Varun Beverages Q2 results: Net profit up 5%, revenue down 2.32%

Varun Beverages Ltd reported a 5.04% increase in consolidated net profit to Rs 1,325.4 crore for Q2 FY26, driven by operational efficiencies and lower finance costs. However, revenue from operations declined 2.32% to Rs 7,163.02 crore, and consolidated sales volume dropped 3% to 389.7 million cases due to unseasonal rains in India. International volumes grew 15.1%, partially offsetting the decline.

Title: Varun Beverages Ltd Reports Mixed Q2 Results Amid Unseasonal Rains

Varun Beverages Ltd, PepsiCo's largest franchise bottler, reported a 5.04% increase in its consolidated net profit to Rs 1,325.4 crore for the second quarter of fiscal year 2025-26 (Q2 FY26). The company's net profit rose to Rs 1,325.4 crore from Rs 1,261.8 crore in the same quarter last year, driven by operational efficiencies and lower finance costs [1].

However, Varun Beverages' revenue from operations declined by 2.32% to Rs 7,163.02 crore, a decrease from Rs 7,333.67 crore in the corresponding period last year. The company attributed this decline primarily to unseasonal rains that affected sales volumes during the peak summer season in India [1].

Consolidated sales volume dropped by 3% to 389.7 million cases in Q2 FY26, compared to 401.6 million cases in Q2 FY25. The decline was more pronounced in India, where volumes fell by 7.1%, while international volumes grew by 15.1%, partially offsetting the overall decline [1].

Varun Beverages' profit after tax (PAT) rose by 5%, primarily driven by operational efficiencies and lower finance costs. Total expenses declined by 3.62% to Rs 5,506.94 crore in Q2 FY26. The company's total income was at Rs 7,240.17 crore, down by 1.86% [1].

Commenting on the results, Chairman Ravi Jaipuria stated, "In spite of 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" [1].

Varun Beverages has also commissioned new production facilities at Prayagraj (UP), Damtal (HP), Buxar (Bihar), and Mendipathar (Meghalaya) during the current quarter. Additionally, its subsidiary, Varun Beverages Morocco SA, has started commercial production of PepsiCo's snack product "Cheetos" in Morocco [1].

Shares of Varun Beverages Ltd were trading at Rs 522.30 on the BSE on Wednesday, up by 1.97% from the previous close [2].

References:
[1] https://www.livemint.com/focus/varun-beverages-q2-profit-up-5pc-to-rs-1-325-4-cr-revenue-down-2-32-pc-to-rs-7-163-cr-11753859943521.html
[2] https://www.financialexpress.com/market/stocks-to-watch-varun-beverages-blusmart-mobility-gail-india-arvind-l-t-p-g-health-happiest-minds-technologies-reliance-infrastructure-jubilant-pharmova-star-health-and-allied-insurance-ntpc-3930775/