This article first appeared on GuruFocus .
Release Date: July 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Varun Beverages Ltd ( NSE:VBL ) reported a strong performance with a 19.8% increase in consolidated sales volume and a 20.4% increase in net revenue from operations.
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The company extended its exclusive bottling and trademark license agreement with PepsiCo in India until April 2049, enhancing long-term partnership and operational flexibility.
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International business maintained strong momentum, with significant contributions from Twiza in South Africa and an agreement to acquire Devyani Foods Industries Kenya Limited.
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The company declared an interim dividend of 25% of face value, resulting in a total cash outflow of approximately Rs 1,691 million.
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Varun Beverages Ltd ( NSE:VBL ) remains net debt-free in India, with surplus cash of Rs 14,941 million, and has a strong credit rating reaffirmed by Crystal AAA Stable.
Negative Points
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EBITDA margin declined by 76 basis points year-on-year, primarily due to the consolidation of the Twiza business, which operates at lower margins.
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Depreciation increased by 33.6% due to the commissioning of new plants in India and the acquisition of Twiza in South Africa.
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Finance costs rose by 55.8%, mainly due to the Twiza acquisition.
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The company faced challenges in April due to the El Nino effect, impacting growth during that month.
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There was a temporary dip in the energy drinks category due to regulatory changes, although the company expects recovery as new labels are introduced.
Q & A Highlights
Q: Can you provide insights on the demand side in India, particularly regarding the Rs.10 price point and the impact of Campa Cola's growth? A: We have not significantly scaled up the Rs.10 category as it is not profitable for us. We are focusing on delivering 20%+ growth in most markets. Campa Cola's growth might be due to their expansion into new territories and targeting a different consumer segment. Our growth remains strong despite these dynamics. - Unidentified_6
Q: How are the new categories like Nimbos and milk-based beverages performing compared to carbonated beverages? A: We are seeing significant growth in categories like Tropicana juice, value-added dairy, and hydration products like Nimbos. These categories are growing at 3x to 4x compared to our overall business, with VAD growing over 40% and Nimbos over 30%. - Unidentified_6
Q: What is the impact of GST changes on your business, especially in non-carbonated categories? A: The GST impact was minimal, affecting categories like dairy and Nimbos. We have managed to sustain prices despite geopolitical issues, which has helped us maintain growth in these categories. - Unidentified_3
Q: Can you comment on the international growth, particularly in Africa? A: All our international markets, except Zambia, are growing rapidly. We see significant opportunities in Africa, with Zimbabwe recovering from past issues. Our international operations are expanding, and we expect continued growth. - Unidentified_3
Q: How is the energy drinks category performing amid regulatory changes? A: There was a temporary impact due to regulatory confusion, but the situation is stabilizing. We have adjusted our labeling as per guidelines, and volumes are recovering. The temporary dip in energy drinks shifted to CSD, but we expect energy drink volumes to bounce back. - Unidentified_6
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
