beverages earlier in 2026.
The company also reported a 2.2% improvement in consolidated beverage realization per case. This means it generated slightly more revenue per case sold, supported by product mix improvements and pricing strategies.
In India, beverage realization increased 0.5%, helped by higher-value categories, premium product launches and calibrated discounting.
The combination of stronger volumes and improved realizations helped drive revenue growth above 33%.
Packaging Costs Put Pressure on Profit Margins
Despite strong sales, rising packaging costs affected Varun Beverages’ profitability.
The company’s gross margin declined 334 basis points year over year to 53.1% in Q3 2026.
Management attributed the pressure primarily to higher costs of packaging materials, including:
- Plastic preforms used in bottle manufacturing.
- Shrink films.
- Bottle closures and caps.
- Aluminium cans.
The company said geopolitical disruptions contributed to higher packaging material costs and supply-chain challenges.
Sales of non-beverage products, including preforms and caps, also increased significantly in India. These products carry higher costs of goods sold, which further affected the gross margin.
As a result, EBITDA margin declined approximately 140 basis points to 21.6%, even though EBITDA increased 25.1% year over year.
This difference is important: Varun Beverages is selling more products and generating higher revenue, but a larger share of that revenue is being absorbed by costs.
Low-Sugar Products Gain Share as Sugar Prices Rise
Another important development is the company’s growing portfolio of low-sugar and no-sugar beverages.
Varun Beverages said sugar prices increased approximately 16% during the quarter. However, the company managed to largely offset this pressure through a shift towards low-sugar and no-sugar products.
In India, these products accounted for 88% of sales volume in Q3 2026, compared with 44% in the corresponding quarter last year.
This shift reflects changing consumer preferences and the company’s efforts to expand its product portfolio beyond traditional sugary carbonated drinks.
The company has also introduced premium products and new categories, including Ad Rush and the Evervess mixers range.
The expansion of low-sugar and premium offerings could help Varun Beverages manage ingredient costs and improve product mix over time.
International Expansion Supports Growth
International markets played an increasingly important role in Varun Beverages’ quarterly performance.
International sales volumes increased 39.9%, compared with 22.5% growth in India.
The acquisition of Twizza in South Africa contributed to international volumes and expanded the company’s presence in the African beverage market.
Varun Beverages has been expanding its international operations through acquisitions and investments in distribution and manufacturing capacity.
However, acquisitions also increase expenses. The company reported that depreciation increased 34.5% and finance costs rose 53.5% year over year, primarily because of the Twizza acquisition and associated debt funding.
These additional expenses help explain why profit growth was slower than revenue growth.
Varun Beverages Declares ₹0.50 Interim Dividend
Alongside its financial results, the company’s board approved a third interim dividend of ₹0.50 per equity share for calendar year 2026.
The company fixed November 5, 2026, as the record date to determine eligible shareholders.
| Dividend detail | Information |
|---|---|
| Third interim dividend | ₹0.50 per share |
| Face value | ₹2 per share |
| Record date | November 5, 2026 |
| Payment date | On and from November 7, 2026 |
The dividend represents 25% of the share’s face value. Eligible shareholders will receive the payment according to the company’s announced schedule.
Varun Beverages’ Nine-Month Performance
The company also reported strong growth for the first nine months of calendar year 2026.
Revenue increased 23.3% year over year to ₹21,814.6 crore, while EBITDA grew 19.9% to ₹5,274.6 crore.
Profit after tax increased 15.5% to ₹3,202.3 crore.
| Financial metric | 9M 2026 | 9M 2025 | Growth |
|---|---|---|---|
| Revenue | ₹21,814.6 crore | ₹17,689.1 crore | 23.3% |
| EBITDA | ₹5,274.6 crore | ₹4,400.8 crore | 19.9% |
| Profit after tax | ₹3,202.3 crore | ₹2,772.1 crore | 15.5% |
The company follows a January-to-December financial year. Its management also highlighted the seasonal nature of the beverage business, with a significant portion of revenue and profit generally generated during the April–June quarter.
This means quarterly comparisons should be interpreted with seasonality in mind.
The Bigger Picture
Varun Beverages’ latest results demonstrate that its expansion strategy continues to support revenue growth. Higher sales volumes in India and international markets, premium products and acquisitions have strengthened its business. Its growing low-sugar portfolio also indicates an effort to respond to changing consumer preferences.
However, the decline in gross and EBITDA margins shows that strong demand does not automatically translate into proportionate profit growth. Packaging costs, geopolitical supply-chain disruptions and higher financing expenses remain important challenges. The company’s ability to control these costs while expanding internationally will influence its profitability in the coming quarters.
Looking Ahead
Investors will closely monitor packaging material prices, sales volumes, product mix and the performance of newly acquired international businesses. The integration of Twizza and the company’s expansion into additional beverage categories will also be important for understanding future growth. Whether the company can maintain strong volume growth while recovering its margins remains a key question.
Varun Beverages continues to benefit from its relationship with PepsiCo and its expanding distribution network. However, its next phase of growth will depend not only on selling more beverages but also on improving the profitability of each case sold. The coming quarters will show whether operating efficiencies and premiumisation can offset higher input costs.
Frequently Asked Questions
1. What was Varun Beverages’ Q3 2026 net profit?
Varun Beverages reported consolidated profit after tax of ₹830.6 crore in Q3 2026, an increase of 13.5% compared with ₹731.5 crore in the same quarter last year.
2. How much did Varun Beverages’ revenue grow?
Revenue from operations, excluding excise duty and GST, increased 33.2% year over year to ₹6,607.6 crore.
3. Why did Varun Beverages’ profit grow slower than revenue?
Higher packaging material costs, increased depreciation and financing expenses affected profitability. Gross margin declined 334 basis points, while EBITDA margin fell approximately 140 basis points.
4. How much did Varun Beverages’ sales volume increase?
Consolidated sales volumes increased 28.7% to 354.4 million cases. India volumes grew 22.5%, while international volumes increased 39.9%.
5. What dividend did Varun Beverages declare?
The company declared a third interim dividend of ₹0.50 per equity share for calendar year 2026. The record date is November 5, 2026, and payment is scheduled to begin on November 7.
6. Who owns Varun Beverages?
Varun Beverages is an Indian publicly listed company and one of PepsiCo’s largest franchise bottling partners globally. It manufactures, distributes and sells PepsiCo beverages in several markets.
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