Varun Beverages Posts 13.5% Rise in Q3 Net Profit Driven by Volume Growth

NEW DELHI — Varun Beverages Ltd, a major bottler for PepsiCo, has reported a consolidated net profit of ₹830.6 crore for the September quarter, registering an increase of 13.54 per cent compared to ₹731.5 crore in the corresponding period of the previous year. The company follows the calendar year as its financial year.

During the quarter, net revenues grew by 33.2 per cent to reach ₹6,607.5 crore. This growth was primarily driven by strong consolidated sales volume, which rose by 28.7 per cent in Q3 CY2026. Domestic sales in India recorded a robust volume growth of 22.5 per cent.

Varun Jaipuria, Executive Vice-Chairman of Varun Beverages Ltd, stated that the company experienced healthy volume growth in India, extending a positive trend that began in May. This performance was supported by an extensive distribution network, expanded manufacturing capacities, and ongoing investments in chilling infrastructure. The company also noted that the share of no-sugar and low-sugar beverage products increased to account for 86 per cent of consolidated volumes.

Despite strong revenue performance, margins faced pressure during the quarter. Higher packaging costs weighed on profitability, while increased sales of non-beverage products such as preforms and caps in India—which rose by 104 per cent—impacted gross margins by about 100 basis points due to a higher cost of goods sold. However, the company stated that improved realisations, operating leverage from strong volume growth, and an increased mix of low-sugar and non-sugar products helped partially offset these cost pressures.

The company's board approved an interim dividend of 25 per cent per share, with an expected total cash outflow of approximately ₹169.1 crore.

In terms of international expansion and diversification, Varun Beverages commenced beverage operations in Kenya during the quarter and introduced two new brands, BOLT UP and XTREME FIZZ. The company also entered into an exclusive distribution agreement with Mondelez in Zimbabwe and incorporated KIVA Spirits and Company Ltd to explore opportunities in ready-to-drink beverages, alcoholic beverages, and allied products.

"Varun Beverages' latest financial results demonstrate the strength of robust supply chain infrastructure and volume-driven scaling in the consumer beverage sector. While rising packaging costs and higher cost-of-goods-sold items present margin challenges, the company's focus on operational leverage, premiumisation, and disciplined international expansion into markets like Africa highlights a balanced approach to growth. Diversifying into adjacent categories also provides a clear pathway for sustained long-term revenue generation." — Dr. Shishir Gupta, Founder & CEO, StartupLanes